Retail Update: Loss Prevention
July 1, 2009-- Home Accents Today,
The recently released 2008 National Retail Security Survey shows an increase in the rate of retail theft for the first time in six years. Preliminary results from the survey, an annual collaborative effort between the National Retail Federation and the University of Florida, were released in June at the NRF's Loss Prevention Conference & Expo in Los Angeles.
Richard Hollinger, criminology professor at the University of Florida, said the increase signifies that criminals have found a way to manipulate and corrupt the retail industry. "Many retailers are being forced to decrease their current expenditures because of the state of the economy and the cutback in consumer spending, which leaves new opportunities for thieves to take advantage of companies."
According to the survey, the rate of retail shrinkage in 2008 rose to 1.52% of sales (up from 1.44% in 2007), translating into losses of $36.5 billion. Almost half (44%) of retail shrinkage in 2008 was due to employee theft, at $15.9 billion. Shoplifting accounted for $12.7 billion (35%) of losses. Other losses included administrative error ($5.4 billion, 15% of shrinkage) and vendor fraud ($1.4 billion, 4% of shrinkage).
The June Expo also showcased new products to help retailers increase store intelligence and limit losses, such as: software that analyzes video to detect unusual behaviors and track would-be shoplifters through a store, anti-shoplifting tags that protect items more securely, point-of-sale analytic software, and people-counting and remote monitoring technologies.
The NRF offered retailers free access to the Expo floor, and registered conference attendees could choose from 40 hours of seminars on topics ranging from store security, law enforcement and litigation, to legislation and communicating during a crisis.
Loss prevention executives from Home Depot and Macy's presented "Shoplifters' View of Merchandise Protection Standards: Their Dirty Little Secrets," the result of extensive interviews with more than 100 apprehended subjects on topics dealing with the hows and whys of shoplifting.
The findings shed some light on the motivational aspects of shoplifting as well as what might deter such actions. For example, close to 70% of the offenders said the decision to take something wasn't made until after they entered the store. About a quarter of the shoplifters even made a purchase at the store that same day, and almost all said they'd made no prior visits to the store with the intention of "scoping" out security measures in place.
About 45% didn't know where to look for security devices before entering the store. Those who were aware of such devices said they shoplifted anyway, thinking they could beat them, they would operate in a blind spot or the devices wouldn't work.
When asked of their plans for the shoplifted items, the majority, over 80%, said they planned to use the item; the remainder planned to sell the item on the street or return it for a refund.
About as many offenders, 75%, said they did not know what they wanted prior to entering the store. Half of those questioned say they took the item because they didn't have the money to pay for it and about 20% said it was an impulse decision.
Most items were concealed in the offenders' clothes (60%). About 20% concealed items in a bag or purse, sometimes using a foil-lined bag. Slightly more than half (51%) attempted to remove security devices from the items, and 70% removed items from their original packaging, before leaving the store.
Asked what they considered to be effective security measures or deterrents to shoplifting, the offenders said numerous active employees in close proximity, especially with walkie talkies, are considered a threat. Uniformed guards and police can be a threat if they appear alert and are roving. Cameras are an effective deterrent only if they appear to be monitored and cover all concealment areas.
Also included in the conference lineup was a look at how social networking sites are being used as investigative tools, presented by loss prevention executives from retailers Dunham's Sports and Barnes & Noble. The presenters discussed how sites such as Facebook, Myspace, Linkedin and Youtube increase the amount of information available on a person, and can sometimes provide a "behind the scenes" look at what's happening in your business.
In one instance, a search of Facebook turned up a video taken by a store employee that not only violated the store's policy against videotaping in the store but resulted in three employees admitting to stealing $1,600 in merchandise. The information revealed on another employee's Myspace page verified suspicions that he was shoplifting, and further searches on eBay revealed that other employees were involved.
The presentation also suggested verbiage for the employee handbook regarding the use of technology, to prohibit: discriminatory, defamatory or harassing communications; abusive, profane, offensive or obscene language; disclosing sensitive or confidential information about the company; unauthorized downloading or use of trademarked material.
For more ideas and information, including a downloadable list of "Simple solutions to protect your independent retail store," visit the NRF's Web site at nrf.com/lossprevention/2009/handouts.asp.
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