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SECURITY: Stopping the Shrink

You've stocked your store and opened the doors, now how do you prevent shoplifters from getting the best of your merchandise?

The traditional loss-prevention methods - security guards, in-store detectives, closed-circuit television (CCTV) and electronic article surveillance (EAS) - work well in keeping sticky fingers from stealing the profits, according to Frank Napfel, founder and president of Castle Security Group, Baltimore.

But with mall owners trying to avoid getting involved, ultimately, the best defense against shoplifting is customer service.

The Best Customer Service "To the degree it is possible, you should adequately staff your stores and train employees to be proactive in their encounters with customers," Napfel says. "Because the last thing shoplifters want is someone who pays attention to them. Good customer service makes it more difficult to switch price tags and hide articles, and for a potential shoplifter, it creates an environment of apprehension."

Walter Palmer, a partner with Contact Inc., a Charlotte, N.C.-based consulting firm focused on the loss prevention industry, agrees. "Some environments have moved to more self-service," he says, "but there's a great deal of validity that higher customer service levels lower shoplifting. It provides a mental barrier."

Beyond that, several tools can be used to deter criminals.

In Plain View CCTV - either open for the customer to see as well as hidden - is gaining in popularity nowadays for several reasons. When a video screen is placed right over the doorway, it can be used as a shoplifting deterrent. To monitor employees and possible internal theft, CCTV cameras also can be placed near the vault, cash areas, employee hallways and back doors. In public areas such as mall corridors and parking lots, CCTV can monitor traffic and give customers the perception of a safer environment.

"I recommend the use of CCTV with both hidden and open cameras because it's very effective, particularly if the films are used to train staff and salespeople, as well as security people," Napfel says. "The tapes can be helpful in profiling who the typical offender is and give employees a sense of how shoplifters operate.

"Tapes can be crucial to training success," he continues. "If you watch 50 thefts, you can see how a shoplifter operates, what they do before and after the crime, and how a store should handle the situation. There's nothing better than watching a theft take place."

Shopping center retailers should not worry too much about offending customers with CCTV cameras. "A lot of people are aware of CCTV, and even the public is more accepting of the technology, whereas a few years ago, they were concerned about an invasion of privacy," says Lisa Ciappetta, product sales support manager for Sensormatic in Boca Raton, Fla. And better yet, CCTV camera technology recently has improved, making the systems even more useful in today's retail environment.

"Today, the job market and budgets are tight, so CCTV has to do a lot on its own," Ciappetta says. For example, Sensormatic's partnership with allows retailers to control their CCTV remotely over the Internet. The company's Intellex digital video recording and display system can be integrated with motion detection equipment so that lights can be turned on and off if a camera detects motion in the store.

"Now, cameras have to be smart," Ciappetta says. For example, dome cameras now can be controlled to zoom in and out so that a detective can scan across a parking lot and then focus on a license plate, or so that a detective can read a bill denomination to determine whether it's counterfeit.

Data also can be better managed and recorded with today's equipment. "This makes rewinding video less cumbersome," she adds.

To improve a CCTV system, Ciappetta recommends shopping centers take advantage of color cameras and monitors. "Color is coming down in price," she says, noting that this is an important and now more affordable tool. "Color can help identify a person - whether a shoplifter has blond or brown hair."

Canadian Tire, Canada's largest hardgoods retailer, recently installed a chain-wide CCTV system to improve its loss-prevention strategy. For more than two years, the company has been using a source tagging program in which more than 3,000 SKUs are embedded with electronic tags. According to Canadian Tire, CCTV will be used in a variety of store configurations to prevent loss and better manage the company's supply chain.

"With an RF (radio frequency) EAS program already in place, we can continue to provide value by reducing losses at Canadian Tire with closed-circuit television solutions," says Kevin Dowd, president and CEO of Checkpoint Systems Inc., the Thorofare, N.J.-based company supplying the system.

From Stores to Source Tags Perhaps the biggest trend in loss prevention today is EAS, which can be used by department stores, mass merchants and specialty retail stores. EAS is a system of hard or soft tags, labels, detectors, detachers and deactivators that work together to protect retail merchandise from theft.

Recently, there has been a movement toward source tagging, where anti-shoplifting labels are inserted within the merchandise during manufacturing or packaging so retailers no longer need to provide the labor to tag merchandise, according to Contact Inc.'s Palmer.

"Source tagging really has taken off in hardgoods such as hardware," says Mary Martin, softgoods manager for Sensormatic. "An expensive drill is something that can be tagged quickly and the manufacturer can see a benefit to it. We're just beginning to see source tagging on the softgoods side. This is because apparel does not come in a box very often."

Typically, retailers who already have the EAS pedestals contact their vendors or distributors and ask them to source tag their merchandise, Martin says. The music industry seems to have embraced this method to prevent CDs from being stolen.

According to Martin, in 1999, 2,500 manufacturers were working with Sensormatic to source tag 1 billion items. In 1998, the number of source tagged items was 650 million.

"The number of products source tagged has increased at least 50% every year for the past three years," she says. And as more manufacturers source tag their products, EAS will become more prevalent, Palmer says.

Partnering with Mall Management With many loss prevention options to choose from, retailers generally should figure out what type of theft they want to protect themselves against - employee, mismarked items, shoplifting, etc. - then create a loss-prevention strategy. Beyond that, store owners should work within their legal guidelines and with their mall management.

"Almost every state has a legal precedent and method - a merchant's detention statute - for handling shoplifting," Palmer says. "But if individual retailers and mall security have a good relationship, then they can figure out what to do in tricky situations."

"Generally speaking, preventing shoplifting is a responsibility that rests with the individual retailer," says Jonathan Luscher, vice president of IPC International, a Bannockburn, Ill.-based company that provides security to shopping centers. "The center's job is to provide an environment that generally is safe from crime carries over to the stores in the center."

On occasion, Luscher says, mall security gets involved by banning an offender from the mall, but the level of involvement depends on the mall management and the situation.

Tom Walton, vice president of operations for Valor Security Services in Marietta, Ga., agrees. "From the property management side, security action will be limited," he says.

"It is the policy of most shopping center owners and managers that security not arrest or detain alleged offenders of crimes not witnessed by the security officers themselves. A serious liability may exist if the security intervenes and the alleged offender is found not guilty of the crime, or worse, not prosecuted at all."

On the other hand, store owners may be very concerned about calling on mall security based on a suspicion because of the liability they may bring on themselves, Palmer says.

Thus, "mall security and the merchants need to maintain a positive relationship and communicate when a crime has been committed and when a potential threat exists that may threaten other merchants," Walton says. "Additionally, mall security may coordinate merchant safety meetings to share information regarding trends that may be impacting the center and its merchants."

Obviously, some malls have an active partnership with their retailers and are very supportive; others are not, Palmer says. "But if you have a dialogue, you can do a lot with the partnership."

The typical shoplifter profile depends on the store and its location, which is difficult to predict, says Frank Napfel, founder and president of Castle Security Group, Baltimore. "Typical offenders may be in their teens to their late 70s," he says.

Consequently, Napfel recommends store owners view their CCTV tapes to identify patterns in their specific retail environment. Simplifying the process, to determine who's shoplifting in your stores, Palmer suggests retailers envision their average customer.

"Some people say juveniles represent a higher basket of the total shoplifting cases, but beyond that, the average customer coming into your store probably is the average shoplifter," he says. "The typical shoplifter at a home center business probably is a male in his 30s to 40s because that's who frequents the store the most."

To prevent shoplifting, industry experts suggest retailers:

* Provide good customer service;

* Have a written shoplifting policy so that employees are knowledgable about the store's legal requirements;

* Merchandise product properly so that high-value items are not hidden from the sales floor, and so that employees have as many clear sight lines as possible;

* Maintain a visual observation of the shoplifter the entire time they are in your store;

* Don't put yourself in danger over an item; and

* Prosecute an offender, when there is conclusive evidence, to the full extent of the law.

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