The rise in shoplifting has throttled consumer spending power. Whispers in the retailer’s ear of the criminal contagion echo loudly in every aisle as prices for once-inexpensive products creep higher. Theft deterrent devices fasten these everyday items into place, making them impossible to swipe or purchase without assistance.
Retailers’ discontent grows as their profits drain from product losses. SRG’s Burt Flickinger has chronicled the evolution of retail theft and its far-reaching economic impact. Flickinger and the SRG team offer retailers crucial insight to save profits, minimize product losses, and curtail the theft that is robbing both retailers and consumers. SRG’s experts collaborative work with legal firms create solutions and minimize losses, taking back the aisles for consumers. What is the solution to this retail theft epidemic? Learn more about the theft epidemic and find out how SRG can help.
Table of Contents:
The Retail Theft Epidemic |
Organized Retail Theft (ORT) |
Front Door Theft: How to Make Money Shoplifting |
Back Door Theft: Retail Employee Theft Leaves the Worst Damage |
Is Policing the Problem a Police Problem? |
A Dog in the Fight: Could a K9 Squad Mitigate Theft? |
Strategic Solutions: How Technology Plays a Vital Role Against Retail Theft |
Rising Costs: The Price of Retail Theft to the Consumer |
Retail Theft FAQs |
Key Takeaways:
As retail theft wreaks havoc on the financial bottom line of retailers, consumers grapple with rising costs related to both inflation and the theft epidemic. When shoplifting seeps into American culture, retailers now must fight back to stop the retail heist and gain control of their stores once again.
Shoplifting: The Theft of Spending Power and Products
Simple and inexpensive staples like mascara and more expensive technology like Apple AirPods hang securely on a metal bar behind a black device locked down with tethers fastened onto each stocked item. These devices are ever-present across American retailers because retail theft knows no geographic or socioeconomic boundaries. Shoplifting is every retailer’s problem.
In a report detailing recent survey data about loss prevention, the National Retail Federation revealed that the industry’s shrink rate increased to 1.6 percent—over the 1.4 percent the previous year, accounting for an additional $18.2 billion in retailer product losses. How did the industry reach this point, and how can stores successfully rein in the rise of retail theft and the incurring losses? Is one segment of thieves the dominant player in this retail heist? SRG has the answer for retailers who demand solutions.
Mitigating theft is an ongoing battle for retailers, but the enemy is not easy to identify. Three types of theft threaten the industry: front door theft, back door theft, and organized retail theft, which all mount losses against the retail industry. SRG experts help retailers fight back against shoplifters and organized retail crime by creating impactful solutions.
Swiping Left and Right: The Retail Theft Epidemic in America
Retail theft is not a new or unique problem. SRG’s Burt Flickinger weighed in with expertise about Walmart’s retail theft issue for Time and Bloomberg more than seven years ago. In an interview with Time, Flickinger noted that Walmart’s staff culling likely contributed to the increase in theft; less staff meant fewer eyes on customers and products.
Unfortunately, the issue has grown for retailers. Retail theft is quickly becoming an epidemic and a trend, and the uptick in swiped products is not simply an increase in one-time offenders trying to steal a few products. Instead, retail theft has evolved into a criminal industry, with gangs and other syndicates organizing their swiped hauls. Shoplifting has become a big business for criminals, and retailers feel the pain.
Organized Retail Theft
The days of stealing gum and a few small items are no longer the retail reality.
In mid-November, CBS News in Sacramento reported that authorities seized $350K in merchandise. In the Milwaukee suburbs, a duo of out-of-state women allegedly stole more than $15K of products from sprees in Sephora and the Mall of America.
While the news articles and data related to organized retail theft paint a sobering picture, Stephen Hoptay, former Captain of the New Jersey State Police, former VP of Asset Protection for Wakefern Food Corp, and current CEO of Squared Away Consultants, explained that focusing on one type of theft should not be a retailer’s key mitigation strategy.
“It’s more a process than just a plan. You need to embed yourself into business and learn the mindset, and learn as much about a facility or business as possible. Once you are embedded, you can better understand what the needs and wants are. Looking at it comprehensively from a distance,” Hoptay explained. “What is the community I’m surrounded by? What’s around me? Look at the store from the outside to the inside and properly assess options to consider.”
Front Door Theft: Who Is Lifting So Much Product?
In the minds of many consumers, front-door theft is a prime example of shoplifting. Front door theft in the retail industry denotes theft from consumers (or individuals entering the store’s ‘front door’).
Front door theft constitutes the average shoplifter. While the theft could be planned, stereotypical front door theft typically is not a gang-related or organized endeavor. Like organized thieves, front-door shoplifters could resell their stolen items on the resale market.
How can retailers deter novice thieves from swiping products? Hoptay recommends standard safety devices to lock down products. Again, many consumers see these anti-theft devices when they shop.
“Look at various anti-theft products and options that best meet the needs for that particular product and store,” Hoptay advises. “TALK with manufacturers and packages – the relationships with manufacturers, that is where it starts for anti-theft measures. It goes hand in hand.”
Front door theft is more common than many consumers fathom. CapitalOne reports that only 2% of shoplifters are apprehended for their crimes, and only 1% are arrested. The other 98% contribute to the rising retail costs of theft.
In 2016, both Time and Bloomberg zeroed in on Walmart’s high volume of retail theft incidents. Shoplifting became so problematic that Walmart ushered in new strategies for handling the rise in product loss. Time explored Walmart’s unique program to rehabilitate shoplifters called Restorative Justice; instead of prosecuting them, Walmart offered a course to educate shoplifters about the damage caused by the crime. The caveat? Shoplifters had to pay to take the course. Time reported that one company responsible for one of the programs was accused of falsely imprisoning offenders and was sued by the San Francisco City Attorney.
Back Door Theft: How Inside Theft Leaves the Worst Damage
Front door and organized theft are not the most devastating retail thefts. Back door theft has far-reaching consequences for a retailer, and it’s much more insidious in scope. Back-door theft refers to theft committed by employees or those with access to all areas of the store (including the back stockroom).
Back door theft is incredibly damaging because it violates trust. When an employee or a contractor commits theft, the crime is personal and far more devastating to the company. These thieves are often vetted by the stores, interviewed for their positions, and entrusted with an all-access pass to the property.
“It hurts more than pushing out a $400 basket of beef. When you entrust someone to work in the back of your store and help it operate, that doesn’t sit well,” Hoptay said about the impact of back door theft. “Those people should be dealt with more harshly than those pushing out the cart of meat. It comes down to trust in both directions…. I’d be more concerned about the back door and the message it is sending to the industry.”
Is Policing the Problem a Police Problem?
As incidents of retail theft rise and stores face mounting losses from stolen swiped products, new strategies to combat the losses take center stage. Some stores integrate police stations to ensure that potential thieves receive a very definitive message that shoplifting is a serious problem and a serious crime.
Is a police presence necessary? Should areas and stores targeted by shoplifters embrace a police hub within retail locations? The idea isn’t such a stretch, and a police presence could be the only solution for highlighting the severity of this problem.
“Walmart’s rise in retail theft surged when stores cut security and staff,” explains Burt Flickinger, SRG’s analyst. “Integrating police stations within retail locations sends a clear message to criminals. A visible police presence serves as a warning to those bold enough to attempt a retail theft heist.”
A Dog in the Fight: Could a K9 Squad Mitigate Theft?
Similar to a police presence in a retail store, K9 units are also another visible deterrent to those who walk into a retailer with the intent to shoplift. The conversation about retail theft no longer focuses on what retailers should do to mitigate theft. Now, retailers are willing to fight for their stores, their people, their products, and their profits. The war rages against potential thieves, and yes, retailers will have a dog in this fight. Quite literally.
“In some way, that might be an extreme measure, but we’re living in extreme times,” commented Flickinger. “Retailers are not willing to stand back and remain a silent victim. Every theft adds to mounting losses. Will consumers begin to see K9 units in retail stores? Absolutely.”
In fact, the dogs are already on the trail of potential shoplifters. The New York Post reported that New York City stores invite K9s to find thieves. City Group Security also discussed the role of K9s as a theft deterrent in a press release posted to The Professional Security Officer.
Strategic Solutions: How Technology Plays a Vital Role Against Retail Theft
Police hubs in stores, K9 units to sniff out thieves, and standard anti-theft devices all focus on visible reminders that the store is ever vigilant against shoplifting. In the tech-savvy 21st century, theft deterrents exist beyond what the eye can capture. Big Brother is watching, and technology is capturing thieves.
Facial recognition systems are controversial in some areas of the country. However, when properly utilized, these systems help stores and law enforcement identify and prosecute shoplifters.
“I have personally stated that this type of platform was the single biggest deterrent and prevented higher rates of recidivism,” noted Hoptay. “Facial recognition also provided an additional tool to law enforcement, in that if linked to broader law enforcement databases, identified ‘Amber and Silver Alert’ individuals, Be On Look Out (BOLO) postings, identified exploited and missing children, etc. The facial recognition tool, when properly used, brought law enforcement into a stronger relationship with store loss prevention/asset protection personnel.”
Social media monitoring is another means for retailers and law enforcement to identify possible organized retail theft planning and the individuals involved in a heist. It is not uncommon for criminals to plan openly via social media.
“We are in an age where a vast majority of people have some sort of social media presence,” Hoptay explained. “Developing a team that could monitor ‘open source’ social media platforms for indicators of nefarious activity taking place at a particular store or other segment of the retail environment could be beneficial.”
“Social media searches are also very important for employers who are undertaking a serious human resource matter/termination,” said Hoptay. “Many workplace violence actors had posted some sort of indicator/tendency on their social media platform of choice prior to committing the violent activity.”
Rising Costs: The Price of Retail Theft to the Consumer
The increase of retail theft creates a distorted new type of trickle-down economics. As losses mount for retailers, costs rise for the consumer. Ultimately, honest consumers pay the price for organized retail theft and shoplifting sprees.
The economy created a perfect storm for shoplifting. Theft feeds the cycle of rising costs, but inflation impacts the price of goods and services, too. When individuals feel the financial constraint of high prices and/or low wages (or unemployment), desperation leads to drastic choices. Some steal what they need. Others sell stolen goods on the secondary markets to make money. Hoptay explains that while gangs contribute to organized retail theft, the economy drives theft, too.
“The economy is forcing some people to do irrational things, but ORC (Organized retail crime) groups are feeding larger criminal enterprise networks, drug cartels, whatever it may be,” explained Hoptay. “The economy? Yes, it’s a factor. I think there are also systemic problems with the prosecutorial process. The systems are overwhelmed. Pure and simple. Until those programs get righted, we can’t move forward. We need prices that enable individuals to feed families at reasonable prices, and we need increased safety. Very few things in life are new and original – it’s just refining what we learned.”
Shoplifting FAQ
What item is most shoplifted from American stores?
The National Retail Federation reported that ORC offenders coveted clothing on their must-have list. Favorite clothing items include denim and designer apparel. In addition, ORC thieves also zeroed in on electronics.
What book is the most shoplifted?
What store has the most shoplifting?
What store has the lowest incidence of retail theft?
What state has the highest incidence of shoplifting?
What strategies do you believe would be most effective in curbing retail theft?
Increased use of technology
Implementing stronger security measures
Employee training and strict background checks
Collaboration with law enforcement agencies
Strategic Resource Group is the lead retail and brand CPG consulting firm throughout the United States and the globe. With more than three decades of experience, our team strategically collaborates with top retail chains, wholesalers, suppliers, and investment firms. Our retail industry experts are highly skilled at illuminating retail trends, identifying opportunities to increase consumption, and growing retail sales.
Stay in the loop with SRG’s insights and latest news reportings as Burt Flickinger makes special appearances on the radio, TV, and a vast amount of other platforms. Explore the ways to drive your profitability, discover top resources, and uncover your competitive advantages!
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