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Chris Dykstra responsible for loss prevention at West wind Electronics took a deep breath.

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The Wages of Sin?58 Chris Dykstra, responsible for loss prevention at West wind Electronics, took a deep breath before he launched into making his case for the changes that he was proposing to the company’s shoplifting policy. He knew that convincing Ross Chenoweth was going to be a hard sell. Ross, the president and CEO, was the son of the founder of the local, still-family-owned consumer electronics chain based I Phoenix, Arizona. He’d inherited not only the company, but also his father’s strict moral code. “I think it’s time to follow the lead of other st...

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The Wages of Sin?58 Chris Dykstra, responsible for loss prevention at West wind Electronics, took a deep breath before he launched into making his case for the changes that he was proposing to the company’s shoplifting policy. He knew that convincing Ross Chenoweth was going to be a hard sell. Ross, the president and CEO, was the son of the founder of the local, still-family-owned consumer electronics chain based I Phoenix, Arizona. He’d inherited not only the company, but also his father’s strict moral code. “I think it’s time to follow the lead of other stores,” Chris began. He pointed out that most other retailers didn’t bother calling the police and pressing charges unless the thief had shoplifted merchandise worth more than $50 to $100. In contrast, Westwind currently had the zerotolerance policy toward theft that Ross’s father had put in place when he started the business. Chris wanted to replace that policy with one that prosecuted only individuals between 18 and 65 who had stolen more than $20 worth of goods, and who had a previous history of theft at Westwind. In the case of first-time culprits under 18 or over 65, he argued for letting them off with a strict warning, regardless of the value of their ill-gotten goods. Repeat offenders would be arrested. “Frankly, the local police are getting pretty tired of having to come to our stores every time a teenager sticks a CD in his jacket pocket,” Chris pointed out. “And besides, we just can’t afford the costs associated with prosecuting everyone.” Every time he pressed charges against a shoplifter who’d made off with a $10 item, Westwind lost money. The company had to engage a lawyer and pay employees overtime for their court appearances. In addition, Chris was looking at hiring more security guards to keep up with the workload. Westwind was already in a losing battle at the moment with mass retailers who were competing all too successfully on price, so passing on the costs of its zero-tolerance policy to customers wasn’t really an option. “Let’s concentrate on catching dishonest employees and those organized-theft rings. They’re the ones who are really hurting us,” Chris concluded. There was a long pause after Chris finished his carefully prepared speech. Ross thought about his recently deceased father, both an astute businessman and a person for whom honesty was a key guiding principle. If he were sitting here today, he’d no doubt say that theft was theft, that setting a minimum was tantamount to saying that stealing was acceptable just as long as you don’t steal too much. He looked at Chris. “You know, we’ve both got teenagers. Is this really a message you want to send out, especially to kids? You know as well as I do that there’s nothing they like better than testing limits. It’s almost an invitation to see if you can beat the system.” But then Ross faltered as he found himself glancing at the latest financial figures on his desk— another in a string of quarterly losses. If Westwind went under, a lot of employees would be looking for another way to make a living. In his heart, he believed in his father’s high moral standards, but he had to ask himself: Just how moral could Westwind afford to be? What Would You Do? 1. Continue Westwind’s zero-tolerance policy toward shoplifting. It’s the right thing to do—and it will pay off in the end in higher profitability because the chain’s reputation for being tough on crime will reduce overall losses from theft. 2. Adopt Chris Dykstra’s proposed changes and show more leniency to first-time offenders. It is a more cost-effective approach to the problem than the current policy, plus it stays close to your father’s original intent. 3. Adopt Chris Dykstra’s proposed changes with an even higher limit than the proposed $20 amount (say, $50 or $100), but which is still less than the cost of prosecution. In addition, make sure the policy isn’t publicized. That way, you’ll reduce costs even more and still benefit from your reputation for prosecuting all shoplifters.

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Loss prevention expert C is recommending a change in the shoplifting policy at Company W, which would modify the current “zero tolerance” policy to one where first time offenders under 18 or over 65 would not be prosecuted unless the items they took exceeded a specified limit.

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