The retail industry has a higher turnover rate than many other sectors. While the average turnover rate sits at 15%, the retail industry’s turnover rate is about 60%.
Fortunately, employers have options to address the issue. Companies who want to be proactive about reducing their turnover rate can focus on improving the quality of their retail background checks.
Today, comprehensive background checks allow employers to select the best applicants to represent their brands, which helps build a healthy, long-term workforce.
Proper retail background checks are easier said than done, though. To help you navigate and streamline the process for your company, we’ve developed this comprehensive guide.
Let’s get started.
Retail Theft Statistics
Before we discuss the importance of background checks, let’s talk about one of the biggest threats facing the modern retail environment:
According to results from the 2021 National Retail Security Survey (NRSS), the average dollar loss per dishonest employee is $1,551.66.
Additionally, 53% of retailers state that reducing the rate of internal theft has become “much more of a priority” in recent years.
In an attempt to respond to these threats, retailers are allocating more resources to risk management, specifically where loss prevention is concerned.
While there’s no way to stop retail theft altogether, investing in more robust background checking programs is one way to prevent it from dealing a critical financial blow to your operation.
Why do Retail Stores Conduct Background Checks?
Hiring great employees is crucial for retail employers. Retail employers use pre-employment background checks as a first-line defense against negligent hiring claims, workplace violence, thefts, and fraud. Additionally, pre-employment background screenings help retailers ensure the safety of their employees and customers.
Here are several reasons that retailers complete pre-employment background screens on their applicants.
1. Better customer service
Most retail employees regularly engage in in-person interactions with shoppers. When customers have a better shopping experience, they are likelier to return and to recommend your business to others. As a result, hiring employees who have great customer service skills and relevant employment experience can help to protect your business.
Completing an employment verification for your applicants can ensure that your employees have the characteristics and experience needed for excellent customer service delivery.
2. Reducing incidents of retail theft and fraud
Retail theft is a huge problem within the retail industry. The National Retail Federation reports that losses from fraud and thefts totaled an estimated $61.7 billion in 2019.
While many of these losses can be attributed to returned items fraud, shoplifting, and other problems, a large percentage of retailers also report losses from employee thefts. In its survey of loss prevention teams at retailers nationwide, the NRF found that 58% reported losses caused by internal thefts and fraud.
In addition to the problem of employees carrying away products without paying for them, retail workers often handle customers’ sensitive data, including contact information and credit card numbers. As a retail employer, you are obligated to protect the sensitive information of your customers from fraud and theft.
If an employee uses the credit card information of your customers, your business could be sued in a negligent hiring claim.
You can protect your company’s profit margins and your customers by completing pre-employment retail background checks. They might reveal background information for a candidate that demonstrates potential risks of fraud or theft.
3. Protection from workplace violence
The retail industry involves close work with numerous customers and coworkers. When you partner with a reputable employment background check company like iprospectcheck, you can minimize the risk of hiring someone with a history of theft, violent behavior, or drug abuse and protect your company from potential liability.
4. Improved job retention rates
Many retail employers struggle with low retention rates and high employee turnover. When your business has a high turnover rate, you can face increased expenses caused by conducting constant training sessions and bringing new employees up to speed.
Employment verification can show you whether an applicant tends to stay at jobs or frequently changes employers. You can also verify the information your applicants report on their applications to ensure you make sound hiring decisions.
Verifying an applicant’s employment history can let you see if he or she has moved from job to job frequently or has instead remained with different employers for more extended periods.
What Do Most Retail Background Checks Search?
A quality retail background check should include the following:
1. Identity Verification
Identity verification services allow your company to ensure that an applicant is who they say they are. This is a critical part of proper retail screening and will help keep your store and customers safe and secure.
2. County Criminal Records Check
County criminal records checks are a powerful type of background check. Since most felony and misdemeanor cases are filed in county courts, county criminal record searches have the potential to expose court records, convictions, and more.
3. National Criminal Records Check
A national criminal records check is a very wide search into an applicant’s background. These checks search a database containing millions of records from many sources and jurisdictions, counties, departments of corrections, administrative offices of the court, and offender registries to identify possible records. When potential records are found, we search the proper source and return only updated, correct and useful information.
4. Past Employment Verification
Even if the applicant has a clean criminal history, how can you be sure they have the skills to complete the job? Prior employment verification allows you to be sure that the applicant has the skills and ability to perform the duties of the job, and that their resume or application is accurate and complete.
5. Drug Screening
Drug testing for retail candidates is essential. Since retail spaces require employees to engage with customers and promote the brand, employers must ensure the people overseeing their store’s shopping experience are drug-free.
6. Electronic I9
Form I-9 is used to verify the employment authorization and identity of individuals seeking employment in the U.S. Before hiring an applicant, U.S. employers must ensure the applicant has completed Form I-9 properly.
Does Retail Theft Show up on a Background Check?
Under the FCRA, misdemeanor and felony convictions can be reported regardless of age. If a candidate has a conviction for a misdemeanor or felony retail theft, you will see the offense information on a pre-employment background check.
How Far Back do Background Checks go for a Retail Job?
Pre-employment background checks for retail jobs must comply with the FCRA’s requirements, including the limits on how far back certain types of adverse information can be reported and used for employment purposes.
Consumer reporting agencies like iprospectcheck cannot report arrests that did not lead to convictions that are more than seven years old under the FCRA for employment purposes.
Other types of information that cannot be reported beyond seven years or the expiration of the relevant statute of limitations include civil judgments and adverse credit information.
The FCRA’s time restrictions do not apply when the positions pay salaries of $75,000 or more. This is known as the salary-cap exception to the FCRA.
These time limits do not apply to other types of important information provided by iprospectcheck. You can receive and use background information about an applicant’s work history, educational qualifications, and credentials no matter how old the information is.
How Long Does a Background Check Take for a Retail Job?
The time it takes to complete a retail background check varies. It depends on factors like the extent of the search and whether your company is completing the check in-house or hiring a third-party company.
If you want a faster turnaround time for your retail background checks, partner with a professional company like iprospectcheck.
iprospectcheck: Your Trusted, Reliable Partner for Retail Background Checks
Retail is a value-driven industry, and the success of your business depends on the quality of your employees.
While you can’t predict the potential pitfalls associated with every applicant you interview, conducting extensive retail background checks will improve your loss prevention and risk management efforts immediately. It will also allow you to decrease turnover, find the right people for your store, and ensure the success of your company for years to come.
Not all background-checking companies are created equal. Here at iprospectcheck, we specialize in comprehensive and compliant employment background screenings for the retail industry.
Contact us today to learn more or request a free quote.
DISCLAIMER: The resources provided here are for educational purposes only and do not constitute legal advice. Consult your counsel if you have legal questions related to your specific practices and compliance with applicable laws.