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What is Sweethearting in Retail?

Sweethearting is a type of employee theft where a cashier gives unauthorized discounts or free merchandise to friends, family, or co-workers. The name comes from the idea that the cashier is doing a favor for their “sweetheart” – but make no mistake, this is a serious form of fraud that can significantly impact a retailer’s bottom line.

How Does Sweethearting Work?

Imagine you’re shopping at your local grocery store. As you approach the checkout, you notice the cashier chatting with the customer ahead of you. They seem friendly, maybe even familiar with each other. What you don’t see is that the cashier is subtly sliding items past the scanner without ringing them up, or applying discounts that shouldn’t be there. This is sweethearting in action.

Sweethearting can take many forms:

• • Not scanning items
  • Applying unauthorized discounts
  • Overriding prices
  • Misusing loyalty programs
  • Abusing employee discounts

The key is that the cashier is deliberately giving away products or discounts without authorization, usually to someone they know.

Why is Sweethearting so Damaging?

You might think that giving away a few free items here and there isn’t a big deal. But the numbers tell a different story. Sweethearting is estimated to cost retailers billions of dollars annually. It’s not just the lost revenue from the stolen merchandise – it’s also the erosion of profit margins and the potential for widespread abuse if left unchecked.

When sweethearting becomes prevalent, it can create a culture of entitlement among employees and their friends. This can lead to:

• • Increased shrinkage rates
  • Lower profit margins
  • Higher prices for honest customers
  • Damaged employee morale
  • Potential legal issues 

How can Retailers Spot Sweethearting?

Catching sweethearting in the act can be challenging. Unlike shoplifting, where you might see someone stuffing items into a bag, sweethearting often looks like a normal transaction to the untrained eye. However, there are several red flags that retailers can watch for:

Unusual Patterns in Transaction Data

Modern point-of-sale systems can track a wealth of data. Retailers can use this to identify suspicious patterns, such as:

• • High numbers of voided transactions.
  • Frequent use of manual price overrides.
  • Unusual discount patterns.
  • Transactions with a high percentage of un-scanned items.

Employee Behavior

While data is crucial, human observation is also important. Managers should be on the lookout for:

• • Employees who always want to check out their friends.
  • Cashiers who seem overly familiar with certain customers.
  • Staff who are reluctant to take breaks or days off.

Best Practices for Retailers to Prevent Sweethearting

Preventing sweethearting requires a multi-faceted approach. Here are some strategies that retailers can implement:

Employee Education and Culture

One of the most effective ways to combat sweethearting is to create a culture of integrity. This starts with clear communication about what sweethearting is and why it’s harmful. Employees should understand that it’s not a victimless crime – it affects the entire company and can lead to job losses.

Technology Solutions

Advanced analytics and AI-powered systems can help detect sweethearting in real-time. These systems can:

• • Monitor transaction patterns
  • Flag suspicious activity
  • Provide alerts for manual review

Video surveillance, when used in conjunction with transaction data, can provide powerful evidence of sweethearting.

Policy and Procedure Updates

Retailers should review and update their policies to address sweethearting specifically. This might include:

• • Limits on employee discounts.
  • Restrictions on ringing up purchases for friends and family.
  • Clear consequences for engaging in sweethearting.

Regular Audits and Mystery Shopping

Conducting regular audits of transaction data can help identify potential sweethearting. Mystery shopping programs, where undercover shoppers test cashiers, can also be effective in catching and deterring this behavior.

Importance of Loss Prevention in Combating Sweethearting

Loss prevention teams play a crucial role in the fight against sweethearting. They’re often the first line of defense, responsible for:

• • Analyzing data to detect suspicious patterns.
  • Investigating potential cases of sweethearting.
  • Training staff on prevention techniques.
  • Implementing and managing technology solutions.

Leverage Technology for Better Detection

Modern loss prevention teams are increasingly turning to advanced technology to combat sweethearting. Exception-based reporting systems, like those offered by ThinkLP, can analyze vast amounts of transaction data to identify potential cases of sweethearting quickly and accurately.

These systems can:

• • Compare individual cashier performance against store and company averages.
  • Track the use of discounts, voids, and price overrides.
  • Identify patterns that might indicate collusion between employees.

The Human Side of Preventing Sweethearting

While technology is crucial, it’s important not to overlook the human element in preventing sweethearting. Building a strong company culture that values integrity can go a long way in deterring this type of behavior.

Create a Positive Work Environment

Employees who feel valued and respected are less likely to engage in or tolerate sweethearting. Retailers can foster this environment by:

• • Offering competitive wages and benefits
  • Providing opportunities for advancement
  • Recognizing and rewarding honest behavior
  • Encouraging open communication about ethical concerns

Importance of Training

Regular training sessions can help employees understand the seriousness of sweethearting and its consequences. These sessions should cover:

• • What constitutes sweethearting
  • The impact on the company and fellow employees
  • How to report suspected sweethearting
  • The company’s policies and procedures for preventing and addressing this issue

How to Respond Correctly When Sweethearting Occurs 

Despite best efforts, cases of sweethearting may still occur. When they do, it’s important to have a clear plan of action:

Gather evidence: Use transaction data, video footage, and witness statements to build a solid case.

Interview the employee: Follow your company’s HR procedures for conducting a fair and thorough investigation.

Take appropriate action: This may range from additional training to termination, depending on the severity and frequency of the offense.

Review and improve: Use each incident as an opportunity to refine your prevention strategies.

Final Thoughts

Sweethearting might sound harmless, but it’s a serious form of theft that can significantly impact a retailer’s profitability. By understanding what it is, how it happens, and how to prevent it, retailers can protect their bottom line and foster a culture of honesty and integrity. With the right combination of technology, training, and company culture, sweethearting can be effectively combated, ensuring a fairer and more profitable retail environment for everyone.

Explore ThinkLP’s Blog

Now that you know what sweethearting in retail is, you can find additional insights on loss prevention and safety intelligence on ThinkLP’s blog. The blog features articles, case studies, and industry insights that provide practical tips and strategies for improving your loss prevention efforts.

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