Loss Prevention Spending – What’s Your Goal?

A South African newspaper recently featured an article about a woman caught on video stealing a variety of products. (http://www.bit.ly/AmTheft_i1).  When the shoplifter is caught, this recording should provide effective evidence toward conviction.But as a shop owner, you have to think about your loss prevention objective. Would you prefer to deter theft or to prosecute shoplifters? 

Like all costs, anti-theft programs and equipment require an understanding of what you can expect from your dollars spent.

In the case of Security Cameras (CCTV) systems, you can expect some degree of deterrence. But unless you’re a large retailer and spending the money to have someone watch monitors all day long, its deterrence impact is limited. Video recordings are particularly effective, however, in the area of prosecution (…if you use quality cameras and quality recordings. When you can’t clearly indentify the criminals, they are of limited value). CCTV is also effective in monitoring and spot-checking employees, particularly at cash registers, or when you may already have some suspicion.

For most retailers theft prevention and deterrence is preferable to prosecution. Preferable both in terms of cost effectiveness and peace of mind.

All loss prevention tools have their place and limitations.  Understand the role of each tool you use. Implement a multi-pronged approach to theft deterrence reflecting your situation.

Electronic Article Surveillance (EAS) systems, when effectively implemented, are another good prevention tool. Small tags attached to merchandise set off electronic alarms at your doors. They’re more effective at deterrence than many other tools, sending potential shoplifters to unprotected stores as well as alerting you to unauthorized products leaving your store.

But you do have to think about the products you’re safeguarding and the best way to protect them. Tags are available to secure just about every type of merchandise.  If you’re implementing a system like this, work with your supplier to make sure that the tags and tools you’re using are effective for your product mix.

Packaging has also been proven to make a difference. Many of us remember the long CD boxes that used to help prevent pocketing of music. Those are no longer in use as manufacturers have cut back on packaging cost and reduced waste packaging. The problem is that cd’s and dvds are now easier to hide and steal. 

Other high theft items — cosmetics, bottled items, electronics, gift products …anything small enough to easily conceal and remove from your store — face the same problem.

In this era of  “Green Merchandising,” protective packaging, such as “Keeper” (or “Safer”) boxes can be effective at theft deterrence. Reusable locking polycarbonates boxes allow the product to fully seen in its original packaging, yet make it difficult to pocket. You’ve probably seen these in use at just about every electronics and office supply store. They’re now being used with increasing acceptance in other areas of retailing. Keepers are now manufactured with a “high end” look in mind.

A recent Loss Prevention Research Council study focused on the impact of Keeper use on health and beauty product theft. Their study showed lower shrink and higher sales in test stores that used Keepers. And there was a positive “return on investment” within just months.

There is no single solution that you can set and forget. In addition to CCTV, EAS and Keepers, there is a wide range of effective products and techniques that can help minimize loss and theft from your store.

Before you spend another cent on loss prevention think about your goal.

Contributed by Alan Herbach, who is President of American Theft Prevention Products, Inc. (www.AmericanTheftPrevention.com) which provides retailers with tools to effectively combat shoplifting. Alan can be reached by email at aherbach@AmTheft.com and can be followed on Twitter under the name AmTheft. You can also visit his professional blog at http://AmTheft.wordpress.com.

Ways To Avoid Retail Theft

The thing about theft is that you never really catch up.

If a $100 item is stolen from you, and you operate on a 25% margin, you need to sell $400 more just to make up for that one theft.   

So where’s your profit on that additional $400 sale?

But really, theft prevention provides an even greater financial benefit than it seems. Theft reduction adds directly to your profit. Stolen merchandise comes directly out of your bottom line.

Plus, it’s just plain frustrating to be robbed.

Don’t think that just because you have a small store, or your customers are “from the neighborhood” you are safe from shoplifters. Many shopkeepers tell stories of “regulars they thought they knew” stealing from them.

Don’t think that because your store is small, you can keep an eye on everything.  Check out YouTube, or your local police report. You’ll find plenty of examples of theft from small shops.  Are you cutting back on staff? What’s going on when you’re in the stockroom?  What’s going on when you are helping another customer?  Are you fully watching the store as you answer the phone or check a customer out?  The fact is that you can’t be watching everything all the time.

So what’s a small shopkeeper to do?

Here are a few tips that you can implement immediately.   

1. Provide Good Service.  Nothing is effective as having people around.  When you make it inconvenient for people to steal from you, they usually don’t. They are interested in your product, not getting caught. Welcome every customer as they enter your store.
2. Know Your Product and Pricing.  One common technique of thieves is to change price tags. If you don’t know every price by heart, at least have a sense of what pricing should be. When an item comes to the register that doesn’t seem right, double check.
3. Keep Your Store Orderly and Stocked.  This will help you notice missing items.
4. Have Appropriate Suspicion.  It’s not about ethnicity, age, hairstyle or economic condition. There are ample examples of upper class shoplifters. Watch how people are dressed. For example, an inappropriately heavy or baggy coat out of season may be a vehicle to hide items. Are they carrying a large bag? Watch where people go in your store. Do they tend to move from one hidden area to another?  How do they react when you talk to them?
5. Verify Returns.  One technique of thieves is to legitimately purchase an item, and then return an empty (or weighted) box. Verify all returns. Check receipts (you can use gift receipts). Make sure returned products are complete. If you use electronic security, re-tag returned merchandise.
6. Work With Your Colleagues.  When suspicious, be sure to alert your co-workers.
7. React Appropriately.  When you do suspect shoplifting, respond and react politely. Don’t accuse. Approach the customer to offer service. Politely talk to the person; offer customer assistance, ask to check their bag and “double check” your receipt.
8. Train Your Employees to provide good customer service and to identify suspicious customer activity. Theft prevention is not just a management responsibility. There are training videos available to help.
9. Know Your Police Department. Talk with local public safety and security professionals about general rules of thumb regarding the best way to react. Don’t risk personal safety or legal problems by reacting inappropriately.

As you can see, these tips focus on customer service. Understand the balance between good customer service and customer harassment. These techniques will provide you with happier customers, lower theft and higher profits. 

 Contributed by Alan Herbach, who is President of American Theft Prevention Products, Inc. (www.AmericanTheftPrevention.com) which provides retailers with tools to effectively combat shoplifting. Alan can be reached by email at aherbach@AmTheft.com and can be followed on Twitter under the name AmTheft.