Loss Prevention and Investigative Interviews

A variance that appears in one department, repeats on the same shift and survives a cycle count is a pattern, and patterns are readable in data long before anyone can be named. Refunds processed without merchandise, discounts applied at a friend's register, voids after the customer leaves, carts that leave through a stockroom door, a receiving count that reconciles on paper and not on the shelf: each of those produces a record, and the record is where the investigation starts.

That ordering matters. An interview conducted before the file exists produces an admission that cannot be corroborated and a case that a lawyer's letter will dismantle. We build the documentary case first, decide whether it points at a person or at a procedure, and only then decide whether a conversation is warranted.

Plenty of investigations close without an interview. A control that a whole shift has learned to work around is a management finding, and the fix is a procedure rather than a dismissal. We say so when that is what the records show, even though it is the less billable answer.

The employee is told why they are there, that the conversation is voluntary and that they may leave. The room is unlocked, nobody stands between the employee and the door, and the session ends when they withdraw from it. A witness from the client's human resources or legal team is present throughout, and where the client's policy allows, the employee may bring one of their own.

Our interviewers are trained in non-coercive methods rather than in pressure. There are no threats of arrest, no promises of leniency, no suggestion that cooperation decides whether police are involved, and no claim about evidence the file does not contain. The Employee Polygraph Protection Act prohibits most private employers from requiring or even requesting a polygraph, and an interviewer who implies otherwise has damaged the case rather than moved it.

In a unionized workplace an employee who reasonably believes an investigatory interview could lead to discipline may request representation, and the interview waits until that is resolved. We brief the client on this before the session rather than discovering it at the door, and the same briefing covers state recording law, which decides whether a recorder may run at all.

Recording consent is the rule that most often decides the method. Roughly a third of states require every party to consent before a private conversation is recorded, and in several of those an unlawful recording is a criminal matter rather than a procedural objection. Where consent is required and withheld, the file is built on a signed statement and contemporaneous notes instead.

Where an outside investigator is engaged, the Fair Credit Reporting Act's notice and summary-of-rights provisions apply, which is why the engagement is documented rather than informal. In a unionized workplace, representation rights attach to investigatory interviews that the employee reasonably believes could lead to discipline. Federal and state wage rules decide whether the interview is paid time, and in most cases it is.

We do not offer legal advice, and we do not present an investigator's view of the law as though it were counsel's. Where a case sits near a line, the client's lawyer is in the room or on the phone before the interview begins.

Every investigation ends somewhere: a dismissal, a restitution agreement, a bond claim, a police referral or a control change with no personnel action at all. Each of those needs something slightly different from the file, and the report is written before the decision is made so the decision is made on the record rather than on the interview.

The report separates what the exhibits establish from what remains open. Losses are quantified by transaction and date rather than by estimate, because an insurer or a bond underwriter will ask how the number was reached and an estimate is the answer that loses a claim. Conclusions are limited to what the documents support, and the language is neutral enough to be read aloud in a hearing.

For multi-site operators, one numbering scheme and one report format run across locations, so a regional manager, counsel and the carrier are reading the same document instead of three versions of it.