Solutions To Combat Shoplifting and Employee Theft

Shrinkage – Employee theft, shoplifting, clerical and vendor errors-is an issue that big and small retailers have in common. From Wal-mart to Target and whole-sellers like Costco, shoplifting is a common occurrence that cost the retail industry billions of dollars each year. 

Many small business owners in the retail industry choose to not prosecute the theft.  The reasons? The cost associated with prosecuting a shoplifter or employee theft is too costly for many of them and believe at the end of the ordeal it is in their best interest to take the theft as a business loss. 

For the big retail chains, theft is important and the measures they take to prevent, prosecute and avoid it are serious.  The profits are greatly diminished when shoplifting, employee theft, and vendor or clerical errors occur frequently in their business.

How can they be profitable if they do not combat a financially crippling problem?

 The retail industry’s shrinkage average nationwide is between 1%-2%, and for many retailers that is a big chunk of their profits that will disappear every year.  Big retailers like J.C. Penney and Costco have implemented shrink measures that have seen shrink reduction decrease tremendously.  Costco shrink’s rate is just 0.11% to 0.12% of sales and J. C. Penney has seen a decrease of 20% reduction in shrink dollars. 

The security measures they have been implemented in those stores are the big difference between out of control losses and security measures that are working out for them to prevent theft in their stores.

For many of these stores, implementing technology to combat theft is the first step they take in their quest to prevent it.  

Personnel training is another big change they take into consideration when dealing with theft.  Research has shown for many years now, that a happy employee is an employee that will, in the long run, be an asset to your business. Training employees, and providing them with a good salary are investments that many companies take seriously, and research has shown happy employees provide a better customer experience that results in less theft.

Shoplifting and employee theft are hard to combat and they can be hard to understand when looking at profits. There are solutions your store can implement to combat them and to give you peace of mind. Finding a solution is necessary and too important to ignore for too long.

An Attitude Of Service Or Just An Attitude? Attitudes Affect Customer Service

This is going to seem a bit odd to some of you but I want to know if you have an attitude? Store owners, do you have an attitude? Store Managers, do you have an attitude? Has anyone taken a look at the attitude of their employees? EVERYONE has an attitude, the statement isn’t necessarily a negative it can be positive. The problem is we have grown accustomed to thinking of it with a negative connotation. Why is that? Because in some form or fashion we have adopted the idea that an “attitude” shows our independence or ability to be self-reliant regardless of what others think. At times it can be very course and abrasive to others. If that is your “attitude” how does that relate to your customers, or those who work for you? I would like you to consider for a moment that an “attitude” may look more like a chip-on-the shoulder than some sort of independence (in some cases if looks like a boulder more than a chip).

     An owner with a poor attitude makes the job more difficult for the managers who work for her or him. The “I’m the boss” temperament may be unstated but if that is how an owner thinks it can reflect into how they give direction and interact with their managers. It frequently means that no one else can have a better way of doing things and leads to a stale operation. I will also tell you that the negative attitude rolls downhill.  The way you interact with your managers will be reflected in how they interact with the store associates and they, in turn, have attitudes with the customers. I have seen it in action and I can tell you I have experienced it and have allowed it to impact my interactions with my team in spite of my best intentions. By the end of a workday, everyone leaves in a grouchy mood. 

     The attitude of the owner affects the attitude of the managers has a direct impact on your customers who don’t have to shop at your store. I happen to work for a company that has two stores in the immediate area. On more than one occasion we have heard comments from customers that they don’t like to go to the other store. They tell us the customer service is poor and the employees are not friendly. On the other hand the manager of the store where I work makes a point of telling the managers they are to do whatever they can to keep customers happy (within reason and without violating policies). Employees may get busy but they enjoy working for this manager. The atmosphere is welcoming and we make every effort to greet our customers and offer assistance when they walk into the building. I have gone into the other store and the climate is different. If a greeting is offered it is more of an obligatory hello that a genuine one.  

     What is the climate in your store? What do your managers and employees think about your management style? If you aren’t concerned think again. If your store employees are providing poor customer service to customers because of the treatment they receive it as a direct impact on sales and a direct impact on theft prevention. Shoplifters who have been interviewed have said that they target those stores where employees are unhappy. They don’t have to worry about someone trying to give them too much attention. If shoplifters aren’t receiving service, neither are your customers and that means no one is trying to sell let alone up-sell for a store. 

     Customer service starts with leadership. When the management team seeks to make the climate one where employees enjoy coming to work that attitude will be reflected in the interactions between workers and customers. Owners and managers cannot assume the team is happy. Truly anonymous employee surveys will help gauge what employees are thinking. They can also be a tool for seeking ideas about what employees might want to see done differently or an outlet for ways to improve. Happy employees make a world of difference. What is the climate in your world? Is everything great or is an attitude adjustment in order? 

Tips On Merchandise Placement To Satisfy BOTH Sales And LP

Do you want to know one of the fastest ways to make a Loss Prevention Manager cringe? Place high dollar merchandise within a few feet of your entrance/exit doors. Another great idea is to stack out a pallet of 32 inch LCD televisions for that Black Friday door buster with no protective devices on them because you know how fast they are going to go out the door (the L.P. Manager knows how fast too but from a different perspective). Frequently store managers want to put merchandise on display near the front of the store where customers are certain to see the items and entice them with an impulse buy. The downside to the strategy is that it creates a major opportunity for crooks to sneak merchandise out quickly without being noticed. They wait for a group of people to enter or leave, pick up the merchandise and blend in with the crowd then exit with the goods. I’ve seen it happen.

     On the other side of the fence you have Loss Prevention Managers out there who want to lock up everything. They aren’t thinking about what drives sales or impacts the shopping habits of customers. Their concern is that the merchandise is placed in such a way that it can’t be stolen. I’ve been one of those managers and I thought I had the best interests of the store in mind as I sought to keep valuable new displays on a tight leash. Keep the merchandise in the store and out of the hands of criminals and you save stock shortage. Doesn’t THAT drive sales for the store? Customers can’t purchase what has been stolen. Keep those goods in the store and sales will soar because paying customers can get their hands on it.

     There has to be a happy place where security and availability can meet. Merchants and Loss Prevention can find a common ground but they need to work together to do it. Having learned my own lessons over time I would like to share some ideas that can be beneficial to store sales objectives without creating a security risk to merchandise.

  • Coming from many years in Loss Prevention I want to first say to the Loss Prevention department; remember that the number one priority of the store is to SELL merchandise. Your job is to help do that and this means being a partner and understanding WHY a manager may want to place a product in a particular place. You should take a look at what the manager wants to do and offer constructive suggestions that can decrease the chances of merchandise theft without being an obstacle to the decision.
  • Before any new planograms are set or merchandise displays are placed, managers meet with L.P. and discuss what you are planning. L.P. may have suggestions to help make merchandise secure without compromising the desire to put merchandise in the hands of the consumers. There may be electronic article surveillance tags or labels that can be applied to merchandise.
  • If the merchandise is to be located close to the front of the store put it in a location near a cash register. Keeping products within the line of sight of employees is one way to deter theft.
  • Keep track of product quantities. This means several times a day taking a count of the pieces of merchandise on a display and tracking sales of those items. If you start to identify a theft trend then re-evaluate your merchandise protection strategy.
  • Don’t use locking display cases! Unless the item has a very high dollar price point there are alternatives available to stores to secure merchandise. There are security boxes and cases on the market that allow shoppers to pick up and handle goods without being able to actually touch the item.  These cases (such as a Sensormatic flexible safer for example) prevent shoplifting while allowing a customer to select an item and continue shopping (customers don’t like to wait for help at a display case).
  • If your store has closed circuit television then consider placing a camera and a monitor as a public view set-up. It discourages theft when people see that they are on camera.

New product displays attract customer attention and increase sales. When Loss Prevention and Store Management work together on these projects sales will be successful. Let’s not forget that shortage due to theft will also be minimized if not eliminated and THAT makes EVERYONE happy!


Tips That I Wish I Had Learned Before Entering Loss Prevention      

Loss Prevention is a wonderful career choice that can lead to other positions in retail. There are, however tips I wish I had known before I began the job that would have prepared me for the adventure I was about to embark on. I started out in a Loss Prevention Associate position after spending four years as a U.S. Air Force Law Enforcement Specialist and another 2 ½ years earning a Bachelor’s Degree.  I was offered the position and to be honest I went into it with the mindset that this was a Law Enforcement position in civilian clothing. There was nothing that really dissuaded me from the notion as I was taught to catch shoplifters, use closed circuit television cameras and electronic article surveillance equipment. I assisted with employee theft cases but these were few and far between. It was not until later when I had been a Loss Prevention Manager for several years before I started to understand the real role of Loss Prevention in a store. With this is mind there are some things that I would like share with those entering the profession that can be eye opening and prepare them for the job ahead.

  • You are not the retail police – Unfortunately it is easy to fall into the trap of believing you are an arm of the police department. You aren’t. You can and should build strong partnerships with police but you are not protecting the community. Your job is to make your store profitable. You need to learn about stock shortage and all of the ways it happens. Yes, you need to learn to identify, prevent and maybe catch shoplifters. You also need to add to that knowledge how employee theft occurs, how to identify it and investigate it. You also need to understand vendor processes, how to read invoices and credits. You should spend time learning and stocking freight and where operational shortage takes place. Become intimately familiar with cashiering procedures and cash office functions. Each of these areas of responsibility impact store profits and the more you know the better you become at multiple areas of the store.
  • Hiring and Supervision – You may only be starting as a Loss Prevention Associate but if you are smart you will partner with the hiring manager. Ask to be part of the store application review process. Learn to look for the red flags on a candidate’s application or resume that could spell trouble if that person is hired. You can be a valuable partner in helping in the hiring process. As a Loss Prevention Manager you will review applications, resumes and conduct the interviews. You will need to know your company’s hiring process and whether it includes a drug test or background check. While we are discussing it lets also talk about who you decide to hire. Hire people with skill sets that are different from yours. While I would not discourage you from hiring someone with Loss Prevention experience be mindful that that candidate may be more difficult to train. They will bring along training from other retailers that may not be in keeping with your store best practices.
  • Trainer and Leader – Get ready to train others and not just Loss Prevention personnel. You will be training store associates on electronic article surveillance alarm response. You will train cashiers on till tap and short change artist prevention. You will train employees on robbery procedures. You may work with the stock team on how to identify mis-shipped merchandise. Show them how improper stocking affects shortage and inaccurate merchandise reordering. You could be required to conduct new hire orientations. You will also instill in the whole team the importance of customer service as a means of reducing theft but also how it drives sales. As a leader you will request appointments to meet with other managers and discuss operational matters. The more informed you are in how things work the better prepared you can be to help improve operational procedures.

Clearly there is much more that a Loss Prevention professional can add to the store than just being a person who catches shoplifters.

     The core roles and responsibilities of the Loss Prevention team entail the reduction of retail shrinkage and even maintaining a safe shopping environment. You may not be a first responder but you could be the first person called to an accident inside or outside the store. Frequently it is the Loss Prevention personnel who are first called to find a lost car, lost child or stolen purse. You will be the one who has to calm an irate customer. Learn from these tips I am sharing. You aren’t going to be a police officer, you are going to be a Retail Loss Prevention Professional and that is a quite a job! 


Children shoplifting: how parents are using kids to steal for them and/or kids shoplifting on their own

I was once asked why I kept toys on my desk in my Loss Prevention office. I had two reasons, the first was they were collectible superhero figurines (The Tick to be precise) and the other was to keep children entertained. It is a sad fact in Retail Loss Prevention but there are children who shoplift, there are parents who shoplift and there are parents who use their children to help shoplift. As a Loss Prevention professional, it is not hard to handle an adult who steals. There may be anger, tears, and pleading but these are adults and they made a choice to steal so there should be consequences. What is not so easy to cope with is the child who has to sit in the office while the parent is being processed and does not understand what is taking place. There were many instances when I had to try to keep these young ones entertained as mom or dad were answering questions about the crime, providing personal information or trying to contact a family member or friend who would be willing to pick up the child. Add to the mix a parent who is throwing a conniption fit or making the scenario worse by bawling and wailing in front of the child begging you to let them go “Just this one time and it won’t ever happen again, I promise.” It becomes quite annoying. It also upsets the child who becomes a prop for the parent. The toys were my prop to entertain the children in a pinch.

     It may be hard to comprehend but aside from just shoplifting with their kids in tow, there are parents who use their children as tools or props to commit their crimes. What is worse than a parent who removes a price tag from a purse, straps it over their daughter’s shoulder and walks out with her and the purse? Well, it could be worse when the parent scolds the child and tells her she shouldn’t have done that when the parent is caught by Loss Prevention. Then there are the parents who walk through the store pushing a baby in an infant stroller with the little baby covered by a blanket. What can these doting mothers and fathers do with a cute little baby you may ask? It turns out baby strollers with blankets make great hiding places for designer blue jeans…MANY pairs of designer jeans. Aw gee, let’s not forget one of my all-time favorites, the pregnant mommy who gets more pregnant simply by walking through the store gathering clothing.

     If you aren’t shocked by now it could shake you up to know that some parents not only use their children as props or to disguise their own theft, some will steal while the children steal too. I caught two mothers and their combined five children ALL stealing in my store. The children wandered around areas of the store that interested them and the mothers did likewise. Everyone took their turn cleaning house. I once caught a father and his teenage son stealing jeans in a department store I worked in. It really gave perspective to the term, “Like father like son”… although I think the saying, “The apple doesn’t fall far from the tree” also came to mind. The unfortunate reality is, those cute, cherubic faces and tiny tots may not be just little cutie pies accompanying their mom or dad in your store. It is not uncommon for these youngsters to be covers for theft or potentially cranky crooks themselves.

     So how should retailers handle situations like these to prevent shoplifting family frolics? The number one deterrent to all shoplifters is customer service for everyone. Adults, as well as children, should be acknowledged and assistance offered. Electronic Article Surveillance systems will discourage adults from stealing. And while the systems may help prevent teenaged terrors from 5-finger discounts they will probably not have the same effect on young kids. It is probably not a good idea to try to stop a shoplifter if you do not have trained Loss Prevention Personnel working for you. Bad stops and aggressive shoplifters can lead to costly and/or dangerous situations. Aggressive, non-stop customer service is in order if you have a strong suspicion someone is stealing. Most importantly don’t let yourself be duped by those cute-chubby cheeked darlings. Those families might not be as charming as they look.