Journal of Business Ethics Education 12.

© 2015 NeilsonJournals Publishing Ref. No.: JBEE12-0CS3

This case study has been peer reviewed by the editorial board of the Journal of Business Ethics Education (JBEE). For further information on this
journal please visit the JBEE website at www.neilsonjournals.com/JBEE

Zoie B’s Apparel: Theft by Employees

Shafik Bhalloo
Kornfeld LLP, USA and Simon Fraser University, Canada

Kathleen Burke
Simon Fraser University, Canada

Abstract. Zoie B’s Apparel seemed like a perfect place for Samara to make tuition money as she worked her way through university. She liked

Authorised for educator review use only by Naeem Tahir, Riphah International University. Expiry date 11-Apr-2022
her job, made friends with co-workers and had a supportive manager, Jessie, who accommodated her school commitments and planned to promote
her from clerk to assistant manager. The ease of work, however, came to a halt when Jessie asked her, along with two co-workers, to participate
in a fraudulent refund scheme. Although her colleagues agreed to participate, Samara was conflicted. She had become accustomed to the steady
income, flexible scheduling and support of her manager. Now, all of that could be in doubt if she goes against her values and processes false

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returns.

Keywords: whistleblowing, employee theft, dishonesty, refund scheme, employee obligations, friendship.

Jessie is a store manager in the Vancouver location of Zoie B’s Apparel (“ZBA”), a moderately profitable international
women’s fashion store with over 100 locations in 65 countries around the world.
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While ZBA has struggled in the retail industry with flat sales and heavy competition from other women’s fashion
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retailers, for the first time in four years ZBA showed a modest rise of four percent in its annual net profit from its
worldwide store sales. This prompted the company to reinstate its Christmas bonus of $200 for full-time and $100 for
part-time employees in the profitable stores, a practice ZBA suspended during the non-profitable years.
Jessie initially secured a position as a sales clerk with ZBA Vancouver seven years ago. When the store manager
decided to move to ZBA’s Toronto, Ontario location, she recommended Jessie to ZBA’s Western District manager as
her successor in the Vancouver store. The Western District manager met with Jessie and immediately took a liking to
her. She hired her on the spot to replace the store manager.
While Jessie’s promotion to the store manager position came with an increase in pay, it was only marginally more
than the sales clerks’ she supervised made and certainly, not sufficient to allow her to comfortably support her family.
Jessie resides in Vancouver, British Columbia with her disabled husband and their twin fifteen-year old daughters.
She is the sole breadwinner in her family. Jessie’s husband was injured at work in an industrial accident five years ago.
He was permanently incapacitated and has been unemployed ever since. He receives a small disability pension, which
partially pays for the family’s very modest two-bedroom rental apartment.
The twins, grade 8 students in the local high school, have friends and classmates who frequently wear the trendiest
teen fashions and gadgets supplied by their well-to-do parents. The girls often asked Jessie to buy them expensive
clothes, shoes and accessories but Jessie was unable accede to their requests. As the sole breadwinner in the family,
Jessie has more pressing concerns to deal with such as unpaid bills for utilities, credit card debt and transportation costs
for the family. Her income and her husband’s disability cheque did not cover all of the family’s costs and Jessie almost
never had any money left over at the end of the month. In fact, she often had a deficit that she covered by using her
credit cards. She found herself with mounting credit card debt and no way to pay the balances when they were due.
As a store manager, Jessie was privy to the store’s sales and knew that her store was doing very well relative to
other ZBA stores. She approached the Western District Manager and requested a 10% increase in her salary but was

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 2 Ref. No.: JBEE12-0CS3 Zoie B’s Apparel: Theft by Employees

informed that ZBA’s head office set salaries and she had no discretion in the matter. The District Manager cautioned
that it would be futile to ask the head office for a raise as past efforts by others had been met with swift rejection. As a
result, Jessie retracted her request for a raise.
While the retail clothing industry is known to pay their staff relatively low wages, ZBA, in particular, has a deserved
reputation for paying its staff the lowest salaries in the industry. Most of the employees at ZBA stores were transient
part-time workers between the ages of 18 and 25 years looking to make extra pocket money. They did not have serious
objections to making minimum wage working at ZBA because they did not carry the responsibilities of supporting a
family like Jessie did.
With mounting debt and family pressures, Jessie was growing resentful. She felt that she had little to show after
working for ZBA for seven years. She believed her prospects were limited at ZBA and felt unappreciated and
undervalued. Desperate to earn more income to support her family, Jessie came up with a fictitious refund scheme that
involved processing a transaction as if a customer were returning merchandise, even though there was no actual return.
She discovered a weakness in the automated payment system, which allowed her to process false returns and then credit
herself using various pre-paid Visa cards.
After implementing the refund scheme for a couple of months and supplementing her monthly income by $300 to

Authorised for educator review use only by Naeem Tahir, Riphah International University. Expiry date 11-Apr-2022
$400, Jessie was concerned that ZBA would find it suspicious that she processed a disproportionate number of refunds
relative to other employees. As a result, she attempted to recruit three young sales clerks, Samara, Kennedy and
Candice, to join her scheme. Jessie felt that their involvement would divert attention from her and enable her to share

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in the proceeds of their fraudulent transactions while keeping the refunds she processed independently of them. She
picked these particular employees because she had mentored them at ZBA and knew they each needed extra money.
Samara, Kennedy and Candice viewed Jessie as a mother figure and often confided in her about their personal problems.
Moreover, Jessie held firing and disciplinary authority over them and decided what shifts, if any, she would allocate
them. Therefore, Jessie felt she could trust them to participate.
Jessie felt particularly confident that Samara would be a willing participant. She had consistently helped Samara
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when she needed flexible hours to accommodate her class commitments. She also let Samara work extra shifts and
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overtime in those instances where she struggled to keep up with her own bills. Moreover, Jessie had repeatedly told
Samara that she would recommend her for an expected assistant manager position opening. However, while Kennedy
and Candice opted to join Jessie in making false returns, Samara told Jessie that she needed to think about it.
Samara very much liked Jessie and valued her mentorship and support, but she was brought up to be honest and
respect other people’s property. She remembered the great hardship her parents experienced in uprooting the family
from East Africa to immigrate to Canada with a view to providing her and her older sister safer and better lives. She did
not want to disappoint her family. Yet, Samara also wanted to continue her studies and needed a steady income to do
so. Her friends often complained about not getting enough hours or flexibility where they worked and she had both at
ZBA.
Although Jessie assured Samara, Candace and Kennedy that there was no risk in participating in the refund scheme,
Samara feared the likelihood of being caught. She had greater aspirations than working for ZBA for her entire career.
She wanted to eventually go to law school. Samara did not want to jeopardize her job, future plans and potential career
in law if she were caught, fired and received a criminal record.
After a week, Samara was struggling to avoid Jessie, Candace and Kennedy. Jessie, in particular, was growing
increasingly impatient with Samara’s indecision. “Look, I have gone out of my way to help you,” Jessie said, “but I am
no longer sure that you are assistant manager material.” What should Samara do?