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.

Quit Stalling About Employee Theft

Every day I see news articles about employee theft. That does not even cover a fraction of the employee theft occurring both know or unknown. The fact is that approximately 45% of a Retailer’s losses are due to employees stealing. We focus so heavily on shoplifting that many times a Retailer misses the boat completely. Do not misinterpret what I am saying, shoplifting is responsible for about 35 percent of a Retailer’s losses. Which is also huge.

However, employees have access to your cash, supplies, and merchandise. Employees are generally trusted until they show us that they are not. Which may be too late! Many Retailers I have discussed this with over the years tell me that they trust their employees and treat them well. Therefore they would not steal from them. Those are the folks that have the worst losses and the biggest shock when it does happen. As human beings, we do not want to believe that someone would steal from us. We also are quick to turn a blind eye to the evidence even when it hits us in the head. We simply do not want to believe it.  

Another factor is that many Retailers do not know, understand and are afraid to do something. Will we make a mistake? Would we accuse someone of something they did not do? What civil and criminal consequences do we face? And the list goes on. This is yet another stalling factor for not doing anything. 

Quit stalling about employee theft. You face every other retail problem head on why not this. Educate yourself. We can help you with this. Make sure you know the signals of employee theft. Yes, employees who steal, act differently than other employees. You simply need to know what to listen and watch for. Do you “audit” your operation? For example, an audit can be as simple as making sure the Point-Of-Sale balances every day and if it does not, find out why. I have seen many Owners and Managers that say if the drawer is short $5 or less, they do not look into it because “it is not worth my time”, REALLY??? THAT IS SO WRONG and dangerous!!!! First by having a policy like this you are telling everyone that stealing $4.99 and below is okay. $4.99 times 365 days a year is a loss of $1,821.35. Oh, and that kind of theft WILL lead to larger and more frequent employee theft. 

Over my career, I have investigated, interrogated and put in jail somewhere north of 2300 employees for theft. The vast majority of those employees that were stealing did it for the same reasons. Many still stole even those the boss was “good to them”. I have seen employees that had been loaned large amounts of money by their employer, employees that were being put through school by their employer steal with no regret except for being caught. 

We can train you to spot employee theft and what to do about it when you suspect and find it. It is not hard to do. We can show you how to “test” employees to see if they are stealing. We can help you build the confidence to be on the offense, not the defense.  Your good employees will not care or suffer. In fact, they will help you. You just need to know how to proceed. 

Would you knowingly buy a car that had major engine and transmission problems? Probably not. So why would you hire someone with a criminal record? Why would you not find out that they have problems with violence, theft, drugs and worse when it is so simple, fast and cost-effective to do so? We can help you with that also. We conduct pre-employment screening, drug testing and more, nationwide. Look at it this way, you interview, select, employ, train, invest in an employee just to find out the hard way that they are very familiar with employee theft? When a pre-employment screening costs $20 how can you afford not to. Drug testing is also very inexpensive. You can quickly, cheaply and easily have a pre-employment drug testing done on all of your employment candidates when you offer them the position. Again, we conduct pre-employment screening and drug testing nationwide. 

You control every other aspect of your business, why would you not take more control of employee theft? Contact us today or call toll free 1-866-914-2567. 

What can a Loss Prevention System do for you?

Loss prevention technology along with the proper personnel training will allow a retail store to reduce loss, improve customer service and provide the data necessary to access up to minute inventory information in the store.

A loss prevention system is a preventable measure retail stores need to adopt to prevent the losses that plague the retail industry. A loss prevention system along with trained personnel can be a deterrent to shoplifting, vendor and employee theft that can save the retail store thousands of dollars a month.

A loss prevention system can protect the merchandise in the store while protecting customers and the employees as well. Incidents, where violence and sometimes deaths occur, can be avoided with the proper systems, training, and the continuous effort to ensure the safety of the employees and customers alike.

A loss prevention system can allow the employees and manager of a store to focus and ensure customers have a good experience shopping at their store. Good customer experience can translate to continuous business, and great customer satisfaction has been linked to less shoplifting in the retail industry.

If you are the owner of several retail stores, a loss prevention system can be adapted to each store’s unique layout and needs while providing the same information you need to prevent shoplifting or to take the necessary measures to prevent it.

A loss prevention system is an investment a retail store cannot do without, but along with an investment in a loss prevention system, trained personnel plays an important role in making sure the system can do what it is supposed to do. Data from the loss prevention system cannot go unchecked, and it cannot be ignored.

Employees have to be trained and knowledgeable of the stores’ policies and procedures regarding shoplifting to ensure an efficient and quick response if shoplifting occurs in the store. Violence can and must be avoided at all costs.

There’s research out there that clearly indicates the cost versus benefits of having a loss prevention system in place.  Profits in a business can be slim, losing them to shoplifting, employee or vendor theft can be detrimental to any business.

An Investment For Your Business

When new legislation passes in many states, the array of issues that come to new elected officials varies considerably.  

Shoplifting laws are one of the many topics legislators review to make sure the punishment is appropriate.  Businesses and small businesses in general need to be protected by the laws of the country to ensure the economic growth of a locality, the state and ultimately the country.

The punishment for shoplifting varies according to the state and in some instances the county where the business is located.  Laws are put in place to make sure these silent crimes are not committed with impunity, and the shoplifter is prosecuted according to the law. 

Unfortunately, many of these shoplifting incidents are not prosecuted for  many different reasons. Ultimately, it is up to the business to decide whether to prosecute the shoplifter or not.  As a business owner, they have to consider the costs associated with prosecuting shoplifters as a rule and whether it is economically sound to do so.

A lawyer’s fee for an hour or to prosecute a case depends on the region, the experience and the complexity of a case but, either way, their fee does not come cheap. 

 As a business owner, is it practical or economically possible for you to have a privately retained attorney? Is it your business practice to prosecute a shoplifter regardless of the quantity they steal?  There are many questions one needs to answer, and many options you have to make as a business owner regarding shoplifting.

Shoplifting in the United States have become a multi billion nightmare for businesses in the retail industry.  From the casual shoplifter to organized retail rings, the losses the retail industry suffers are staggering.  The small stores or shops in this industry have to fight and stop loses because their livelihood depends on their ability to stop the shoplifters. The profit margin from sales is too small for them to ignore the problem or to neglected it for too long.

For many of the small retail businesses, a loss prevention system that allows them to protect their merchandise and profits is one of the best ways to invest in their business.  Big retail chains have for many years now invested in loss prevention systems to help them minimize the losses and help them prevent shoplifting and employee theft. 

A loss prevention system that gives the employer or management of the store up to the minute information about the merchandise , allows them to do their job more efficiently and helps them prevent theft is an investment that will pay off sooner than you think.

Benefits of a Loss Prevention System

Most retailers in the United States end their fiscal year on December 31st. and begin the New year with a new budget, new goals, and new strategies to implement in their business.  

For the loss prevention team or management of the store, allocating sufficient funds to the prevention of shoplifting and security of their store begins anew.  If a store has not purchase a loss prevention system and the losses of the store are too many to ignore, the new year allows them to budget and purchase a system that will help them minimize their losses and prevent them from happening in the future.

Research has shown the budget for the prevention of shoplifting and loss prevention teams have been declining over the years with no plans to change it, while the problems associated with shoplifting, employee theft, internal clerical issues and lost merchandise continue to grow.  Every retail store has different problems associated with them, but shoplifting is a problem that is common for every one of them. 

Allocating enough funds to the prevention of theft in your store is vital. According to research purchasing a loss prevention system to help you minimize the losses in your store will return your investment within months. Reduction in merchandise losses, increase productivity, personnel reduction, and an increase in sales are some of the benefits associated with the purchase of a loss prevention system that will see more profits going to you.

Finding out what kind of loss prevention system your store requires will need the help of a seller that understands systems, training and prices. 

An EAS system can give the store an up to the minute understanding of what merchandise is in the store, what items have been sold, and what merchandise is missing. These systems can let you know up to the minute information about your store without having to do a physical count every time you need to know something about a specific item.  With an EAS or a point-of-sale (POS) system, information about the merchandise in your store is within your grasp within minutes.

Investing in technology that can help your management and loss prevention teams work effectively while minimizing cost will help your store succeed.  These systems not only offer help in deterring shoplifting but help you meet the needs of customers and their shopping habits.

Preventing shoplifting in your store with a loss prevention system is key to your success.

Proper EAS Tagging Tips For Retailers

There’s no question about it electronic article surveillance (EAS) retail anti-theft devices work in every store they are used in. In fact they are so effective that according to the Sensormatic Global Retail Shrink Index, EAS is the most popular Loss Prevention and Asset Protection investment among retailers in the United States. 92.16% of retailers surveyed indicated they are investing in electronic article surveillance (pg. 45). Is it enough that EAS tags are used or is there more to making them an effective tool? 

     In order to get the most out of an electronic article surveillance system tags retailers should ensure they have effective tagging guidelines in place. It may not seem like it would make a big difference at first glance but the reality is a proper tagging program can make a theft prevention program stronger. Here is are some suggestions to consider as a guideline of where you should tag your merchandise: 

  • Keep visibility in mind. While hiding tags may seem like a good idea at first it can cause some problems for the retailer rather than a thief. Hidden hard tags may not be seen by a cashier and removed when a piece of clothing is purchased. That can cause an unnecessary EAS tower alarm and an embarrassing moment for your patron. A similar problem can occur with an EAS label if it is hidden. It may not deactivate properly at the point of sale and cause a false alarm. 
  • Location of tags is important to prevent concealment by a shoplifter. If a pair of pants is protected with a hard tag on the waistline it is not difficult to untuck a shirt and hide it. Keeping the placement where the tags are hard to cover improves the deterrent effect of the devices. 
  • Another thing to avoid is placing soft tags or labels on manufacturer hang tags if possible. I encourage retailers to place labels directly on merchandise packaging. For example a Sensormatic label is difficult to remove from a box of razor blades but if it is on a hang tag on a shirt sleeve a crook can pop the hang tag off and the label goes with it.  

So what do I suggest when it comes to tag placement? Here a few suggestions that I have found to be effective: 

  • When tagging pant or slacks a hard tag can be pinned through a seam near the knee. If that is a bit more work than you want to do, the next best solution would be a couple of inches above the cuff. Both solutions make it difficult to hide the tag and if the location is consistent on every pair of pants cahiers will be accustomed to looking for hard tags in the same place every time. 
  • If your store sells shoes people are going to want to try them on. I suggest tagging them through an eyelet. If there is no place to that a hard tag can be attached the next best solution would be a label on the bottom of the shoe. Tag both shoes as an extra precaution against shoplifting. 
  • Shirts should be tagged near the front of the neckline. The next best option would be the cuff of the shirt sleeve. The point is to keep the tags in as visible a location as possible. The problem with a cuff versus a neckline is that a cuff can be upturned and a tag hidden. Also when a tag is placed too close to the end of a cuff it is easier to make a small cut in the garment to remove a tag and repair it with a stitch or two. 
  •  Purses can be protected with a hard tag. If you are tagging purses the key to doing so efficiently and reducing customer distractions is to tag them as closely as possible to one place for all bags. Wallets may have an EAS label hidden inside because they are more difficult to tag with a hard tag. If this is the case for your store make sure cashiers are all aware of this and carefully placing the merchandise on the deactivation pads at checkout. 

These are the most common items of clothing and softlines merchandise to be protected. Hopefully the message you are reading is that the consistency of a tagging program is what matters. Do it properly and you will have minimal false alarms and customer distractions and the alarms that do go off will be real attempts to steal. When supervisors and employees respond to real alarms and fewer false alarms they will be more thorough in their receipt checks. That will result in more recovered dollars and less shortage for you. 

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? 

A Loss Prevention System To Start The New Year

Shrink in the retail industry is a  loss that many retailers seem unable to fight.  The budget to invest in security in the retail industry has declined over the years with no plans to restore it now or in the foreseeable future. Many of the small retailers believe that installing a loss prevention system will be too expensive for them to afford even though  they seem unable to stop the shoplifting that is causing their store major losses.

Loss prevention systems that allow these retailers to deter the shoplifting from happening in their stores are an investment they seem to ignore or to believe they are too expensive for them to even consider. The benefits associated with installing a loss prevention system in a retail store are numerous, and research has  shown the investment of purchasing such system can be recouped within a year.

Many retail stores do a physical inventory regularly that allows them to gauge the state of their store. Depending on the size of their business, this physical inventory should be done at the end of the month or quarter, and definitely one at the end of the year. For many retail stores, if an inventory is done after the holidays, it can offer a very shocking reality.  

The shoplifting, employee theft, vendor and clerical errors are seen clearly and painfully, and cannot offer an explanation or a solution to the tremendous losses in the store. A physical inventory is also a very expensive way to account for the merchandise in the store. The many hours and personnel required to do this kind of inventory are financially draining for many businesses and their bottom line.

If after the holidays your business has decided to purchase and install a loss prevention system that will allow you to deter the shoplifting and  employee theft in your store, there are a few key features such system should have to help you be successful.

  1. A software platform that allows the retail business a concise and up to the minute inventory analysis to make the necessary adjustments for their business.  
  2. EAS  solutions that are tied to an RF surveillance system that enables the loss prevention team to make decisions accurately and in a timely manner every day all year long
  3. A loss prevention system that will offer training to your employees and help you navigate solutions to your specific problems.

There are many loss prevention systems sellers that will help you find the financing available, give you the training, and the customer care you need to make the installation of the system a success.

Having doubts about buying and installing a loss prevention system in place is understandable and expected.  But, letting shoplifting, employee theft and other external factors influence the earnings you work hard to earn is not a sustainable solution. Contact us and talk to us, we will be happy to work with you.

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!