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Crime and the Slumping Economy
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How has the slumping economy affected your store? Have you experienced economy-related crime in your store? Have you developed any effective ways to keep morale high, reduce turnover, and maintain low shrink levels during the slumping economy?
To read Dr. Hollinger's column on this subject, click here.
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| A. Krabbe February 16, 2009, 10:56 am |
Dr. Hollinger,
I have just recently transferred from a thriving off-price retailer (who are seeing sales gains even as the economy slumps) as a full time LP detective, to a 100+ year old full line department store (who, in order to keep stores from closing, has shut off money flow to all its extremities ie: LP) as LP Manager who is in charge of protecting an entire department store from losses. While I agree with some of your ideas about proactively evolving the way LP does business, some of them will not work for a company who's LP budget is $0.00.
I have seen the positive effect of offerring associates rewards for their effort in detaining shoplifters. The company I currently work for had done away with associate rewards a year before I arrived. The explanation I was given was, "All associates have a responsibility to protect company assets, so why pay them more for doing a job they are supposed to be doing anyway." The real reason is money. It was further explained to me that a store makes maybe 60-70 cents of every dollar we sell. If we were to initiate a $25 reward for catching a shoplifter,we would have to sell $35-40 dollars worth of merchandise to make up for that. Our average case value teeters around $80.00. The kicker is of that $35-40 sale, the company only takes in so many cents on the dollar as well, so it ends up costing the company even more to support our already struggling apparel sales. Some companies offer $200-$500 rewards for internal theft based on case value and other factors. Using the same figures for those rewards, we would have to sell $300-$750 to make up for the costs. While this method is great for companies who have money to spens, it will not work for the struggling stores who have to keep every penny they sell to keep from going bankrupt. An alternative is to offer discounts and merchandise too old to sell.
I do like the idea of enlisting shoppers to help prevent loss. We could coax them with something along the lines of a 10% off coupon. I will suggest that to the store.
I am not sure that I agree with physical security. It changes the job description from detecting and apprehending shoplifters to deterring. LP can work without a physical presence, but a physical presence would also need the support of LP. Now, while I agree this is an ideal situation, I am nowhere near prepared for that kind of payroll. It is hard to cover the store with what payroll I have now. That being said, we do have a very good corroboration with mall security, who will aid us in apprehending shoplifters, and who are more prepared to handle potentially violent situations.
One thing I took from your article I would like to see is deputizing responsible LP and better equip them to handle the violent situations we are now experiencing more than ever.
As far as facial recognition software, I am all for that. Again, show me the money.
Your ideas are warmly received by any LP professional who takes pride in the place they work. Unfortunately, anyone who has worked retail knows that it is an extremely political environment. Us bottom feeders love when the equipment trickles down from top, but what started at the top as an idea for an Intellex System with facial recognition and 20 color PTZ cameras, has had so many bites taken off of it that it is now is sitting at the bottom as a ca. 1998 ADT DV-R system with 5 days memory, 10 b/w PTZs, and 2 color stills to cover 20 registers.
This, in my opinion, is the reality. |
| Shawn B. January 22, 2009, 2:48 pm |
I was recently contacted by a Washington Post writer who saw this topic of discussion and my comments towards it. She is currently working on a story about this very topic and was inquiring about the types of shoplifters I have been detaining as of lately. To me, this is an indication of things to come if we don't get a grip of these troubling times. Retail crime is on the rise due to regular people without a criminal history feeling that stealing is their last resort. I just detained a hight city official who had lost his job due to cutbacks and budgets. Total professional, but he lost his job, his moral and theft was his last resort he felt. Stories like this one are common nowadays which is leading to the high increase in retail crimes I believe.
Thanks,
Shawn B. |
| Adam Hollanek December 17, 2008, 10:41 pm |
Bad guys caught in the act during big-screen demonstration
A funny thing happened at this past summer’s annual convention of the North American Association of Subway Restaurant Franchisees in New Orleans.
One of the franchise owners was demonstrating the loss prevention system he’d recently installed in his stores. On a big screen, fellow franchise owners were watching a live video feed from one of the stores as the franchise owner described the system.
That’s when it happened. If anybody had written a script like this, nobody would have believed it:
Right then and there, in the middle of the demonstration, the ezConnect system caught somebody red-handed trying to pull off a fraud involving gift cards.
The Subway franchise owners might have thought this was a joke for a second or two, but then it became clear that the attempted thievery was real and that they were watching it in real time as it happened.
Tied into the store’s point-of-sale system, ezConnect had spotted an unusual activity with the gift cards and was alerting the store owner to the situation as it was happening – and as the room full of franchise owners were watching.
“Needless to say, people at the convention were all talking about that demonstration,” said Leszek James, founder and president of the ezUniverse company that invented ezConnect.
Already running in Dunkin’ Donuts and Subway franchises across America, ezConnect is currently on its way to another 2,000 Subway locations, and, wherever it arrives, store employees get the idea right away: The boss may not be standing here, but you never know when he’s watching.
Every aisle is monitored – every door, every shelf, every slot of every drawer in every register.
The employees know the boss is watching.
Actually, the boss is doing a lot more than just watching. The boss is actively managing things at his various locations from his desktop or his laptop or his hand-held. |
| Mike Gilligan October 20, 2008, 3:36 pm |
Dr. Hollinger, welcome to my world. Operating effective retail loss prevention initiatives during difficult economic times or in a store closing environment is difficult at best. Most loss prevention executives have been cutting payroll and capital expenses for the past several quarters. The diminishment of observable shortage control tools and disciplines will result in a significant increase of inventory and cash losses. However, with a solid understanding of loss prevention fundamentals and human nature even this stressful environment is manageable.
During the grieving process a predictable sequence of behavior is experienced by most healthy adults; denial and isolation is followed by anger, bargaining, depression and finally acceptance. A sequential of loss prevention initiatives should be designed to address the potential for negative behaviors associated with the impending loss of a job.
My experience suggests an approach to the problem of uncertainty with initiatives that are designed in a sequence that has a beginning, middle and end. This linear approach guides the retailer and its employees by responding with an appropriate shortage control initiative at the appropriate time thus maximizing deterrent’s effectiveness.
By understanding the changing psychological environment retail decision makers and loss prevention executives can save money and maintain control in these difficult times.
Mike Gilligan
Hilco Asset Protection |
| Shawn B. September 24, 2008, 11:41 am |
| I am experiencing a little of both. As opposed to petty thefts that occured more often in the past it seems to me that the routine thieves that do it for a living, are now getting bolder. Running out with cart loads of merchandise. I have detained more people recently that shoplift in desperation. I have caught executives, professional business men, and others who wouldn’t steal otherwise. These types of thieves are the easiest to catch. I can tell they are completely new at the game. Each and everyone of these types have lost their jobs and resorted to stealing to pay bills and feed their families. |
| Richard Hollinger September 23, 2008, 10:23 pm |
| If retail crime is increasing due to the down turn in the economy, are these people former offenders increasing their crime involvement? Or, are there a new group of offenders being drawn into retail crime because of their desperate economic condition? |
| Shawn B. September 23, 2008, 3:50 pm |
I just read the article in which there seems to be a two sided view concerning the issue that our slumping economy has a direct affect on retail crime and other types of property crimes or not. I have worked in the Asset Protection industry for six years and since this downward slump in the economy, I have seen a significant rise in theft. Moreover, not only has it risen, people seem to be more daring, stealing higher priced and larger items than before that increases their chances of being caught. As of lately, almost all the lifters I catch say they are stealing because they had lost their jobs and just cannot find another one so stealing was their last resort.
To those that say the economy today is not taking its toll on retailers are taking a blind eye towards the issue. Additionally, I urge all retailers to invest in Asset Protection as myself and many others I work with, can only imagine theft increasing throughout the country as we try to rebuild our economy. |
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