The 3 Essentials for a First-rate Loss Prevention Program

March 11, 2015 by Leave a Comment

shoplifting6It’s never been more profitable to be a shoplifter.  In the past it was difficult to make money from stolen merchandise.  A thief commonly used a third party or “fence” to offload the product.  Fencing was a secretive, high risk job and “average” shoplifters had no way to establish a connection with one.  If they did have one he got a share of the profits, often the biggest cut.

 But, the internet has dramatically changed this process.  It allows shoplifters to function as their own fence.  They’re able to eliminate the middleman and sell directly to, usually, unsuspecting people.  Selling stolen goods is easier, safer and more profitable than ever before.  Therefore, shoplifting is on the rise and, to stay in business, stores have to be diligent when creating a loss prevention program.

There are 3 main essentials needed for a successful loss prevention program.  The 1st and most important is proper store management.  This topic is thoroughly discussed in other articles on this site.  But, while vital, good management goes only so far.  Ultimately, an effective plan also includes 2 other essentials – towers coupled with security labels and hard tags.  

Towers are the 2nd essential piece of a successful security plan.  Checkpoint System is the leading provider of towers.  Checkpoint’s towers are plastic or metal structures and are positioned on both sides of an entrance.  They sound an alarm when an active Checkpoint tag or label, which is attached to the merchandise, passes through them.  Many shoplifters will by-pass a store with towers and, instead, target one without them.

A 3rd essential is hard tags and labels – Checkpoint has many types of each.  Tags are applied to items such as clothing, shoes, and purses; they need a special tool to be removed.  Some tags are filled with ink and will open if not properly removed.  Labels are attached to things like books, DVDs, cosmetics and are deactivated at the point of sale.  When shoplifters see a label or tag, they’ll often move on to merchandise that’s not so well protected.

Making a store a difficult target can keep thieves out of it, which creates a more pleasant, safer environment for employees and shoppers.  Just as importantly, Checkpoint can be the difference between staying in business or closing the doors.  Checkpoint System, coupled with security savvy management, can go a long way towards producing a profitable store.

Nicole Abbott is a writer and psycho-therapist with over 20 years of experience in the fields of mental health and addiction.  She’s an educator, consultant, lecturer, trainer and facilitator, who has conducted over 200 workshops, trainings, presentations, college classes and seminars.

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Video Surveillance In Your Store

March 9, 2015 by Leave a Comment

shoplifting2Surveillance in your store can be a big deterrent for shoplifting and employee theft.  The knowledge that your store is protected, or at least that there are cameras capturing images of employees and customers, can help you save thousand of dollars yearly.  Employee theft is costing the retail industry millions of dollars every year and installing a type of security in your store can help you reduce the shrinkage you are experiencing.

For more about shoplifting, follow the links below.

Surveillance best cure for shoplifting

Aside from the holiday seasons where people aimlessly weave through cart-to-cart traffic down aisles in department or convenience stores, it’s difficult to predict when there will be spike in theft.

Particularly, shoplifting.

As of Friday, the Hutchinson Police Department has worked two cases of shoplifting this month. Granted, only nine unpredictably cold and not-so cold days have scooted by in March. But January and February were hot months for shoplifting with officers responding to 61 combined reported cases of shoplifting, according to Hutchinson Police bulletin archives.

There were 24 reports of shoplifting in December. Numbers from the archive bulletin suggests the shoplifting occurs at three of the most recognizable stores in the city: Wal-Mart, Dillons and various Kwik Shops.

Hastings, Target, J.C. Penney and Kohl’s are also sprinkled on the list of popularly shoplifted stores.

But why the heart-monitor like spike in thefts recently? Police Lt. Martin Robertson isn’t sure of the answer himself.

US based company allows shoplifters to avoid the police by charging them for an online course

IN THE game of Monopoly, there’s nothing better (apart from maybe winning free parking) than turning over that community chest card to see the words “get out of jail free.”

Now imagine that someone hands you that card after you’ve committed a criminal act in real life.

That is essentially what one company based in the United States is doing.

The Corrective Education Company (CEC) is a start-up, and works with businesses to offer shoplifters an alternative path to reform other than the boring old legal system.

Founded by a pair of Harvard graduates, it offers the chance for apprehended shoplifters to pay $411 ($US320) in order to avoid a phone call to the boys in blue.

That money goes towards the cost of attending an online course which is run by CEC that claims to reduce the likelihood of recidivism for the individual.

The obliging shop owners who refer the shoplifters get a cut of about $US40 per offender, and according to Slate around 20,000 offenders have so far coughed up for the program.

That works out to be $7.2 million that CEC has profited by blatantly circumventing the established judicial system.

Walgreens Shoplifting Duo Captured On Surveillance

 

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Vendor/Contractor Fraud

March 2, 2015 by Leave a Comment

theft (2)I want you to sit back and think about something for a minute. Other than your employees, how many other peopled have worked in your store last month? Drawing a blank? Think about those lights that needed replacing, or the compactor that needed repair, or even the new display cases that were installed overnight a few weeks back. While you may realize it, you more than likely have a great deal of contactors coming in and out of your store on a fairly frequent basis. These contractors and vendors have access to everything and employee has and sometimes more.

Not only do you have to consider product and equipment theft, what about data or intellectual property theft? Company sales figures, or closely guarded industry secrets? A single thumb drive and a bit of know-how can get a wealth of information into the wrong hands. Thinking about all of that, you probably want to repair your own sinks from now on…

Just as with any LP process, you have to implement a strategy that allows you to identify and react to theft, all while maintain the trust of the 99.9% of your customers that are honest. A few simple policies and best practices can protect your business from vendor/contractor theft.

First, you should establish a check in procedure. Vendors, or outside contractors should have to check in with the manager and then be taken to the area of the store that requires their services. If the area is a sensitive section of the store, or requires an exterior doors to be opened for an long period, a supervisor or key employee should remain in that area. In addition, a simple package inspection policy should be adopted and all employees, and outside vendor should be made to adhere to that policy. Basically, anyone exiting the store that works for you would have any bag, or box inspected by a store manager prior to them leaving the store.

An electronics policy should also be adopted around sensitive areas of the store. Vendors, as well as employees should be barred from using an external hard drive on any store computer system. Recording devices (cellphones) should not be allowed in sales offices, or anywhere that sensitive data is stored. You should also restrict any store Wi-Fi to store management only, and for the sole purpose of conducting company business.

While it may not be an area that you closely associate with shrink and loss, vendor compliance and control can become a major contributor to lost profits in your store. By implementing a few simple steps and practices, you can sure that you are doing all you can to prevent unnecessary loses to your store and company.

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Shoplifting Programs and News

February 4, 2015 by Leave a Comment

shoplifting5If you own a retail store or are managing one, shoplifting is a crime you have to deal with in a daily basis. Shoplifting and employee theft are two of the most damaging crimes for a retail store’s bottom line. If your store has policies regarding shoplifting and employee theft, such policies should be visible; they may serve as a deterrent to shoplifters entering your store, or employees thinking they can get away with stealing merchandise. For more news about shoplifting follow the links below.

Dover calls new shoplifting mugshot program a success

A controversial approach to reducing shoplifting by posting suspects’ arrest photos has been declared a success in Dover, despite complaints about violations of civil rights.

The four-month pilot project called the “Shoplifter Notification Program,” which started in August, produced a 19 percent drop in such crimes, city police said.

“That was huge,” said Cpl. Mark Hoffman, Dover Police Department’s public information officer, who suggested the project after seeing similar efforts on other forces’ webpages.

The drop in shoplifting was especially significant, he said, because the project period included the end-of-year holidays.

“That’s our busiest time of year for shoplifting,” Hoffman said, adding stores also are their busiest and youngsters with school vacations and time on their hands tend to raise the rate of merchandise thefts.

Davenport denies lawsuit claims of police brutality in shoplifting incident

The city of Davenport denies allegations of police brutality in its response to a lawsuit filed by a woman videotaped being hit by an officer after she was accused of shoplifting at Von Maur.

Brandie Redell, 36, of Davenport, filed the civil rights lawsuit in Davenport federal court last July, alleging she was beaten so severely she was hospitalized with a concussion and suffered vision loss.

The suit, filed against the city and Davenport police officers Scott Crow and Vincent Jacobsen, claims the police department makes a habit of “using excessive force against police suspects” and fails to properly discipline offending officers.

In a response filed last week, the city said the officers were justified in their use of force.

Man busted for shoplifting on motorized shopping-cart

SOUTH EUCLID, OH –It’s a miracle! A man on a motorized shopping-cart managed to stand up and run away when security guards tried to stop him from shoplifting at an Ohio Walmart.

An off-duty officer working security at the Walmart in South Euclid, Ohio noticed the man enter the store riding on the cart which is usually reserved for customers who need assistance walking.

A short time later, the man rolled out of the front entrance and set off the alarm. The officer began asking the man if he had any unpaid merchandise.

That’s when the man jumped out of the cart and high-tailed it out into the parking lot.

“We are so lucky to be police officers because every now and then we get the opportunity to

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What’s Trending in the World of Shoplifting?

January 8, 2015 by Leave a Comment

shoplifting1Wouldn’t it be nice if the criminal world was as easy as Twitter? You could just go online and look at what’s trending and then take proactive steps to stem any potential losses. That would be great! Unfortunately, criminals, especially thieves rarely broadcast their intentions. It’s up to the loss prevention community and local law enforcement to share these trends amongst each other in order to combat shoplifting.

You may or may not be aware, but shoplifting is much more than just putting one item in your purse, or pockets. I routinely see individuals and groups operating some very sophisticated fraud schemes in order to remove product from the store. One of those trends that have become more and more prevalent over the past year has involved refund fraud. I had a very complex case that spanned several months that was more sophisticated than anything I had every come across in all my years conducting Loss Prevention Investigations.

The basic storyline is that a brick and mortar store front was employing individuals to target stores for small, high dollar merchandise. Once the product was stolen from one store, it would then be brought to a second store where a refund was given for the product in the form of store credit. That individual would then utilize that credit in order to purchase a high end electronic item. The item, along with the receipt was sold to the store front. This is where it takes a more complex turn.

The store owners would then arrive back at the store with the receipt and electronic item and ask to exchange it for other product. This was routinely conducted with footwear or apparel items. The store owners would conduct the exchange and, on most occasions, pay a difference in cash of anywhere between $10 and $20.

Over several days, the store owners would return to my store and refund each item that was purchased during that exchange transaction. Since the receipt showed they paid a cash balance, inattentive store personnel would always give them a full cash refund. Did I lose you?

Essentially, I was at a loss 5 times for the same product. First it was stolen. Second, I gave them a store credit for stolen goods. Third, the store credit was then spent. Fourth, the product the credit was spent on was exchanged for additional merchandise. Fifth, we gave them cash. It was incredible once it was all uncovered. This group has figured out a way to essentially launder stolen goods and with a few steps and some patience, get cash. All while keeping the appearance of a legitimate transaction. All told, our stores lost well over $100k to this scam.

It was an expensive lesson to learn, but it goes to show just how creative people can be when it comes to fraud. While this was the first time I had ever seen something of this complexity, I can assure you that in the next year, someone will come up with an even more complex method to defraud retailers.

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Prevent Shoplifting This Year

January 7, 2015 by Leave a Comment

shoplifting3The shoplifting figures in the United States are nothing to laugh about. Billions of dollars are lost to shoplifters every year and the detrimental effect they have on business is serious. Loss prevention personnel are at risk every time they stop a shoplifter, and the solution to this problem has evaded the retail industry with costly consequences. Retailers spend millions of dollars in loss prevention systems, and studies show that these businesses benefit from the investment. The shoplifting is still there, but retailers are able to maintain and keep track of the inventory more easily. For more news about shoplifting, follow the links below.

Shoplifters Costing Businesses Billions

GREENSBORO, N.C. — Shoplifting is a crime police say affects all types of businesses, and it’s costing a fortune.

WFMY News 2 went to several Triad businesses Friday. Owners at those businesses said shoplifters are crippling their day-to-day operations.

One Greensboro store manager said shoplifters cost his business anywhere from $10,000 to $15,000 each year.

“If somebody really wants to steal something, they’re going to steal it,” he said, “Ain’t nothing you can do about it.”

He’s frustrated, and he’s not alone.

Nationwide, shoplifters steal about $13 billion in merchandise every year, according to the National Association of Shoplifting Prevention. The same organization reports one in 11, or 27 million people in the U.S., are regular shoplifters.

KCSO shoplifting task force makes record number of arrests

KNOXVILLE — A Knox County Sheriff’s Office holiday shoplifting task force made a record number of arrests for 2014.

KCSO’s Safe Holiday Task Force made 372 arrests between Nov. 24 and Dec. 29, according to the Sheriff’s Office. The team was credited with 342 arrests during the same time period in 2013.

While the majority of the 2014 arrests were for shoplifting, they also included 35 felony theft charges, 12 DUI arrests and two fugitive captures.

The annual operation also recovered a record amount of stolen merchandise, totaling $65,614 worth of goods, and located two stolen vehicles. About $50,000 worth of stolen items were recovered in 2013.

Drug habit fuels shoplifting ring in Richmond and around Macomb County

A shoplifting ring has targeted Richmond stores for more than two years, according to a detective with the Richmond Police Department. Thieves steal easily marketable goods to fuel drug addictions, particularly heroin addiction, the detective said.

“What we have seen — and what our counterparts in Chesterfield and at the Macomb County Sheriff’s Department have seen — is a loose ring of individuals shoplifting certain high-priced items like Enfamil baby formula, Red Bull and Crest White Strips, and then either taking these directly to the drug house and trading them for drugs or selling them back-door to another store for cash to buy drugs,” said Det. Julia Frantz.

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The 80/20 Rule

January 5, 2015 by Leave a Comment

shoplifting2The 80/ 20 rule for retail is actually a series of rules, or guidelines to how and where your inventory shrink comes from. Once you drill down to see what is actually driving your shrink, you have the ability to implement much more efficient anti theft and anti shrink strategies.

The first part of evaluating the 80/ 20 rule is to determine a generalization of how your store is incurring losses. There are three main areas of shrink loss that all shrink can be categorized as. They are Internal, External and Operational shrink. As a rule of thumb, internal shrink is explained as asset losses intentionally carried out by an employee of the store. Employees who are stealing merchandise drive internal shrink.

Operational shrink, on the other hand, is merchandise losses carried out by an employee unintentionally. These are the store’s operational errors that end up causing losses. Did an employee accidentally miss an item when they checked a customer out? Did an employee pull some glass cleaner from the shelf to clean their workstation, but not record it on a store use log? Did an employee break an item of merchandise beyond repair and threw it in the trash without letting anyone know?

These are all everyday examples of how an employee can unintentionally cause losses. These are not theft related actions that we would arrest and prosecute and employee for, but the end result is still the same. We are now showing missing merchandise and our bottom line has suffered from the shrink loss. Unidentified items missing from freight shipments also fall into this category.

External shrink losses are created by anyone outside of the company. These are non-employees who steal our products- the shoplifters. The average shoplifter steals much less per incident than an employee does. Even if you have a higher frequency of shoplifters in your store, employee theft will still outweigh the losses caused by shoplifters over time.

While it is really up to you to determine the actual breakdown in your store, most retailers average about 40% of their losses from internal theft, 40% from operational errors, leaving only 20% to external theft. Obviously these numbers can change based upon your location, kinds of goods sold, and staffing sizes. Overall, these numbers equate to about 80% of your shrink is derived in house (by your employees), and 20% comes form external sources.

Next you want to drill down even further into your losses by looking at departments, and the individual items that are being stolen. Ideally you want to have an inventory system that allows you SKU level accuracy. By drilling down to the actual item number that is shrinking out, you can create an action plan suited specifically to that item. At the very least, you should know which departments and product assortments are the highest losses.

Once you determine your highest shrink items, you should know the quantity and/ or dollar amount lost. You can then put your efforts into where the biggest losses are. You might be loosing 100 packs of gum that cost $1.00 each, or you could loose one handbag worth $200. Frequency versus actual dollar amount lost might dictate a closer eye on your handbags, than the multiple losses in packs of gum.

By taking a look at the highest dollar losses, you should see that about 80% of your total shrink losses are coming from only about the top 20% of your shrink items. This drill down approach further streamlines your anti shrink strategies. Now, instead of focusing on every little loss that occurs in your store, you can focus on only the top items. By creating feasible reduction strategies on only those items, you can create a significant reduction in your store’s overall shrink losses.

 

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Building Partnerships

January 5, 2015 by Leave a Comment

law-3Every store should have a way to build reliable partnerships with local law enforcement. For some jurisdictions, that could mean the sheriff’s department, city or county police. In some rural areas, that might even mean the state police department. There are many was to build these partnerships, and your store’s safety and security will benefit greatly from those partnerships.

What you are looking for is to have periodic visits from these law enforcement officers. Ever wonder why you see police at a donut shop? For one, the shop owners frequently give free or reduced prices on coffee to these officers. It is a nice gesture to these officers, but also an incentive to get them to frequent the shop. The more often police are in the shop chatting, drinking coffee etc, the less likely the shop is to be robbed.

Coffee and donut shops are often open late, and have only one or two people working. This makes them prime targets for robberies. Having an increased police presence helps to reduce the risk. If something were to happen, the police would quickly respond not just because that is their job, but also because they are probably on a first name basis with that shop owner and its employees. For these businesses, a cup of free coffee is a small price to pay for that kind of security and peace of mind.

Depending on the kind of store you have, giving product out for free or at a discount may not be feasible. That doesn’t mean you can’t make it worth it for local law enforcement to stop by periodically. Even though most departments shy away from case quotas, officers who do produce cases are given raises and promotions over those who don’t. By building partnerships with officers you can get some extra help with your suspected shoplifters, reduce losses, and help out your local community by giving local law enforcement tips on suspected criminal activity in your store.

Most law enforcement agencies have a community resource officer. They would be one of the first points contact to start building a relationship with. Asking if they would be willing to do a safety or security presentation for an employee meeting is a good way to break the ice. It is the first step in letting the local police know they are welcome in your store.

One of the next ways is to see if there is a retail anti theft task force set up. If so, ask if they would be interested in putting your store on their list. These task forces go into local businesses, in particular around busy holiday shopping seasons, and look for shoplifters, credit fraud, and other criminal scams. The task force will send officers into stores, generally in plainclothes, to watch cameras or do floor surveillance to spot any criminal activity.

These task forces are a free service to their retail community. While these officers are in your store, you can talk to them about what kinds of thefts you are experiencing. It also gives you an opportunity to connect with the officers and get to know who they are. These officers can become invaluable resources even after the task force is done for the season.

You now have specific officers that you can call if you have a shoplifter in your custody, or experienced a high dollar theft. The officers might be more willing to do some investigative legwork on your case, if you have built a partnership with them. Of course, part of the partnership is showing restraint and professionalism to these officers.

It is not suggested that you call them for every low dollar shortage that walk out your door, or for people who “seem suspicious” but you have no corroborating evidence. There are still laws that must be upheld regarding liable and slander. If you consistently show poor decisions about which cases to call on, you will tarnish your reputation negating any usefulness of your partnership. Remember, there is a difference between offering viable leads to confirmed inventory losses, and crying wolf over every gut feeling you have.

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Shoplifting And The Law

December 2, 2014 by Leave a Comment

law-3Shoplifting has become a “silent crime” people want to ignore, and regardless of the time of year or the amount stolen, shoplifting is a serious crime that many states are finding hard to ignore. States across the United States are changing the law to prosecute shoplifters, and the charges can run from an “infraction,” or a misdemeanor, to felony charges. Shoplifting is a serious crime that we all need to take seriously. Read more news about this by following the links below.

Sales lure shoppers — and shoplifters

As shoppers finalize plans for a big weekend of holiday gift buying, retailers and law enforcement officers are making preparations to ensure merchandise is paid for before it leaves stores.

“It’s the Super Bowl of our year,” said John Leatherman, loss prevention leader at Scheels in West Des Moines’ Jordan Creek Town Center. “We’ll have a lot of people in here, and that makes our job that much more difficult.”

Retailers throughout Iowa and the nation have hired additional off-duty law enforcement officers to help patrol stores and parking lots during the annual Black Friday shopping bonanza, which attracts crowds of shoppers and shoplifters annually. In addition, police and sheriff’s departments have either staffed more officers or rearranged patrol routes Thursday through Sunday to keep tabs on potential traffic tie-ups, shoplifters and vehicle break-ins.
Individual stores such as Scheels beef up staffing in their loss prevention departments.
“Just because it’s a big shopping day doesn’t mean we won’t have shoplifters,” said Leatherman, whose team watches shoppers on a bank of monitors that are fed from

Retailers, cops prepare for holiday ‘shoplifting season’

Once the Thanksgiving turkey is wrapped in cellophane and days of leftovers lie ahead, stores prepare to be inundated with shoppers, as the Christmas shopping season begins.

As the number of shoppers goes up during the holiday season, the number of shoplifting cases increases as well.

In response, store security personnel prepare to be extra vigilant and police officers are prepared for an increase in shoplifting related calls.

“There is just that many more shoppers in the store,” said Layton Police Lt. Travis Lyman.

People feel pressure that time of year, Lyman said, and their dollars are spread a little more.

Each year, retailers lose millions of dollars in theft.

Utah has been hit by organized retail theft rings, which move from state to state, but for the most part, theft during the holiday season is a matter of volume.

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Conducting A Security Self Audit

December 1, 2014 by Leave a Comment

shoplifting4Part of your internal auditing process should be a section devoted specifically to your store’s safety and security measures. Some points should be audited on a daily basis, while others can be less frequently, such as once a month. When you monitor your store’s security measures consistently, you are able to respond more quickly to any malfunctions or procedural breakdowns.

One of the easiest security features to audit on a daily basis is your EAS and security tags. These are the anti theft devices put onto your merchandise that provide a visual deterrent to potential shoplifters. Ensuring 100% compliance is not only a stronger deterrent, but also reinforces the concept of operational accuracy and a check and balance system internally. Employees who are held accountable to stringent operational standards are less likely to look for opportunities to steal from their employer.

A daily audit of EAS tags consists of a department rotation and a spot check of those items. There is no need to check every single item, unless there is a pattern of under performance in those areas. The best way to do the daily audit is to only audit 20 or so items on a given day. From there, it is easy to determine the percentage of accuracy. If out of 20 items only ten have the appropriate tagging, you have 50% compliance. You can do more or less based upon your actual needs, but a similar process will be the most time efficient, with the most accurate results.

Along the same lines is auditing the EAS alarms at your doors. These alarm activations should be reviewed by CCTV whenever possible. You need to understand why you are having alarm activations, and how your employees are responding to them. You can bet that the shoplifters coming into your store are watching for this, so don’t give them the advantage by being oblivious to what is going on in your stores.

If an EAS alarm is activated, your employees should respond to the person going out the door and offer their assistance to deactivate any tags that were missed during checkout. You should look to see if you have a specific employee who is not deactivating tags properly, causing unnecessary alarms. You should also review to see if you have the same person setting off alarms, they might be a shoplifter to watch out for. These audits can be done weekly rather than daily and still prove effective.

One area in particular to audit at 100% is alarm activations before and after your store closes. While most of the alarms are likely to be dismissed by stock/ freight movement to replenish selling shelves, you want to watch out for that one that is not. The alarm activation you are looking for is caused by an employee stealing. It is not unheard of for an employee who is stealing from their store to try and take the merchandise out after hours. Fewer people are around to notice, and the employee can take more merchandise out at a time, without arousing suspicion. If no one goes back to review these after hours alarms, the employee can go undetected for months or sometimes even years.

Any reputable alarm company, such as Checkpoint, will give you a daily and weekly listing of alarm activations. The report should include the time and the date, allowing you to cross reference with your CCTV recordings. By looking at the times, you can quickly determine which alarms are after hours. After hours alarms should be conducted as soon as the report is received. If an employee actually is stealing, it needs to be swiftly investigated and dealt with to prevent further financial losses.

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