Computer Fraud Perpetrated against Small Independent Food Retailers during the Direct Store Delivery Process (1992)

The retail grocery industry is serviced by truck wholesalers known as vendors, delivery persons, or route salespersons. The merchandise delivered by these individuals supplements central grocery distribution center deliveries and consists of items such as beer, soft drinks, potato chips, bread, and milk. Such transactions are referred to as direct store deliveries (DSD) with products coming directly from an independent distributor rather than from a central grocery warehouse. The retail food industry is more susceptible to delivery problems than other retail sectors because of high stock turnover. High stock turnover increases the number of direct store deliveries and, as a result, increases opportunities for vendors to steal. Opportunity to steal is one of five separate but interrelated theoretical paradigms identified by Hollinger and Clark (1985) as being used to explain workplace theft. As explained by this set of hypotheses, almost every employee can be tempted to steal from his or her employer (Astor 1972, Henry 1982). The key to understanding why employees may take company money or property lies in knowing the relative levels of opportunity available to them to steal (Hemphill 1969, Hollinger and Clark 1985). Thus, one element in reducing employee theft, according to this theory, consists of constraining opportunities to steal in the work environment. The emergence of computers in the DSD process has created a number of new opportunities for delivery persons to steal, especially from small independent food retailers who have fewer resources to devote to loss prevention than their larger counterparts (Berman and Evans 1989). This exploratory study addresses the knowledge gap exists in the grocery industry between the emergence of computers in the DSD process and the theft opportunities these computers have created. DSD THEFT Much of what has been written concerning DSD theft is experiential, observational, and self-reported, and comes primarily from loss prevention consultants in the grocery industry. While there is no consensus regarding the causes or dollar amounts of such theft, most experts agree the problem is widespread and significant. For example, a U.S. industry-wide study of 34,000 convenience stores conducted by SRI International (1980) concluded approximately 25 percent of theft in the convenience store industry involves vendors working alone or in collusion with employees. They estimate such shrinkage amounts to millions of dollars annually. Fensholt's (1980) estimates are even higher. She suggests improperly checked route salespersons steal as much as one-third of what is supposed to be delivered. Because much of this sort of crime goes undiscovered or unreported, Fensholt believes this estimate is probably low. She normally attributes the greatest percentage of retail theft to employees, but in grocery and convenience stores believes vendors steal as much. This is interesting in light of a recent London House Inc. survey (Bennett 1990) which found 43 percent of supermarket employees admitted some theft of cash or property. The anonymous results showed that people who steal perceive themselves as average people in a dishonest world (Bennett 1990, B1). This is consistent with estimates by Henry (1982) 85 percent of employees are basically honest individuals who are faced with the opportunity to steal and the ability to justify their actions. Additional support by Crawley (1982) also indicates vendors steal as much as employees in supermarkets. He breaks down the problem even further by suggesting among vendors, beer vendors account for the greatest dollar loss. But as Hollinger and Clark (1982) aptly point out, dwelling solely upon the dollar-impact or prevalence issue may lead to a dead end, given the more important unanswered questions. One of those questions concerns the techniques and circumstances under which vendor theft occurs. …