External theft is the stealing of merchandise, cash, goods, or fraud resulting in loss by shoplifters. According to the Hayes International Theft Survey, there were 1,014,817 shoplifting apprehensions resulting in a recovery of over $111 Million from the participating 25 retailers in 2009. This number is actually an increase of 1.0% from last year.
There are two main classifications of shoplifters: amateurs and professionals. Most shoplifters fall into the amateur category. Meaning they usually do not enter a store with the intention to steal. They see an opportunity to steal an item and take it. This group is also comprised of the teens under peer pressure to steal, or desire certain items to fit into a group but cannot afford them. These types of thieves will demonstrate a high level of nervousness and will often be looking over their shoulder or avoid eye contact with associates. They may also be looking around for security cameras before performing the theft. These types of shoplifters will most easily be stopped by having an employee presence in the area to offer customer service to them, or even simply applying security tags on items.
The professionals are the one’s who steal for a living. These thieves are often very confident, have specific items in mind before entering the store, and are fast at performing the theft. In some cases they can be in and out with thousands of dollars worth of merchandise in under 5 minutes! These thieves target merchandise that is small, has a high dollar value, and can be easily resold. Some of the methods they use are box stuffing (placing high value items inside lower valued item box), barcode switching (placing less expensive UPC’s on high priced items), double shopping (purchasing a high dollar item then exiting and re-entering, selecting the same item and exiting a different door showing the original receipt as proof of purchase if questioned), refund fraud, or simply attempting to walk out of the store with the unpaid for merchandise unnoticed.
Preventing External Theft
One of the best ways to deter external theft is providing superior customer service and having departments fully staffed. Most thieves don’t want to interact with store associates in any way, so offering them assistance will make many decide against it. Some retailers lock up high theft merchandise and will have an associate unlock and bring the items to the register for a customer when they are ready to purchase. This can hinder customer service objectives in some ways but is a strong control in preventing theft. EAS (Electronic Article Surveillance) is also widely used in the retail industry. This is a method of affixing tags or electronic devices to items which will sound an alarm if taken out of the store before being removed or deactivated at the register by a cashier.
Check Out: Physical Security Program, Know the Process
External theft will always be a problem but the goal is to identify where your losses are occurring and to determine ways to prevent further losses. This could be by apprehending the suspects causing the loss, limiting quantities on the shelf, using EAS tags, dedicated surveillance on specific items, or increasing awareness in the store of high theft items.
- Working in groups in order to distract your employees while one person steals.
- Waiting around for shift changes so that there are more distractions.
- Putting merchandise into a purse or handbag and paying only for that item.
- Tucking stolen goods into their jackets, pants, purses, or, as disgusting as it is, their child’s stroller or carrier.
- Returning merchandise that was not purchased in your store.
- Switching labels. I.E. Putting a.99 cents label for a candy bar on a $100 dollar item instead. (Yes, this is still considered shoplifting!)
Here are a few steps that retailers can take to curb shoplifting in their stores.
1) Greet Customers
Acknowledging customers when they enter the store is much more than \good customer service. Sure, greeting customers makes them feel welcome, but it also tells potential shoplifters that staff can see them. That verbal and visual acknowledgement can sometimes be enough to scare potential shoplifters into rethinking their actions.
2) Adequate Staffing
As we mentioned earlier, one of the easiest ways for shoplifters to get away with stealing is when other customers or duties distract store staff. One of the most effective ways to prevent shoplifting is to make sure there are enough employees on the floor and that staff are spread out across departments or areas. Large stores often assign specific floor sections to employees so that they’re responsible for greeting and assisting all customers that enter that specific area.
3) Store Layout
The layout of a store can affect how easy it may be for shoplifters to succeed. Some things to keep in mind include:
- Consider putting highly desirable items in one area, assign staff to closely watch the aisle or area, and design the area in a way so there’s only one entry/exit point.
- Install mirrors in blind spots.
- Hang anti-theft signage to deter shoplifting in unattended corners.
- Keep store windows clear to aid visibility.
- Place the checkout counter near the entrance to the store to require customers to pass by before leaving.
4) Limit Changing Room Items
In order to take account of which items enter and exit clothing changing rooms, implement a store policy that limits the number of items a customer can take inside the room at a time. Have staff count out the number of items and hang or fold them so that each item is visible inside the dressing room. Only when a customer is finished with one item can they swap it with another they’d like to try on.
When the customer is done, ask them to bring all of the items out of the change room and have staff count them quickly so that the same number of items are returned.
5) Train Staff
Perhaps the most important tip is to educate any staff that interact with customers on loss prevention. Training employees on shoplifter traits and providing a store policy on how to handle these customers is a retailer’s most effective tool. Simply having a staff member approach a suspicious customer and ask, “Can I help you?” or “Can I ring that up for you?” can deter shoplifting without sounding accusatory or rude.
It’s also important to let staff know that if they see a customer steal something, they should alert a manager immediately and not try to take action on their own or chase down the shoplifter.
Enhancing current approaches to combat ORC
- Environment — “We prosecute” signage, hard to remove “Sold only in (retailer name)” stickers on items, small store layout changes, and ORC-aware changes to fitting room policies/staffing and visible technologies like Electronic Article Surveillance (EAS) and video surveillance.
- Personnel — “Loss Prevention Greeters” at store entrance monitor the exit and flag suspect behavior to help reduce shoplifting, whether opportunistic, habitual or organized.
- Antifraud measures — Stricter policies governing cash receipts can have a big impact: marking “cash plus store credit” purchase receipts with cash amount blocks the most lucrative form of return fraud. And “this store only” return policies at high-risk stores significantly impair gift-card consolidation and online monetization.
- Detection — Expanding established EAS and video surveillance programs based on patterns of organized crime raises the risk of detection, making stores far less attractive targets. Utilizing video surveillance to monitor suspicious or repeating ORC criminals and alerting store associates if theft occurs provides another opportunity to raise the risk of detection.
Deploying new technologies
Extensions of EAS technologies specifically targeting ORC include:
- Jammer detectors that respond to signals thieves use to overwhelm the electronic resonances on which EAS detectors depend.
- Booster-bag detectors that detect aluminum-foil-lined containers carried into stores.
- Selective remote alarms that redirect data from jammer detectors and booster-bag detectors to notify staff that a thief has entered the store.
New applications of video surveillance help combat shoplifting of all kinds, and ORC in particular:
- Linking jammer and booster-bag detectors to digital video surveillance helps stores capture pictures of potential thieves entering and leaving the store. When item-level information from RFID tags are integrated into loss prevention, stores can link video evidence of theft events to goods recovered from thieves at storefront or in the parking lot.
- Advanced technologies extend video surveillance to include facial recognition, monitoring of “exception behaviors” typical of gang theft, and storewide surveillance tracking likely thieves.
- Pervasive video: shelf-level cameras linked to advanced detectors can provide an end-to-end record of theft events, together with filtering out activities of legitimate shoppers.
Organized retail defense
The final step in fighting ORC will come when retailers organize, turning the gangs’ most powerful method against them, with strategies including:
- Predictive analytics — integrating information from EAS, jammer, booster-bag, and RFID detectors, video surveillance, human intelligence and more can identify theft patterns within and across stores, for efficient deterrent deployments, countermeasures and enforcement.
- Real-time adaptive analytics — monitoring point-of-sale data, store traffic, and real-time inventory lift from both sales and theft will help stores align associate staffing to shopper behavior patterns to maximize sales and minimize theft.
- Collaboration and enforcement — the retail industry, together with government and law-enforcement agencies, are beginning to organize against the ORC problem and extend through public-private partnerships all the way to national legislative initiatives and cross-border extradition agreements.
Organized Retail Crime is emerging as a significant threat to retailers worldwide. Its growing incidence and sophistication, the high costs per incident, and advanced opportunities for monetization reveal a global problem requiring immediate, sustained attention.