Retailers must stay vigilant about an old risk

Security experts offer advice on how to reduce the risk of shoplifting.

Picture this: Someone runs into your store, grabs an armful of merchandise, and exits through the front door into a waiting van. The vehicle speeds off before you have a chance to see the license plate.

That scenario can happen any time. It’s just one of the many tricks shoplifters pull to separate retailers from their merchandise.

At risk

No one knows the exact loss figures for shoplifting, but retailers participating in the University of Florida’s annual “National Retail Security Survey” estimate the crime accounts for at least a third of the $44 billion dollars in annual reported shrinkage. The 2012 survey, the latest available, estimates that another third is due to employee theft, with the remainder coming from dishonest vendors and inventory and book keeping errors. The same survey reports that average retail shrinkage comes to 1.47 percent of annual sales.

While retailers of all sizes stand to lose profits from shoplifters, smaller operators are especially at risk. “One or two clerks in a small store can be easily distracted by a shoplifter,” says Dr. Richard C. Hollinger, designer of the University of Florida survey and Chair of that institution’s Department of Sociology and Criminology & Law. “Often the result is that the retailer gets cleaned out and has to start over—or even close.”

Who shoplifts?

Say “shoplifter” and many of us conjure up the image of a furtive thief seeking a cheap thrill or a quick buck. While such amateur thieves can cause real damage, the fact is that professional shoplifters—those who do it for a living—are becoming a much more dangerous component of the security picture.

“Today the major problem is the organized retail theft gang,” explains Hollinger. “Shoplifters go around the country in teams, taking products they know they can fence, sell to other retailers, bring back to the store for refunds, or sell on the Internet. They often take everything in a department. They are bold and well-schooled.”

Professional shoplifters, of course, are nothing new. What’s changed is their prevalence and sophistication. “The profitability of shoplifting has dramatically increased,” says Hollinger. “Professional gangs can fence merchandise at much higher prices.” The reason? The Internet. “Instead of 10 cents on the dollar at a flea market, thieves can get maybe 50 to 70 cents online.”

Professional activity has also been given a boost by the continuing soft economy. This has brought about a change in attitude, with many shoplifters justifying their activities by an appeal to income disparity and the belief that large retailers will not miss the merchandise.

The availability of higher profits and an easier Internet sales channel has led criminals to engage in much more sophisticated planning and coordination when they do target a store. Technology, in this case, has not been the retailer’s friend. Shoplifters will use their cell phones to stay in contact with one another by voice or text as they move through the store, planning diversions to distract personnel and exchanging information on surveillance activity.

Such technology helps get the job done fast. “They are in and out in a few minutes--maybe less,” says Hollinger. “By the time retailers figure out what’s happening the thieves are headed to their vans.”

How to spot them

So how do you spot a shoplifter? Surface characteristics are of little use. “Shoplifters look like everybody-- like you and me,” says Curtis Baillie, principal of Security Consulting Strategies, West Chester, Pennsylvania (retailsecurityonsultant.com). “You can’t just tell by looking at someone. But they do give out some common behavioral signals. You can pretty much size up a person as to whether they want to buy or steal your merchandise.”

So what are some common behavioral signs? “I always say watch for people who are carrying bags into your store,” says Baillie. “Especially if the bags are from a store not in your area. Quite often shoplifters bring their own bags from home, and they will often have a couple of items in them.”

Baillie offers more advice:  “Watch for shoppers who refuse assistance from store personnel, or who appear nervous or startled when you approach them. Also be on the alert for someone who is constantly looking around, and not really paying attention to the displays. They may be watching your actions more than anything else.”

And more: “Watch for people who pick up merchandise at random and carry it around with them,” says Baillie. “Often these people do not pause to look at size and color, and they end up moving an item from one department to another. They may be planning to come back later and pick up the item when they think no one is watching.”

Certain personal items can also be a tip off. “Watch for shoppers who are carrying an umbrella when there is no expectation of rain,” says Baillie. “Even a drinking cup with a lid can be used to conceal small expensive merchandise.”

Such behaviors, while useful as triggers for further observation, do not in themselves constitute surefire signs of thievery, cautions Baillie. The shopper who refuses assistance may just want to consider a purchase without interruption. The person who is startled by a clerk’s approach may have just been deeply concentrating on a piece of merchandise. The individual who carries an item from one department and drops it in another might have simply changed shopping priorities.

Stem the tide

Spotting shoplifters is one thing. Stopping their activity is another. Just what are the best ways to do so?

“The best shoplifting prevention method hasn’t changed over the years,” says Chris E. McGoey, president of McGoey Security Consulting, Los Angeles (crimedoctor.com). “Provide good customer service. Greet people as they come into the store and look them in the eye. Offer to help when person is wandering aimlessly. Those tactics work very well.”

The reason? “Shoplifters want privacy,” says McGoey. “They do not want to be observed and do not want overly friendly or helpful sales people.”

On the surface, quality customer service might not seem to promise much headway against professional shoplifters. But the fact is that professionals who are approached by store personnel might well decide to bypass your store for easier pickings. This goes double if you encounter an advance man: An individual who comes in to scout your store before the arrival of his compatriots. Confronted with a friendly sales person, this individual may well decide to tell his gang to go elsewhere. The chances of this happening are even greater if the presence of video monitors suggests that cameras are capturing everyone’s faces.

You can reduce shoplifting in other ways, says McGoey. One is to pay attention to your displays. Cases, for example, should be properly secured. And engineer your displays so a clerk at the front of the store can see down the aisles: Shoplifters hate to be observed.  “In a small store, you can face all of your merchandise so you know when you are missing stuff,” says McGoey. “Maybe you see a hole in a shelf display and you realize you did not sell what is missing.” That can tip you off as to what departments need extra attention.

Another tip: Avoid positioning high ticket merchandise near the front door, encouraging this article’s opening scenario—called a “grab and run”—when a thief picks up an armful of merchandise and runs out into a waiting car.

Give potential shoplifters some evidence that you take security seriously. Signs stating that the floor is under security surveillance can deter criminality. So can cameras and other security equipment. “Mount a video monitor where people enter your store,” suggests McGoey. “People can see themselves on the screen and they don’t like it because they want to remain anonymous.”

Watch for one form of shoplifting, called “sweet hearting,” when an outsider works in tandem with a checkout employee. Merchandise is subjected to a fake “scan” and the thief goes out the store without paying anything. This crime can be reduced through the use of security cameras and software that notifies the manager when a fake scan occurs.

Make an effort to staff your store well, because the presence of employees is a deterrent. Pay special attention to the hour just after opening and before closing, when it’s tempting to schedule a skeletal staff. “These are prime times when shoplifters know there may not be adequate coverage,” says Baillie. “Often complete departments are left open.” Make sure someone is monitoring quiet areas of the store during those hours.

Alive and well

In some ways the retail world has become easier for shoplifters. Retailers have cut costs by reducing the staffs that interact with customers. And they have built revenues by piling more merchandise onto higher shelves, in the process providing more hiding spaces for thieves. “Shoplifting is alive and well in every retail store,” says McGoey. “It’s driven by the same old thing: People have the desire to get something for nothing.”

As daunting as the security task may seem, retailers can help stem losses by employing shrinkage reduction techniques and energizing personnel to engage more intimately with customers. “Such activities carry a double benefit,” says McGoey: “They serve to reduce theft in the store and also spread the word that a retailer takes security seriously. More sophisticated shoplifters will look for stores with lax policies.”

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