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Safeguard Your Store Against Shoplifters

They call it shrinkage: the way retail merchandise has a habit of disappearing between the time it is first ordered and the time the store conducts an inventory. While there are several factors that contribute to shrinkage, including packing mistakes and losses in transit, the two biggest

causes are shoplifting and employee theft.

It would make sense that, as the economy contracts, shrinkage would, er, expand as people who can't afford what they need turn to theft. Instead, the volume of shoplifting is closely correlated with the overall volume of retail, according to the National Retail Federation.

The association's "2011 National Retail Security Survey" found that inventory shrinkage rates increased slightly, from 1.44 percent of retail sales in 2009 to 1.58 percent in 2010. That tiny percentage does add up to big bucks. In 2010, the most recent year for which information is available, retailers lost $12.1 billion to shoplifting, which accounts for one-third of total losses. Employee theft took an additional toll of 43.7 percent.

But it's not necessarily unemployed or poor folks who have sticky fingers. A 2008 study found that 11.3 percent of the U.S. population had lifted something from a store at least once. The surprising finding was that shoplifting was significantly more common in individuals with at least some college education, among those with individual incomes over $35,000 and family incomes over $70,000. This seems to contradict the assumption that retail theft is motivated by need. Interviews for the study were conducted in 2001 and 2002, a period that followed the dot-com bust but was not as economically dire as today.

Joe LaRocca, the NRF's senior asset protection advisor, doesn't buy the lousy economy explanation, either. He points out that items stolen tend to be highly desirable: cosmetics, designer handbags, and electronics.

"You can understand when somebody steals food if they feel they have no other alternative," LaRocca says. "But it's hard to justify that someone needs a $900 handbag."

He adds that the most common reason customers or employees steal is opportunity. "They may not have come in with the intent to steal, but when they're in the back corner, item in hand, and they see there's no one watching and no cameras, they put it in the bag and walk out the door."
 
Your Stop-Loss Plan

If opportunity is the biggest knock on your inventory, excellent customer service is your first defense against shoplifting, LaRocca says. Have your staff members greet people as they come in the door and approach shoppers to make sure they can find what they're looking for.

"Let [customers] know that somebody is there, somebody cares, somebody is watching," he says.

When it comes to employee theft, good management practices and employee education create a culture of honesty, according to Steven May, CEO of LP Innovations, an outsourced loss prevention services company.

When morale is poor or workers feel unappreciated, they are more likely to steal in retaliation, or to ignore it when others do. On the other hand, when staff members understand the impact of stealing, they are more likely to support your efforts.

Beginning at employee orientation, explain to workers that part of their responsibilities includes helping to prevent theft. Point out that theft hurts them, too, because if it eats into profits, you won't be able to give them raises, bonuses, or promotions.

You should hold regular store meetings to discuss loss prevention and talk about issues that come up.

"Actively engage your sales team on critical best practices. Once you have them established, follow up with continuing education and awareness," May says.

Your employee awareness program may include posters in the break room, a newsletter, or specialized training. The idea is to get your employees to be enthusiastic partners in preventing theft.

Calling the Cops

According to the National Association for Shoplifting Prevention, shoplifters say they are caught an average of only once in every 48 times they steal. When they are nabbed, they're turned over to the police only half of the time.

Most police departments and district attorneys have a dollar threshold for reporting or responding to retail theft incidents, according to Detective David Hill of the Montgomery County Police Department in Maryland. Be sure to find out what the guidelines are in your jurisdiction, and whenever an incident meets that threshold, do report it.

"I like to encourage retailers to report it, just because it lets us know how many crimes are occurring and track it over time," Hill says.

If you catch someone in the act of shoplifting, don't confront them, Hill advises. "It's not worth it," he says. "Instead of trying to detain the person, get a good physical description, and if [they] get into a vehicle, get a description of that as well. Then let the police do their job."

Handling the High Season

If training sales associates in theft prevention procedures seems onerous enough, it may be overwhelming if you're hiring extra staff for the holiday shopping season. The higher volume of shopping could translate into a higher volume of theft if you're not careful.

First, make sure you're not putting thieves on the payroll. You may be rushing to hire temporary workers, but don't rush through the hiring process. Checking references is a must, now as well as throughout the year, according to May.

"Past employers won't tell you if they terminated someone for theft, but they will usually answer the question, 'Is he eligible for rehire?' If he's not, that by itself doesn't mean they did something bad, but it is a red flag," May says.

Neither should you omit awareness training. Temps won't have the time or inclination to immerse themselves in your employee manual, so LP Innovations recommends creating an abbreviated version. It should be easy to read and understand, and it should cover how to deter shoplifters and protect merchandise; how to report internal dishonesty; and the store's policies for safety and security practices.

Wireless Business Solution Zee Tawasha