Accused of Theft Over an Employer Error

A retail employer allows its employees to be paid with a prepaid debit card. An employee received a card, and then went to a cashier and received the balance in cash, roughly $800.

When the employee got home, he called the 1-800 number on the debit card to check its balance. Instead of being told that the balance was at or near $0, he was told that the balance was $1,600. The employee then cashed out that money.

A few weeks later the employer contacted the employee to find out what happened to the money. They explained that the cashier who cashed out the card had accidentally processed the payment as a credit to the card instead of a debit. The employee said that he spent the money, and was not in a position to pay it back. The employee was then fired for theft, and told that the matter was going to be referred to the police.

Could the employee be prosecuted for theft, based upon his use of money that the employer placed on the debit card?

Yes, a theft charge is possible. Even if the employee didn't figure out from the numbers what had happened, the employee knew how much he was supposed to be paid, knew that he had cashed out much or all of the value of the debit card, knew that the balance should have been at or near $0, and knew that the money on the card was there by virtue of somebody's mistake and was not his.

The employer's preference would almost certainly have been for the employee to report the issue as soon as it was discovered. But the key issue here is that the employee took and spent money that he knew was not his.