Shoplifting and Loss Prevention: Do We Need a Fresh Look?

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Traditional Loss Prevention is not working. If it was working, the retail world would not still be suffering $35 million or more a day in losses. If it was working, retail owners and store directors would not be going through security and loss prevention officers or the security companies they represent like the free samples they often hand out to customers. Security experts and loss prevention companies would not be constantly scrambling for new accounts, or be in conflict with the accounts they service.

Shoplifting is one of the least detected and most unreported crimes. Stock control in many stores is so deficient that few retailers know how many goods they are losing to shoplifters or their own staff. Statistically, so long as shrinkage does not exceed 2-3% of goods sold, retailers pay little attention to shoplifting. There are also financial incentives for managers to increase the bottom line profits. The bonuses they receive are often based on profit margins, and paying for security services can be a drag on profits. Managers are under constant pressure to justify expenses in a corporate world driven by profit.

Retailers have spent millions trying to address the problem of shoplifting. They invest in cameras and recording equipment and hire plainclothes officers or uniformed officers in an attempt to catch the shoplifter. Our personal experience has taught us that many retailers’ perception is that if shoplifters are not being caught and arrested; the security company is not doing its job. Arrests are a tangible result in the eyes of many retail managers and administrators. It is justifiable proof that the money they are spending on loss prevention is indeed paying off and as a result there is a stink in the air. There is often an unspoken expectation directed toward the loss prevention/security officer, which goes something like this: “If you are not making arrests, you must not be doing your job. If you are not doing your job, why are we paying you?”

Let’s think outside the box for a moment. If there was a method of effectively deterring shoplifters, and officers were successful at it, would retail managers and administrators recognize it? After all, there will be very few arrests if the “prevention” part of loss prevention is successful. In fact, if the officer is doing the job well they will be making fewer arrests and having fewer confrontations; not more. We encourage retail managers and administrators to take the time to fully understand the problem of shoplifting, along with the legal and safety challenges the security officer faces in every interaction they have with a customer or potential shoplifter.

Good security companies are hard to find, but those who excel understand their business. They hire good officers, use sound techniques, train their officers well and manage personnel to the best of their ability. Unfortunately the “way we have always done business” holds many of their abilities captive. Rather than becoming a partner in deterring theft, the loss prevention officer becomes a necessary evil. The officer is often disdained by the retailers that hired them, yet is required in order to reduce liability and curtail theft.

Defining the Main Issues

• The largest problem in the area of retail loss is the inability of Loss Prevention Specialists to convince and persuade store owners and managers to improve their security based on solid research.

• Retailers install state of the art camera systems, and then fail to train officers how to use them effectively. Sometimes retailers do not maintain their camera systems. Or perhaps the cameras are not placed in critical locations. Some hidden cameras should actually be exposed.

• Many retailers and some security companies use emotion rather than research to guide critical decisions regarding officer work hours and loss prevention methods.

• Retailers under-staff shifts which results in officers not being effective. Imagine one checkout clerk to 100 customers. Yet, there exists an expectation that one officer on duty will be able to effectively monitor cameras, patrol the property, make regular rounds and address any safety issue that spontaneously arises in addition to catching all shoplifters. The statistics tell us that 1 in 11 people shoplift. How does one officer effectively accomplish all this?

• Retailers put an enormous amount of pressure on officers to produce results. This landed one retailer in the middle of a lawsuit as officers went beyond the legal limits to produce results. It cost the retailer over $50,000 in the resulting lawsuit. 50K goes a long way. Depending on how you work the numbers, this amount is equal to the amount it would have cost to employ one loss prevention officer for over 3,000 hours. The manager responsible for the debacle wanted results. He was heard to say to his officers; “Go stir something up. Let’s get something going.” He received costly results.

• The Retail Industry doesn’t listen. I recently provided consultation to a retailer where one of the managers insisted plainclothes officers confront customers parking in “no parking” zones; despite the fact the retailer had sworn uniform police officers patrolling the parking lot whenever the store was open. Common sense would dictate the police officer would be the logical one to speak to customers about parking violations; not the loss prevention officer.

• Retailers and Loss Prevention Specialists have little respect for each other. Time and time again retail managers have expressed their frustration with the officer who is assigned to their store but shows up late, in a dirty uniform and is more interested in fraternizing with employees rather than catching shoplifters. This is a legitimate complaint and the burden rests squarely on the hiring procedures and training requirements of the Loss Prevention/Security Company.

In summary, there are many retailers and loss prevention personnel who just don’t get it. Neither one wants to spend money to facilitate sound loss prevention principles in the spirit of excellence. The retailer wants to dictate the mission of loss prevention without looking at the available research. Retailers are good at what they do; selling things. They are not security and loss prevention experts. Yet, they demand results.

Can you imagine the response to the loss prevention officer who walks into the retail manager’s office and suggests how they might better price some of their items? Conversely, loss prevention companies complain about the way they are treated by retailers while providing them officers that are indifferent and unprofessional. There needs to be some open dialogue about these issues.

To wage a war one first must understand the enemy. To find any solution it is desirable to understand the problem first. Let’s take a look at who the shoplifter is.

Shoplifting Facts

Information and statistics provided by the National Association for Shoplifting Prevention, a non-profit organization.

• More than $13 billion worth of goods are stolen from retailers each year. That’s more than $35 million per day.

• There are approximately 27 million or 1 in 11 people, who shoplift in our nation today. More than 10 million people have been caught shoplifting in the last five years.

• Shoplifting affects more than the offender. It overburdens the police and the courts, adds to a store’s security expenses, costs consumers more for goods, costs communities lost dollars in sales taxes and hurts children and families.

• Shoplifters steal from all types of stores including department stores, specialty shops, supermarkets, drug stores, discounters, music stores, convenience stores and thrift shops.

• There is no profile of a typical shoplifter. Men and women shoplift about equally as often.

• Approximately 25 percent of shoplifters are kids, 75 percent are adults. 55 percent of adult shoplifters say they started shoplifting in their teens.

• Many shoplifters buy and steal merchandise in the same visit. Shoplifters commonly steal from $2 to $200 per incident depending upon the type of store and items chosen.

• Shoplifting is often not a premeditated crime. 73 percent of adult and 72 percent of juvenile shoplifters don’t plan to steal in advance.

• 89 percent of kids say they know other kids who shoplift. 66 percent say they hang out with those kids.

• Shoplifters say they are caught an average of only once in every 48 times they steal. They are turned over to the police 50 percent of the time.

• Approximately 3 percent of shoplifters are “professionals” who steal solely for resale or profit as a business. These include drug addicts who steal to feed their habit, hardened professionals who steal as a life-style and international shoplifting gangs who steal for profit as a business. “Professional” shoplifters are responsible for 10 percent of the total dollar losses.

• The vast majority of shoplifters are “non-professionals” who steal, not out of criminal intent, financial need or greed but as a response to social and personal pressures in their life.

• The excitement generated from “getting away with it” produces a chemical reaction resulting in what shoplifters describe as an incredible “rush” or “high” feeling. Many shoplifters will tell you that this high is their “true reward,” rather than the merchandise itself.

• Drug addicts, who have become addicted to shoplifting, describe shoplifting as equally addicting as drugs.

• 57 percent of adults and 33 percent of juveniles say it is hard for them to stop shoplifting even after getting caught.

• Most non-professional shoplifters don’t commit other types of crimes. They’ll never steal an ashtray from your house and will return to you a $20 bill you may have dropped. Their criminal activity is restricted to shoplifting and therefore, any rehabilitation program should be “offense-specific” for this crime.

• Habitual shoplifters steal an average of 1.6 times per week.

• Statistically, the majority of shoplifting incidents occur late in the week, between Wednesday and Saturday. Other high-risk times include non-school days, late mornings and late afternoons into the evening.

Employee fraud aside, we believe the most important statistic is: The vast majority of shoplifters are “non-professionals” who steal, not out of criminal intent, financial need or greed but as a response to social and personal pressures in their life, and shoplifting is addicting.

Differentiating Types of Shoplifters

Author Terry Shulman (JD, MSW, CSW, ACSW, CAC-I) divides shoplifters into six distinct groups, each with certain identifiable characteristics and expected responses if they are caught. The percentage that follows is Shulman’s estimate as to the percentage of the total shoplifting population that the particular group comprises. Note: These percentages will change to some degree depending on the demographics of the area.

• The Addictive-Compulsive Shoplifter represents 85% of the shoplifter population. This group emotionally has a lot of repressed anger and often exhibits signs of other compulsive addictions, such as overeating, shopping, drug use, or gambling. These people often give to others and don’t take care of themselves. Typically, they will steal items that are often inexpensive, and then give them to others as gifts. If caught, they will show guilt, shame, or remorse. Often, they will breakdown and cry when caught and confronted.

• The Professionals are those who steal for profit or lifestyle and they represent 2% of the shoplifter population. Professionals will try to steal high-end, expensive items, often stealing multiple items at one time. Many carry tools and utensils on them to assist with the theft. Most likely, this group will resist arrest if confronted and will attempt to flee the store. If caught and detained, they will remain cool and calm, showing no remorse or emotion.

• The Impoverished are those who steal out of economic need and they represent about 5% of the shoplifter population. Typically, they will steal necessities, like food, diapers, toiletries, or children’s clothing. Often, their manner of dress and hygiene may be poor. If caught, they will usually show remorse, but state their frustration with their lack of money, and may voice hostility against a “System” that keeps them impoverished.

• The Thrill Seeker steals on a dare or for the excitement. They represent 5% of the shoplifter population. These shoplifters will often steal in groups. Many teenagers fall into this category.

• Drug Addicts steal to pay for their drug habit and they represent 2% of the shoplifting population. Like Professionals, they prefer stealing expensive, high-end items, usually multiple items at a time. Their appearance often shows signs of substance abuse. They often carry drugs or drug paraphernalia on themselves. They are usually less careful than the Professional, but will likely flee the store if confronted.

• Kleptomaniacs are people who steal for no apparent reason and they represent 1% of the shoplifter population. Kleptomaniacs are impulsive and often careless. They will often take items they don’t need and can’t use, like stealing shoes that don’t fit. If caught, many will admit they are kleptomaniacs and do not feel much remorse or shame. They will often use common excuses, like “I don’t remember taking it”, or “I don’t know why I took it because I don’t even need it”.

Narrowing the Focus

The focus of loss prevention should be prevention. Prevention policies and techniques should be aimed at the people responsible for 85% of losses; the Addictive-Compulsive Thief.

The behavioral characteristics that should be considered when looking toward techniques that are effective with this group are:

• There is a recurrent failure to resist obsessive, addictive, or compulsive thoughts and urges to steal objects.

• There is already an ever-present tension in their lives well before commission of the theft.

• The act of shoplifting brings pleasure and relief at the time of, or just after committing theft.

• They usually feel guilt or shame afterwards.

• The stealing is very often acting-out behavior based in anger, or a way of trying to “make life right.”

• The stealing is not due to Conduct Disorder or Antisocial Personality Disorder. Most people who steal are good, caring, law-abiding people.

• This group of people is at risk of cross-addiction.

You now have a behavioral snapshot of the psychology behind the people primarily responsible for most of the shoplifting in the United States. The customer causing most of the loss in retail is doing so compulsively, successfully, often, spontaneously and is undeterred when caught. This person is possibly as addicted to shoplifting as is the drug addict to the drug.

Fear of consequences does not deter this type of shoplifter. Prosecuting shoplifters does not deter future shoplifting. Many have been arrested before and already know the potential of jail is there, but they are too smart to get caught.

We recognize there are store managers who, regardless of research, cling to “old-school” techniques including catching as many shoplifters as possible, believing word will spread around the community that their store is one the shoplifter should avoid because of aggressive enforcement. The key here may not be in sending everyone to jail, but in raising the perception the shoplifter will get caught. If you choose this route, it is best accomplished by catching as many shoplifters as possible and processing them quickly. It may be well worth considering just trespassing the offender, by-passing the arrest reports and waiting for the police to arrive. If the merchandise is recovered and the shoplifter can be quickly processed this way, word will spread. By doing so a store can create an illusion they are catching everyone. However, this strategy does not address the core problem.

Framing the Solution

I have had significant professional experience with people who are struggling with addiction. Additionally, I have had contact with a large number of rehabilitation and recovery programs. There is one principle in addiction you can almost always count on. Until the addict reaches their own personal bottom, outside intervention has little impact, as evidenced by the large majority of shoplifters who have been caught but continue to shoplift. Additionally, addicts are experts at manipulation and deceit. They know how to reach their goal.

Most addicts in recovery have their own story to tell; how they hit bottom. It is unlikely that the Retail and Loss Prevention industry is going to facilitate the recovery of the shoplifting addict as this is not part of their mission. However, they can put some simple things in place to get the addict to think about their behavior. One of the soundest techniques with compulsive and impulsive people is to get them to slow down; to think through their actions and the potential consequences. Retailers can do this.

Impulsive people tend to develop psychiatric problems, be substance abusers and are characteristic of anti-social personality disorder. Normal inhibitions, which most of us possess, get no time to rise in these people. If the impulsive person’s internal inhibition had a voice, it would be saying; “I am not responsible for my life.” If the impulsive person’s external inhibition had a voice, it would be saying; “I have no control; my life is ruled by external events.” The need to satisfy immediate needs is all they focus on. This impulsivity is most effectively diffused by keeping them in the “here and now”, not yesterday or tomorrow.

The technique of getting them to slow down and think about what they are about to do is central to many cognitive-behavioral interventions for the addict. It teaches them how to stop before acting impulsively and think about the cause and effect relationships of their intended behavior. Beyond that, it encourages them to verbalize to themselves or others what they will do, and then do the chosen behavior. Again, the purpose of the technique is to slow down the impulsive thinking long enough to get them into the “here and now”.

Before we apply this principle to loss prevention, let’s take a look at some loss prevention research. Then, we will consider some simple techniques with the primary focus and goal being to pull the impulsive shoplifting addict into the here and now.

Loss Prevention Research

Loss prevention is not complicated. Once the asset or merchandise to be protected is determined, figure out what losses you are willing to accept. Then, based on finances, begin to put barriers in place between that merchandise and the person intent on stealing it. You implement these barriers in concentric circles, starting from the outside perimeter working in towards the identified merchandise.

1. One well-known study showed that when specific merchandise was prominently marked with large red stars as being frequently taken by shoplifters, shoplifting was virtually eliminated. Researchers explained that publicly identifying specific items made the threat of detection and apprehension tangible.

2. Research suggests that plainclothes store detectives have only a limited impact on shoplifting. A study in a large London music store showed the store would need to hire 17 times more than the 4 store detectives they had on duty to catch all the shoplifters likely to enter the store. Advertising an officer’s presence (uniformed officer) has a greater deterrent effect than a plainclothes officer, but it may also mean that shoplifters exercise greater caution. Little is known from research about the effectiveness of the uniformed security guard. In general, guards who continually move around, creating an active, visible presence, are likely to be more effective.

3. There is little evidence that prosecuting ordinary shoplifters is an effective preventative measure. Consequently, there is considerable value in making the arrest procedure more efficient.

4. Civil Recovery: In nearly ½ of these cases, the sums are paid. Civil recovery is not meant to be a substitute for criminal proceedings. Rather, it is meant to provide an additional shoplifting deterrent.

5. Banning known shoplifters: Little is known about the effectiveness of this practice, but it might have some limited value.

6. CCTV. Research indicates the value of cameras is directly related to the sophistication of the system used. Effectiveness is usually quite marked in the first few months after installation, but then tapers off. The explanation for this by researchers is that would be offenders become increasingly desensitized to CCTV. We think it is also likely that officers eventually get into work patterns that may reduce their time in CCTV monitoring.

7. Using Electronic article surveillance and tagging (EAS). Multiple studies have shown this practice could reduce inventory shrinkage from 35-75%. There are, however, considerable costs in buying and running EAS systems.

Recommendations

Before implementing any strategies, you should make attempts to measure the problem first. Is there an inordinate amount of roll-outs occurring? Where are the most opened items and cases found? It is good to define the greatest areas of vulnerability, and then employ strategies that target the vulnerability. Highest risk items should be given greatest protection.

Parking Lots: Keep the parking lot and outside entrance doors clean and neat. Mount an obvious camera in the area. Keep “no parking” areas clear.

Cameras: Mount CCTV at the front entrance of the store: customers will see themselves on television while walking into the store & when leaving. Monitors should be conspicuously placed. For covert surveillance it is preferable to have the camera camouflaged, as most internal cameras are. Use these cameras to catch the offender doing something wrong without advertising they are being watched. Most people do not look up in any environment unless prompted to do so. That is why these cameras work well in those situations. However, for deterrence, you want people to know there is a camera watching them. The camera does not have to be real, but it should be obvious. After all, perception is most people’s reality.

Signs at the Store Entrance: These signs should indicate that the store is monitored by camera surveillance, security personnel, and undercover officers and that the store has a zero tolerance policy towards shoplifters.

Several years ago I was asked to consult for a store that was leasing space at a major mall for a limited time to sell clearance products. I advised them to put signs at the entrance to the store space indicating the store was being monitored by electronic and human surveillance. Within 24 hours the store owner was approached by mall administrators telling them to remove the signs, because they did not want the public getting the wrong impression. This, of course, made no sense at all, and was clearly based on the administrator’s fear that such a sign might plant the perception of a criminal presence into the mind of shopper.

We suggest something new and different; a direct statement to the person responsible for 85% of the shoplifting – the addictive/compulsive thief. The sign might read; “If you are struggling with shoplifting addiction, we recommend you consider the consequences of shoplifting. You will be arrested and prosecuted vigorously. There will be legal charges you will incur. You will be trespassed from this store and post your picture. We also contact one immediate family member and inform them of your actions. Please consider contacting Shoplifters Anonymous at xxx-xxx-xxxx or ShopliftersAnonymous.com.” We would go as far as to suggest perhaps there be pamphlets available as well to the shoplifting addict. This provides further intervention and a public relations side benefit is the obvious concern the store has for those struggling with addiction.

Suggested Sign Language

• These premises under Video and Officer Surveillance. We prosecute all security offenses.

• We reserve the right to inspect all bags entering or leaving this facility.

• Warning! All activities are recorded on video to aid in the prosecution of any crime committed on these premises.

• Notice! For security reasons individuals entering or leaving the premises may be subject to search of their parcels or other unusual items.

• Free! Ride in a police car if you shoplift from this store.

• Attention Compulsive Shoplifters! If you are struggling with shoplifting addiction, we recommend you consider the consequences of shoplifting. You will be arrested and prosecuted vigorously. There will be legal charges you will incur. You will be trespassed from this store. We also contact one immediate family member and inform them of your actions. Please consider contacting Shoplifters Anonymous at xxx-xxx-xxxx or ShopliftersAnonymous.com.

• Attention all shoppers! Merchandise marked with red stars are items being frequently taken by shoplifters.

Instruct your employees and loss prevention or security officers to make direct eye contact and speak to as many customers as possible. Customer service is one of the easiest and most effective ways of deterring the shoplifter. A shoplifter needs privacy to steal. Good customer service greatly reduces the customer’s privacy through visible contact and direct communication. This direct communication translates into an unconscious message of “bonding” between the store and the potential thief. It unconsciously deters the notion of shoplifting. It is more difficult to steal from someone you know than a complete stranger. Make the customer feel welcome. Make the customer happy. Make the customer feel that you are ready to help them with their shopping needs. Start a conversation; anything to create a bond with the customer.

In the event that the officer or employee suspects a customer is attempting to steal, they should immediately approach the customer and offer assistance. The potential shoplifter is likely to think they have just been observed shoplifting. If they think they are caught, they may want to leave the stolen item in the store. There are several ways of handling this. The officer can just back off so the shoplifter can “unload” the item. If there is some certainty they have concealed an item, an employee might offer to hold it for them at the register until they are ready to check out. Most employees have little interest in acting in a security or loss prevention capacity. This attitude must be nurtured by managers.

Match a uniform officer with a plainclothes officer for every hour of loss prevention coverage. They provide two very distinct functions. Our research indicates this is the best combination to deter theft. One without the other simply lacks the overall effectiveness they have working together. If the budget allows only one officer, we recommend a uniform officer who spends a great deal of their time concentrating on the primary issues presented in this article.

Mount an obvious camera, or dummy camera, in areas of commonly stolen items. If using a camera encased in the fiberglass bubble, the bubble should be placed low enough so the potential thief can see it.

Environmental Design is important. Access to the shoplifter’s target should be time consuming. Mirrors can be used to see around corners, or to make the potential shoplifter think they are being watched. Electronic tags are a possibility for the small, expensive items that grocery stores sell like health and beauty products and cigarettes. Sign and posters can be used to reinforce security messages. They should be placed where potential shoplifters will see them and around the store in various locations, particularly around high-risk merchandise. It raises the perception that the store is serious about security. Direct customer traffic. Utilize less entrances and exits. Reduce passageways, blind corners and hidden alcoves. Reduce high displays that conceal shoppers. Arrange aisles that staff can easily survey from one end to the other. Remember, goods on the ground floor and near entrances are at greater risk of theft, because the shoplifter is in the store for less time and is thus at less risk of getting caught. Move hot products into higher security zones.

Post an officer or employee near the entrance just to check for a receipt. You may have noted at some of the Superstores like Costco and Sam’s there is restricted customer entry and exit. Most have to enter and exit through one door. When exiting, there is an employee standing there to take the customer receipt and match it against their merchandise. This, we realize, may be unrealistic in a grocery setting, but just checking for a receipt, and not checking it against the merchandise may have an overall effect.

Please consider the study in which specific merchandise was prominently marked with large red stars as being frequently taken by shoplifters and shoplifting was virtually eliminated.

We like keeping things simple and this one is a “no-brainer”. Either post store personnel close to the area most items are taken from or take those items and move them to an area where they are in direct eye-line sight of employees. Lacking these actions, we suggest you put up a camera or dummy camera in the area and make the camera obvious, or post a uniformed security guard in that area.

I recently spoke to a retail manager at a major chain who indicated he has suggested, for several years, that the aisle containing frequently stolen items be moved to an area within employee view. The suggestion has fallen on deaf ears. Those who are in authority over him have decided aesthetics and consistency between stores takes precedence over these losses. In these incidences little can be done to prevent loss.

We encourage all the traditional techniques of loss prevention, but only if they are effective. We do believe that there needs to be a shift in the focus of loss prevention from protecting the merchandise to directly addressing the shoplifter responsible for most theft. Loss Prevention and Retail Operations needs to begin to communicate more effectively, taking a fresh look at how they approach shoplifting.

The Bottom Line

In summary, you have just read a significant amount of information which, if implemented, can have a profound impact on losses.

1. Determine the focus of the problem.

2. Implement strategies based on solid research.

3. Hire the right people. Use integrity screening/testing tools. Remember, testing stores have far less employee theft than non-testing stores.

4. Train your people properly.

5. Keep your employees happy. You can solve up to 50% of your problems simply by keeping the employee happy.

Terry Hipp © 2010

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Source by Terry Hipp