You say we should have given a warning for stealing a 99p pair of socks, if that same person had stolen a £500 dress from the same customer would that equally have merited just a warning.
No, that would constitute a significant theft and I would fire him or her.
Following the formal warning for the 99p pilfering any repetition would lead to immediate dismissal, even if it was again for only a trivial amount. It's a question of scale and proportionate response. Zero tolerance schemes take any human judgement element out of it, if that's what you want then it logically leads to a return to the so-called "Bloody Code" of the 18th Century when there were over 220 offences for which the penalty was death, including the theft of any item over one shilling, which was equivalent to about £25 in today's currency.
The point I'm making is that, in my opinion, a business should not be run as if it were an army unit where stern, inflexible discipline is essential. A business's major resource is its staff. If you treat staff in a draconian way they will have no real respect for you other than the fear of losing their job and they will not enjoy their work (even in a warehouse) and give of their best. An employer has a duty of care towards his or her employees. Let's consider two scenarios - if the sock thief is a young man then he needs to learn the lesson that pilfering is not tolerated without disciplinary action being taken; if the sock thief is an older, experienced employee with an unimpeachable record up to that time then there may well be something wrong with him. In both cases you could simply fire these guys but if you used your own experience and judgement of people you might decide on a better way such as, as I said before, a formal warning.
A touch of humanity in management and in dealing with employees is not a sign of weakness but a sign of strength. It can be a key factor in building trust and reinforcing the company's commitment to its employees and can help improve staff retention, motivation, boost productivity and encourage greater employee engagement with the company which will only help the bottom line in the end.