Employee theft costs U.S. businesses as much as $50 billion annually, according to estimates from the U.S. Chamber of Commerce. "Inc." magazine reports that some four in 10 managers have fired an employee for theft. If this many get caught, countless others may get away with it. If you find out a co-worker is stealing from your employer, you must handle the situation with care and caution.

Verify the Truth

Before you do anything about a co-worker you suspect of employee theft, verify that you know the scope of the problem. Carefully monitor the situation. Take notes of specifics such as the time and date of the theft, where it happened, exactly what was stolen, and any other details that will help you present your case to your superior. Note changes to the company's inventory, if possible, to help substantiate your claim. Do not confront the suspected thief or accuse him of theft. Keep it to yourself until you have built up substantial evidence to approach the proper company authorities.

Plan Your Presentation

Do not assume you should go to your own boss with your findings. Instead, consult your employee handbook to find out how to proceed. Your handbook should outline who to approach about the situation, or provide an anonymous theft hotline. If you are supposed to go to your direct supervisor, make sure she is not involved in the theft herself. If you suspect your manager of either being involved in the theft or being close friends with the suspected co-worker, be prepared to present your findings to a human resources manager or another supervisor. Make copies of all the documents you have collected related to your findings to be sure that nothing is lost in the investigation.

Present Your Findings

Request a private meeting with your manager or HR representative to present your findings. Also, request that another member of management or HR be present as a witness to the proceedings. Be honest and detailed in your presentation and answer any questions the others might have. Present any notes and other documentation you have gathered. Remain calm and objective throughout the meeting so that it is clear you do not hold a personal grudge against the suspected co-worker. Demonstrate how you searched every way you could to find another plausible cause of the missing items other than theft.

After the Presentation

Keep your findings confidential after your presentation, regardless of the outcome of the case. Do not share the case details with anyone unless you are asked to by your superior as part of prosecuting your co-worker. Do not attempt to contact your co-worker in any way during or after the investigation.