Loss Prevention, Risk Management and Theft

1
Loss Prevention, Risk Management and Theft

• Businesses must deal with theft daily. There are
  two types of product theft, employee and
  shoplifter

2
Shrink is the enemy

• Most retailers experience about a 2 shrink rate.
• Department Stores 2.18 Drug Stores 2.33
• Mass Merchants 1.82 Apparel 1.84
• Hardware 1.98 Supermarkets
  .93 ?

3
Shrink is missing product

• After an inventory, shrink turns up on the
  closing inventory as a negative number. It is
  theft if it is still not found.

4
Supermarkets have half the shrink as other
retailers

• Two reasons
• People prefer not to steal food, as opposed to
  electronics or DVDs.
• Employees are treated better in the supermarket
  business compared to other retailers.

5
Up to 90 of all product theft is from employees

• Employees know where the good stuff is and how to
  get it out of the business.

6
According to a University of Florida study,

• Over 1/3, 35, of all employees say that they
  have stolen from their employer.

7
The most common way in which employees steal is

• Discounts to friends and family. Hey hook me
  up!

8
To control employee theft,

• There is five things businesses can do.
• Improve the quality of your employees
• Participation Management
• Awareness programs
• Reward Systems
• Control employees

9
Improving employees means

• Drug test employees. Employees with drug habits
  tend to steal.
• Background check employees. People who have
  stolen once might steal again.
• Require good interviewing practices.
• Have credit checks on employees. People who owe
  a lot of money tend to steal.

10
Participation Management is

• Is a theory developed by W. Deming a Columbia
  University Professor. To quote Deming the theory
  works on the belief that Dogs dont bite the
  hands that feed them.

11
In Participation Management, Employees are to
feel as though they are part of management.

• Businesses should
• Pay employees better.
• Require that all employees make suggestions
  regularly.
• Give employees great job titles
• Employees are to participate in stock purchases
  and profit sharing

12
Awareness Programs

• Talk about what would happen if caught stealing.
  What would your mother, wife or children think
  if you were fired for stealing?

13
A Reward System pays

• Employees for helping management to find thieves.
  A 100.00 reward is nothing for a business to
  stop what might be stolen.

14
A Reward System stops employee theft by

• Suggesting that employees might tell management
  about what they saw. A Reward System should be
  done in conjunction with a 1(800) for anonymous
  tips

15
Control Employees

• Employees should come in and out of designated
  doors
• Employees should be allowed only in specific
  areas
• Employees should never be given Keys (Only
  Management should carry keys)

16
Control Employees

• Employees should not be able to come in on their
  day off.
• Employees should never be given combinations to
  safes.
• Cashiers should have personal sign-on passwords
  and tills should be counted in and out after
  every register change.

17
Shoplifting

• Is a problem, but remember employee theft is a
  bigger threat.

18
Most commonly shoplifted items are

• Razor blades and shaving products.
• Cosmetics, especially face creams and perfumes.
• Wii and other gaming systems.
• Alcohol.
• Meat.
• Satellite navigation, or GPS, systems.
• Brand-name clothes, purses and accessories.
• Infant formula. Some stores lock up powdered
  formula, which is not only sold on the black
  market at a higher price but used to cut drugs.
  Who knew?
•  Watches.

19
According to a study by the National Retailers
Association,

• When Shoplifters and Retail Managers were asked,
  on a scale of 1-10,(10 the most effective) rate
  the effectiveness of these theft deterrents?
• They responded Retailers
  Shoplifters
• Product EAS tags 2
  1
• Trained employees 1
  2
• POS Systems 3
  1

20
Shoplifting Tool effectiveness

• They responded Retailers
  Shoplifters
• Closed Circuit TV 5
  4
• Fitting room staff 6
  5
• Mirrors 8
  2
• Security Guards 4
  8

21
In conclusion, Mirrors, according to retailers,

• Worked well in catching shoplifters. Shoplifters
  are not aware of this.

22
Secondly, that shoplifters are scared of security
guards

• And that retailers are not realizing this.

23
According to the FBI

• Shoplifters are grouped into five categories
• Adolescence, teens and young adults
• Bums, Vagrants, Alcoholics and Drug Addicts
• Impulse
• Professionals
• Kleptomaniacs

24
Teens are the most common

• Up to 80 of all Shoplifting is done by teens.
  Shoplifting is a gateway crime into other
  criminal activity.

25
Bums

• Are probably the easiest to catch. They often
  smell bad and everyone saw them take what they
  are stealing.

26
Impulse

• These are probably respectable members of society
  that just gave into temptation.

27
Professional

• You may never meet a professional shoplifter.
  They are so good, they rarely get caught.

28
Kleptomaniacs

• Commit 6-8 of shoplifting. Its a real
  psychological disease recognized by the APA. If
  you know a Klepto, you might receive lots of
  little gifts.

29
How should a business slow shoplifting?

• 1. Use devices and personnel, such as Mirrors,
  CCTV, Security guards and Point of Sale
  conduits.

30
2. Use Audible Messages

• Let shoplifters know that you may be watching
  them by announcing Security to the liquor
  department even if Security is not in the store.

31
3. Train Employees

• Teach your people what is typically stolen from
  the store and how they are stolen. Every business
  has a different set of circumstances.

32
4. Create your store layout and design with
deterrence in mind

• Place the most often stolen items near employees
  and the management. Lock-up high theft items
  such as liquor and cigarettes.

33
Before apprehension of a shoplifter, you must

1. See them do it.
2. Prove that they did not buy it.
3. Prove that it came from your store.
4. Prove that there was an intent to steal.

34
Most police departments will

• not come out to pick up a shoplifter, unless
  he/she has left the store. (To prove intent)

35
Never go out after a shoplifter

• Alone!