What to Know About Retail Background Checks


Guide to Retail Background Checks

According to recent research, the average turnover rate in the retail industry for hourly positions has reached new heights. In 2021, the turnover rate was measured at approximately 68%. By 2022, that number had risen to nearly 76%, an incredibly high staff turnover rate that has put many retail companies on tricky footing. In some cases, companies have had to reduce hours, cut back on business days, or deliver a reduced customer experience. With an almost continuous need to maintain a steady pace of hiring, employers should think carefully about the role retail background checks play in the process.

Retaining retail employees has always been challenging, but changing economic conditions, shifting expectations, and other pressures have combined to make the problem more pressing than ever. For retailers, this presents a significant and multi-faceted issue. How can you keep up with consumer demand without compromising your brand's values or customer experiences? Attracting more applicants and making quick work of hiring the best candidates can help.

The first half of that equation is primarily a business decision. How much can you afford to increase compensation? Are there better benefit packages you could offer? How can you improve the company's culture and make it a great place to come to work every day? The answers to these questions will partly come from the realities of your business and your locale. What about the second half of the process? Fast hiring is crucial, but you must approach it correctly.

Companies must take time during the process, even with a pressing need for new employees. For example, even though some companies have chosen to skip the pre-employment background checks, retailers face unique circumstances that make vetting an essential procedure. Why do retail stores do background checks? 

Let's explore some of the statistics and insights most relevant to that question, then dive into what types of due diligence retailers should consider factoring into their process.

Important Statistics Retailers Should Know

The need to use background checks in the hiring process is often a concept that remains in the abstract for most retail business owners. Especially for local small businesses that may never expand beyond a few dozen employees, any time added to the hiring process can mean taking attention away from other business-critical tasks. Even for larger companies, including grocery store chains such as Kroger, background checks demand attention and energy. However, there are many good reasons to invest in a streamlined process that opens the door to making more fully-informed hiring choices.

A look at the numbers reveals the challenging environment facing retailers today, primarily when many such businesses often operate on thin margins and rely on seasonal shopping patterns. What should you keep in mind for the risk of retail theft to the potential for actual fraud in the back office? 

Statistics About Retail Theft

While many retailers think of shoplifting and external theft as some of the biggest threats facing their business, the reality is that internal stealing by employees often costs companies far more. One recent study found that a business’s average loss for employee theft incidents was around $1,550, or nearly three times the average loss due to shoplifting. That number does not factor in the costs of terminating the employee and going through the entire hiring cycle to replace them. 

In that same study, more than half of responding businesses reported a loss of $1,000 or more in the last year. These losses originate in many places. Employees may steal directly from the till, but they may more often steal merchandise. In one report by the FBI, researchers found that 60 percent of employees admitted they would steal from their employer if they knew they could do so with impunity.

These statistics can tell a scary story but should inspire vigilance. Not only should retailers implement security solutions and procedures that make on-the-job theft less likely, but they should also endeavor to hire individuals who may represent less of a material risk to the company.

Statistics About Retail Fraud

Direct theft from your business is one of many ways that unsavory employees can negatively impact your bottom line. Fraud can be a significant problem, too. One report analyzing many cases in 2020 found that nearly two-thirds, about 57%, of all fraud cases involved the company's employees. Almost half of all those crimes occur in job roles with direct access to funds or documents such as invoices. Fraud can also come in the form of time theft, such as when employees doctor their time records or record worked hours where they were not present or fulfilled their duties.

While time theft is more often a problem with rank-and-file retail employees, fraud is a problem for positions of greater authority. For example, shift leads responsible for counting down tills at the end of the day directly handle large volumes of cash. Managers working on back-office tasks could face the temptation to embezzle funds because of poor oversight or even personal financial pressures.

Retailers must be aware of these risks when hiring for positions that directly impact the company's financials. Credit checks, though not often a component of retail hiring, grow in importance when filling positions of financial responsibility. With the widespread potential for fraud and huge damages, employers must take care to reduce the risk of fraud.

Statistics About Retail Employee Retention

Background checks for retail jobs help you do more than fight back against fraud or reduce the risk of theft. Selecting the right people to work for your business and building a safe, positive atmosphere is essential to retaining employees in a sector that has traditionally always experienced high turnover rates. However, the reality has grown more pressing in recent years. While annual turnover has generally been about 60%, an unusually high attrition rate has developed at every retail level.

In the summer of 2022, one study reported that nearly half of all regular retail workers wanted to exit the industry and take jobs elsewhere. Even more stunning, roughly 63% of retail managers felt the same way. This represents a significant drain on experience and capacity for retail companies. 

While improving employee retention necessarily demands investigating elements such as compensation, benefits, and the working environment, you should also pay attention to the quality of the staff you hire. Choosing those with a vested interest in keeping a steady job can be a boon to your business, which may mean expanding your criteria or embracing "second chance" strategies. At the same time, you should strive to hire those who work well together without the threat of workplace discord or violence.

What’s in a Retail Background Check?

Although a background check is not a 100% guarantee against future wrongdoing, it still provides an important first line of defense. Knowing what red flags to look for and recognizing suspicious or concerning signs in a background report is a skill every hiring manager should develop. So, what should a retail store background check involve? 

The answer can vary slightly depending on the type of position where you need a new employee. For example, someone who will mostly work stocking merchandise on the sales floor or assisting customers may not need the same scrutiny as someone handling the daily take from the cash registers during closing. However, even seasonal staff who will only be present for a few months should undergo screening. Let's explore the tent pole elements of a thorough retail background check and consider when each type of check is best added into the process.

Alias Screening

How do you know that the individual you're screening has given you their real name? Can you be sure that you've found all the possible records associated with them? Starting your process with a product such as the US AliasSEARCH is a convenient way to cover all your bases and ensure the most thorough check possible.

You may encounter applicants who committed crimes and received convictions under variations of their name or even entirely unrelated aliases. You can uncover any known aliases associated with your applicant using Social Security numbers. The related US OneTRACE can also help you discover prior addresses used by your applicant so you can narrow your search of other records as you go on. For most retail employees, an alias check before digging deeper is an intelligent way to start.

Criminal Record Checks

The cornerstone of the background check process, criminal record checks are what most people think of when they consider vetting in the hiring process. While a past criminal record does not guarantee that someone will commit wrongdoing again, it is an employer's right to understand more about those they plan to bring into the business. Though criminal background checks do not have predictive powers, they can provide important context to the hiring process that may encourage an employer to move forward or move on to a different applicant.

There are several kinds of criminal background checks, and the availability of records can differ from state to state. Generally, retailers should aim to use the convenience of far-reaching background checks to uncover as much potentially relevant information as possible. The US OneSEARCH is the best tool for this job, providing instant results from a professionally built database of criminal records from state systems nationwide. 

A county court search in your local and surrounding areas, especially in metro regions, may also reveal more recent information about crimes and ongoing trials that may influence your decision. Don't expose your business to future claims of negligence in hiring by foregoing the criminal background check. When it's so easy and fast to acquire this information, it should be a part of every new hire's evaluation.

Pre-Employment Drug Testing

Intoxication on the job can put coworkers and the public at risk. It can also impact productivity and negatively influence how others perceive your business. Habitual substance abuse could also be a risk factor for other business-related crimes, such as theft or fraud. Therefore, many retailers, even among the top ten largest employers in the USA, continue using drug screening as part of the hiring process.

Be aware that the landscape has significantly changed in recent years with the spread of medicinal and recreational cannabis. In some jurisdictions, cannabis use may not be a legally disqualifying factor for businesses to consider. In others, the widespread nature of cannabis use may mean that you're more likely to encounter positive results. However, drug screening programs do still provide useful insights into the consumption of so-called "hard" drugs such as methamphetamine or opiates. 

Create a drug and screening policy that makes the most sense for your business, but do not apply it unevenly across the workforce. If you plan to drug test one applicant, plan to require the test of all prospective employees and evaluate the results based on consistent criteria.

Preventing Sexual Misconduct

Sexual harassment in the workplace is a serious issue that can ultimately escalate to even more serious crimes, including assault. An employer must create a safe and productive atmosphere for everyone. In a retail environment, that responsibility also extends to the shopping public. You should never need to worry about a staff member harassing a customer.

To some extent, preventing workplace harassment requires strong business policies and an attitude emphasizing active enforcement's importance. To be sure, companies that make equality and safety an essential focus of their company culture can improve their confidence in handling such incidents. Even so, there are steps retailers should take before hiring to reduce risks even further.

Checking state sex offender registries is a critical step in combination with the criminal background check process. Not only is this information you deserve to know, but it might even be illegal to employ certain registered offenders depending on your business location. Always include this step in the process for all applicants.


Most retailers don't have specific educational or licensing requirements for the average employee. After all, you don't need a state certification to be able to operate a cash register or restock clothing racks. However, those working in back-office roles and as managers may need to demonstrate some credentials to get the job. Given how commonplace it is for individuals to lie on their resumes, you shouldn't blindly trust what applicants tell you. Conducting verification checks on education and prior employment provides you with valuable information.

For all employees, reference verifications are an important and often overlooked step. Rather than call references, some employers only check what an applicant supplied them in the first place. This can leave important information on the table, even if references typically will speak well of an applicant. Using a third-party service like ours to handle the legwork involved in verifications lets you turn over every stone in search of important information.

Should You Check Credit Reports When Hiring for Retail?

A credit check is usually unnecessary for a regular store employee. However, it’s recommended for staff with access to financials. This step is crucial if you plan on keeping a licensed accountant as a professional on your payroll. As we noted before, most retail fraud occurs from within companies. White-collar crimes such as embezzlement can cost businesses tens or even hundreds of thousands of dollars. A quick credit check to look for signs of financial distress or pressure is a smart addition to the process for the few employees working in the most sensitive positions.

The Importance of Ongoing Monitoring

The vetting process should continue as soon as you make the hiring decision. A background report that looks acceptable to you today because of unrelated or non-existent legal troubles in the past may sometimes look different in the future. Next week, next month, or even years later, employees might run into trouble with the law. Understanding these incidents and, more importantly, learning about them as soon as possible is an integral part of protecting your business.

Consider an employee who gets caught committing a burglary or robbing a different store. Would you remain confident in employing them at your place of business? What if an employee faces accusations of a serious assault or even a sex crime? Should they retain their job? Ask yourself if the potential risk or the possible public relations fallout is worth retaining such a worker. Although these are individual employment decisions every business owner must make on a case-by-case basis; these examples highlight obvious instances where learning about new charges after hiring can make a difference.

How can retail businesses stay on top of such need-to-know information?

Ongoing criminal monitoring is the answer. Easy to implement with support from the right reporting agency, continuous monitoring provides you with an "always on" tool to ensure your business remains current on employee criminal history. For employers hiring individuals with prior criminal records, ongoing monitoring can also provide extra peace of mind with the knowledge that you can act swiftly on any new information. With regularly refreshed background information, you can cultivate the workforce you want and keep bad apples out of the bunch.

Doing the Right Thing: Compliance and Legal Concerns

Using background checks has been a common practice for decades in many industries. It is important to remember that even though they are a widespread and typical element of the hiring process, these tools do come with some strings attached. All employers, including retailers, must abide by specified rules and regulations to ensure that their hiring processes are fair. Because background checks can contain important personal information—and because you’re using them to make employment decisions—states and the federal government have chosen to regulate the use of background checks in many similar ways to credit checks.

As you seek to hire the most suitable candidates while protecting your business from bad actors, you cannot overlook the importance of compliance. Failing to follow the guidelines established by the law can leave you facing legal threats, fines, and bad publicity. Although rules can vary from place to place, there are expectations for every company. Doing the right thing by complying with the law is not just a way of protecting your business—it’s an important element of fairness in the economy. So, what are some of these responsibilities?

First and foremost is the need to comply with the Fair Credit Reporting Act, which classified background checks the same as credit reports. You must provide any job applicant with a standalone disclosure of your intent to conduct a background check. It’s vital that you do not include any unrelated information in this disclosure. Simultaneously, you must also collect the applicant’s signed consent to conduct a background check.

If the information in a background report causes you to deny an application or rescind a job offer, you must provide a copy of the applicant’s background report, send a pre-adverse action letter, and allow a reasonable amount of time to elapse. This is the applicant’s opportunity to respond with clarifying information or corrections you may need to know. If you do not change your decision, you must send a final adverse action letter, a statement of rights, and more information about the check.

When you use a retail background check, you must also comply with any local or state “ban the box” rules that may require you to delay the check until after making a conditional job offer. Always research your state’s rules and explore your local jurisdiction’s laws to ensure compliance throughout the process. Once you’ve established a fast, repeatable, and legal process, your business is ready to meet its hiring needs throughout the year, with safety and accountability at the forefront.


Do retail jobs do background checks?

Yes, most retail companies require background checks today. From big box retailers such as Target to traditional department stores such as Macy's, background checks are a standard part of the hiring process. Some retailers, including Macy's, wait until they provide applicants with a provisional job offer before conducting a background check. Others may use them earlier, depending on local and state rules. 

The extent of the background check can vary based on the job role. For example, managers or individuals who will have access to daily cash deposits may undergo a more in-depth check to ensure that the business can reliably establish trust in the employee.

What companies don’t do background checks?

Most major retailers use background checks due to the risks that could stem from potential negligent hiring or wrongdoing on the part of an employee. However, a small but growing number of businesses have chosen to skip mandatory pre-employment background tests or drug tests to provide opportunities to those with troubled pasts. These are more often small businesses run by independent owners, as even thrift stores such as Goodwill typically use background checks. 

However, with the growth of "clean slate" and Fair Chance laws across the country, many more job seekers could qualify for a job before employers see the results of their background check. These efforts, combined with those who forgo checks, continue to expand opportunities for those with criminal records. Ultimately, each business owner must decide on a policy that makes the best sense for their approach to employment.

How much time will it take to perform a background check?

Background checks can vary significantly in length based on the type of check and the level of detail you seek. In some cases, state-specific restrictions on background checks can also introduce bottlenecks into the process, such as when you must rely on the state police to furnish a report. Generally, you can complete criminal background checks in a relatively short time. Products such as the US OneSEARCH provide instant results you may begin reviewing immediately.

Checking references, verifying educational status, and checking in with prior employers all add to the turnaround time. These steps necessarily require digging deeper to ensure accuracy and relevancy. In most cases, a typical background check may take several business days, including the time to obtain and review results. In busy jurisdictions and those with special rules, checks may sometimes require one or more weeks to complete.

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