I had an employee who quit and had been gone for about a month or so when another employee who had quit about the same time call me and ask when he was going to get his last pay check. I told him it was already out with all the other checks and it had been picked up and cashed. He told me he never got it.

We have a place designated where I put it the checks and the employees pick them up at the office.

After checking with my bank, I got a copy of the deposited check, and the one employee signed this other employees check over to his name and cashed it. I contemplated my next move. I knew I couldn't let it go. The amount wasn't much, I could have easily just paid the other employee his money and let it go. So, I wanted to give the guy a chance to make it right, but also let him know it was serious.

I called him up and as I figured, he didn't answer. I left a message that said "I know what you did. It took a month to figure out, but I know it was you. I won't ask any questions, but you have til the end of the day to have the amount you stole in my hands in cash, or else I'm calling the police."

Not 5 minutes later he called and said he would be right over and asked the exact amount, because he didn't know off hand. Sure enough he dropped off the cash and that was the end of it...or so I thought.

6 months or a year later I got a letter in the mail from this individual. He stated how he was in a rough place and had been in trouble with other people, the police, family, money, etc. Then I did what I did and showed mercy. He wondered why I didn't just call the police in the first place. He said he knew or figured that I was a " religious man." He thanked me for not turning him in and giving him a chance to make it right. He started the process to turn his life around, got off drugs and alcohol. I imagine the letter was part of this process, a 12-step AA program maybe?

Anyway, long story, but the point is, I would give him a chance to come clean and make it right before you severely damage his future with the company. At the same time, you should definitely not replace the item with your own money and pretend it never happened.