It's also often the case that most participants are playing fair, but there are one or two who step way over the line. A friend of mine used to work in a place selling baked goods. One of the perks was that if there were any cookies left over at the end of a shift then the staff could take some before the batch got dumped. This went on happily for years until one day an email came in from head-office, stating that all food was to be dumped at the end, no freebies, etc. turned out that a manager at another store had been deliberately baking up huge batches of food to be taken home at the end of the night (think a few crates of cookies to cover the neighbours kids birthday that weekend), far beyond what had been considered fair game by the company.

These kinds of perks always seem to get ruined by that one idiot who goes overboard.

This was how we lost a discount on GE appliances at Microsoft; too many employees buying and flipping the appliances. Same thing with our (super sweet) video card discounts; 75% off video cards straight from nVidia lasted about six months.

I don't understand that reaction, one person did it so EVERYONE must be punished? Why not simply fire the person, charge them with theft, and sue them to recover costs making an example of them for anyone else who may consider doing it?

Jack Welch called it the corporate immune system. Once you've been hurt, you tend to over-bureaucratize the response to ensure that it never happens again. I think it has to do with the fact that human psychology tends to over-value possible negative outcomes vs. possible positive outcomes, as well as a certain amount of future discounting, plus social signaling to show the problem is being taken seriously: you put a stop to the very visible, very current, negative event with little regard for a possible, future, positive loss due to bureaucratic build-up.

It's irrational, but so is most management in practice.