Where’s The Beef?

Where’s The Beef? Stolen, According to CBS News

Asset Protection (AP) and Loss Prevention (LP) professionals in the grocery vertical would not be too surprised to learn that meat, beef in particular, is one of the most stolen items in supermarkets today. But AP and LP professionals in other retail segments are likely baffled at this statistic. After all, concealing large quantities of meat is not an easy feat when one considers how fragility of the packaging.

Meat in the World of ORC

It may also be shocking to some that meat has been a favored target of professional boosters. Unlike the black market paths that ORC products typically follow (booster to fence, fence to repack operation), meat takes its own journey down the seemingly endless thievery trails. With meat theft, the meat is stolen in large quantities and immediately sold to independently owned markets, bars and restaurants. To add color to this, consider the recently reported theft case in Memphis, TN. In that case, Mekoe Suggs was charged with allegedly stealing between $60,000 and $250,000 worth of meat from his employer. The investigation was initiated after $90,000 of meat was discovered missing after an inventory cycle.* Although no information was provided that explained exactly what Suggs allegedly did with all of that stolen product, it is highly unlikely for it not to have been illegally distributed to area businesses for resale.

With beef prices climbing more than 26% just in the last 5 years with no end in sight, buying stolen meat has become the only saving grace for some small, neighborhood grills. In addition to large scale professional thefts, it has been reported that even amateur theft is on the rise. Amateur theft, by definition, is the theft of merchandise for personal consumption. With the high costs of beef, some have turned to theft to help feed their respective families.

Armed with this knowledge, the best and the brightest are looking for solutions to stop the bleeding, and with the food industry’s well known razor-thin margins, preventing meat theft has never been a more urgent task.

EAS Protection

Continuing down the line of surprising information, some may be interested to learn that Electronic Article Surveillance (EAS) technology has made its way to meat theft protection. This may be difficult to imagine since the first image that comes to an AP or LP professional’s mind during an EAS discussion is a standard hard tag with a pin backing. But when dealing with solutions providers who are truly engrained within the AP and LP industry, technological solutions are timely.

nedap meat label mock image for email.png

The Nedap Advantage

Nedap Retail is one of those solutions providers deeply engrained in both the art and science of protecting assets. And with their superior technological background, meat theft prevention has been one of their most successful accomplishments.

Chilled and frozen products such as meat, fish and cheese are bestsellers in food retail, but as discussed, they are also extremely popular with shoplifters. Therefore, Nedap offers special labelling solutions to help food retailers protect these targeted products from being stolen.

When securing chilled and frozen products, it is essential to choose an EAS label that is fit for the environmental influences. To ensure the best performance, it is not only relevant to consider the actual product and the packaging, but also where the label is applied and under which conditions. Key factors to determine which EAS label to use on chilled or frozen products are:

  • Product
  • Packaging
  • Temperature
  • Humidity
  • Label application (In-store vs. At-source)
  • Shelf life / expiration date

Depending on these factors, Nedap offers different types of adhesive and different top layers to make sure that the EAS label performs at its best. The labels are designed to withstand cold and moist conditions over longer periods of time and can be applied close to the actual product without the risk of detuning or detaching, which is a main concern with Nedap Retail’s competitors’ products. Options include:

  • Labels for deep frozen products
  • Waterproof labels for chilled products
  • Paper labels for chilled products
  • Auto-apply labels

The auto-apply label is applied at source during the packaging phase. These are especially designed for automatic application and can be “sandwiched” between the brand/product label and the packaging.

Label Deactivation & Detection

Key factors to consider when determining label quality are how well they can be deactivated and how well they can be detected by the EAS antennas. In fact, the effectiveness of each EAS solution is determined by the quality of the three key elements:

  • The label on the product
  • The deactivator at the POS
  • The EAS antenna at the checkout or the store exit

If any of these elements are not performing well, the effectiveness of the EAS system is significantly lowered, as there is a high risk that there may be no alarms or false alarms.

For more information about Nedap Retail’s meat protection solutions, click here. To discuss how you can give your products the best protection or take a look at Nedap’s complete label and tag portfolio and other loss prevention solutions, click here.

About Nedap Retail

Nedap’s retail loss prevention products include electronic article surveillance, RF EAS systems, RFID EAS systems, Customer-Counting, and Retail Store Access Control systems.  Nedap’s retail solutions are based on intelligent identification and registration of people, animals and objects, or on innovative, ‘green’ electronic controls and power supplies. Innovation is driven by clients’ operations: systems are developed and adapted to optimize clients’ production and information processes.

Nedap brings 40 years of global experience, market expertise and close cooperation with leading retailers. Everything Nedap Retail does is driven by their mission to make it simple for retailers to always have the right products available. To achieve this, Nedap Retail offers industry-leading solutions for their customers’ diverse needs in loss prevention and stock management. For more information, visit Nedap Retail’s website: http://www.nedapretail-americas.com/.

Sources:

– http://www.nedap-retail.com/solutions/source_tagging/tags_en_labels/labels/meat_fish_and_cheese.aspx

– http://www.wmcactionnews5.com/story/33660083/man-charged-in-elaborate-meat-theft-ring

– http://time.com/money/4099524/meat-beef-prices-stealing-theft/

50 Tweetable 2015 Loss Prevention Statistics

I love data! I like to measure, analyze and report on progress made, challenges mastered and new opportunities pursued. In the loss prevention and retail field, a lot of professionals share this love of data with me — for an excellent reason. It makes us more confident in the decisions we make; it makes us sound smart, and it allows us to provide tangible proof to an argument.

Because we love data so much, we put together a list of 50 statistics and data points that all center on loss prevention, shrinkage, and the retail industry.

To make sharing a lot easier, we also made them tweetable. To tweet a statistic, simply click on the Twitter icon and a new window will pop up — ready with the tweet — just click tweet and it will post the update to your Twitter account.

To keep this page handy, we recommend bookmarking it and feel free to refer to it in any blog posts you write. 

General Loss Prevention Statistics:

  • In 2014, American retailers lost $44 billion in potential sales due to shrinkage. (Source: NRF Retail StudyTweet: American retailers lost $44bn in sales due to shrinkage in 2014 #retail http://ctt.ec/2e0eQ+
  • #Shoplifting is #1 cause of shrinkage (37%) for US retailers in 2014. (Source: NRF Retail StudyTweet: #Shoplifting is #1 cause of shrinkage (37%) for US retailers in 2014. http://ctt.ec/4T5_k+
  • Employee theft contributed 34.5% to $44bn lost #retail sales in 2014. (Source: NRF Retail StudyTweet: Employee theft contributed 34.5% to $44bn lost #retail sales in 2014. http://ctt.ec/fx34I+
  • Admin errors (16.5%) and vendor fraud (6.8%) contribute to $44bn shrinkage problem. (Source: NRF Retail StudyTweet: Admin errors (16.5%), vendor fraud (6.8%) contribute to $44bn shrinkage http://ctt.ec/33R7z+
  • Retailers lost about 1.38% of retail sales to shrinkage. (Source: NRF Retail StudyTweet: Retailers lost about 1.38% of retail sales to shrinkage #lossprevention http://ctt.ec/Rpcr3+
  • Technology matters. Shrinkage % down in US for 1st time in 24 years. (Source: NRF Retail StudyTweet: Technology matters. Shrinkage % down in US for 1st time in 24 years. http://ctt.ec/ULwdd+
  • Shrinkage costs US shoppers about $300 per household every year! #lossprevention Tweet: Shrinkage costs US shoppers $300 per household every year! #lossprevention http://ctt.ec/85u6g+
  • 1 out of 11 Americans (approximately 27 million) shoplift. (Source: NASP)  Tweet: 1 out of 11 Americans (approx. 27 million people) shoplift. #retail http://ctt.ec/3eJ93+
  • More than 10 million people have been caught shoplifting in the last five years. (Source: NASPTweet: +10mn. people have been caught #shoplifting in the last 5 years. http://ctt.ec/5foYc+

Data To Effectiveness Of Loss Prevention:

  • Only 60% of EAS pedestals were able to read products with a soft tag inside (Source: Hayes and Blackwood Study) Tweet: Study: Only 60% of #EAS pedestals read products with a soft tag inside. http://ctt.ec/9fx3J+
  • In 91% of stores visited, there was no form of acknowledgment by any person in the store when an alarm was activated. (Source: Hayes and Blackwood Study) Tweet: Study: In 91% of #retail stores, there was no reaction after EAS alarm! http://ctt.ec/05F2b+
  • Only 5% of staff responses to a #lossprevention alarm is “meaningful” e.g., checking the receipt or identifying the product that triggered the alarm. (Source: Hayes and Blackwood Study) Tweet: Only 5% of staff responses to a #lossprevention alarm is “meaningful” http://ctt.ec/SX4ba+

Loss Prevention Budget Statistics:

  • #Lossprevention budgets represented less than 1% of overall 2014 sales. (Source: NRF Retail StudyTweet: #Lossprevention budgets represented less than 1% of overall 2014 sales. http://ctt.ec/W1gJI+
  • 39.4% of retailers increased their #loss prevention budget for 2015 (Source: NRF Retail StudyTweet: 39.4% of retailers increased their #loss prevention budget for 2015 http://ctt.ec/4XYe1+
  • Over one third (36.6%) of US retailers keep #lossprevention budgets the same in 2015. (Source: NRF Retail StudyTweet: 36.6% of US retailers keep #lossprevention budgets the same in 2015. http://ctt.ec/H_fiW+
  • 23.9% of retailers in the US decreased #lossprevention resources.(Source: NRF Retail StudyTweet: 23.9% of retailers in the US decreased #lossprevention resources. http://ctt.ec/lfM9b+
  • Specialty apparel retailers spent an average of 0.63% of sales on loss prevention measures (Source: NRF Retail StudyTweet: Specialty apparel retailers spend 0.63% of sales on #lossprevention http://ctt.ec/tyUBd+
  • US grocery stores allocate only 0.36% of sales to reducing shrinkage. (Source: NRF Retail StudyTweet: US #grocery stores allocate only 0.36% of sales to reducing shrinkage. http://ctt.ec/mB6dx+

Employee Theft & Organization-Wide Measures To Prevent Shrinkage:

  • 75% of employees steal at least once. (Source: U.S. Chamber of Commerce) Tweet: 75% of employees steal at least once. http://ctt.ec/7c9ME+ #retail #lossprevention
  • US retail employees are responsible for 39% of inventory losses. (Source: Global Theft Barometer) Tweet: US #retail employees are responsible for 39% of #inventory losses. http://ctt.ec/Hayf4+
  • Worldwide, the rate of employee theft of overall shrinkage is 28%. (Source: Global Theft Barometer) Tweet: Worldwide, the rate of employee theft of overall shrinkage is 28%. http://ctt.ec/XucR3+
  • 89% of retailers conduct criminal conviction checks pre-hiring. (Source: NRF Retail Study) Tweet: 89% of #retail stores conduct criminal conviction checks pre-hiring. http://ctt.ec/PG7a9+
  • 86% of retailers conduct multiple interviews before hiring a new worker. (Source: NRF Retail Study) Tweet: 86% of retailers conduct multiple interviews before hiring a new worker http://ctt.ec/7IcVs+
  • 73% verify employment history of potential employees before hiring. (Source: NRF Retail Study) Tweet: 73% of retailers verify employment history of potential employees. http://ctt.ec/RdvT3+

Industry Specific Loss Prevention Statistics:

  • Meat, next to alcohol, is one of the higher-priced items in any grocery store — Purloined Sirloin being the hottest item. Tweet: Meat remains the most attractive category for shrinkage. #retailhttp://blog.nedapretail-americas.com/2015-loss-prevention-statistics
  • Men’s and women’s specialty apparel stores and supermarkets are pre-employment screening leaders, with 92% checking criminal convictions and 83% verifying past employment. (Source: NRF Retail StudyTweet: Specialty apparel stores / supermarkets do most pre-hiring screening. http://ctt.ec/7bfcL+
  • Grocery stores and supermarkets reported 100% criminal background checks (Source: NRF Retail StudyTweet: Grocery stores, supermarkets reported 100% criminal background checks http://ctt.ec/NV68e+
  • 83% of retail stores test for drugs prior to employment. (Source: NRF Retail StudyTweet: 83% of grocery stores test for drugs prior to employment.  #retail http://ctt.ec/mgDyU+

General Retail Statistics

  • 98.6% of all retail businesses have less than 50 employees. (Source: NRF Retail Impact Study)  Tweet: 98.6% of all #retail businesses have less than 50 employees. http://ctt.ec/oFdZK+
  • Nearly all purchases (90%) happen in a physical store. (Source: A.T. Kearney) Tweet: Nearly all purchases (90%) happen in a physical store. #retail http://ctt.ec/hn15C+
  • 28% of shoppers enjoy seeing what other customers have purchased. (Source: UPS Report) Tweet: 28% of shoppers enjoy seeing what other customers have purchased. http://ctt.ec/TZobG+
  • 30% of buyers appreciate seeing on-screen recommendations based on their listed preferences.  (Source: UPS Report) Tweet: 30% of buyers want on-screen recommendations based on preferences. http://ctt.ec/Eb06s+

Age & Gender Differences In Shoplifting:

  • Men and women shoplift about equally as often – but for different reasons. (Source: NASP)  Tweet: Men and women shoplift equally as often - but for different reasons. http://ctt.ec/fIEx2+
  • Approximately 25% of shoplifters are kids, 75% are adults. (Source: NASPTweet: Approximately 25% of shoplifters are kids, 75% are adults. http://ctt.ec/NUKC3+
  • 55% of adult shoplifters say they started shoplifting in their teens. (Source: NASPTweet: 55% of adult shoplifters say they started #shoplifting in their teens. http://ctt.ec/_EKB8+
  • Many shoplifters buy and steal merchandise in the same visit. (Source: NASPTweet: Many shoplifters buy and steal merchandise in the same visit. #retail http://ctt.ec/b92xy+
  • Shoplifters commonly steal from $2 to $200 per incident depending upon the type of store and item(s) chosen. (Source: NASPTweet: Shoplifters commonly steal from $2 to $200 per incident. #shoplifting http://ctt.ec/m0777+
  • Shoplifting is often not a premeditated crime. 73% of adult and 72% of juvenile shoplifters don’t plan to steal in advance. (Source: NASPTweet: Almost 3/4 of shoplifters don’t plan to steal in advance. #shoplifting http://ctt.ec/56LfY+
  • 89% of kids say they know other kids who shoplift. 66% say they hang out with those kids. (Source: NASPTweet: 89% of kids say they know other kids who shoplift. http://ctt.ec/5Q3zB+

Organized Retail Crime:

  • 3% of shoplifters are “professionals” who steal solely for resale or profit as a business. (Source: NASPTweet: 3% of shoplifters are “professionals” stealing for resale or profit. http://ctt.ec/EfbZ4+
  • “Professional” shoplifters are responsible for 10% of the total dollar losses. (Source: NASPTweet: “Professional” shoplifters are responsible for 10% of the total dollar losses. http://ctt.ec/Udrs1+
  • 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. (Source: NASPTweet: Most shoplifters steal as a response to social or personal pressures. http://ctt.ec/8vlUy+
  • Shoplifters say they are caught an average of only once in every 48 times they steal. (Source: NASPTweet: Shoplifters say they are caught only once in every 48 times they steal. http://ctt.ec/sf5LA+
  • They are turned over to the police 50% of the time. (Source: NASPTweet: Shoplifters are turned over to the police 50% of the time. #retail http://ctt.ec/8J77_+

The Hard-To-Break Habit Of Shoplifting

  • 57% of adults say it is hard for them to stop shoplifting. (Source: NASP)  Tweet: 57% of adults say it is hard for them to stop #shoplifting http://ctt.ec/rD6Lq+
  • 33% of juveniles cannot stop #shoplifting after getting caught. (Source: NASPTweet: 33% of juveniles cannot stop #shoplifting after getting caught. #retail http://ctt.ec/_B02z+
  • Most non-professional shoplifters don’t commit other types of crimes. (Source: NASPTweet: Most non-professional shoplifters don’t commit other types of crimes. http://ctt.ec/fTLIu+
  • Habitual shoplifters steal an average of 1.6 times per week. (Source: NASPTweet: Habitual shoplifters steal an average of 1.6 times per week. #retail http://ctt.ec/culCY+
  • Many shoplifters steal for the incredible “rush” or “high” feeling of “getting away with it”. (Source: NASPTweet: Many shoplifters steal for the rush / feeling of getting away with it. http://ctt.ec/UbS6v+
  • Drug addicts, who have become addicted to shoplifting, describe shoplifting as equally addicting as drugs. (Source: NASPTweet: Drug addicts describe #shoplifting as equally addicting as drugs. http://ctt.ec/223Gt+

Have you come across a loss prevention or retail statistics you would like to add? Please share them with us in the comment section bel

Shoplifting: Why and How Men And Women Steal Differently

Shoplifting is a problem for retailers across the board, whether they sell high-priced luxury items or deeply discounted merchandise.

However, in contrast to organized retail crime, people do not generally consider themselves as criminals if they taste a few grapes in the supermarket, pocket a small item while paying for others, or take food they can’t afford to buy. In other words, usually honest people simply don’t think it’s a big deal to shortchange the cashier upon checking out. But it is.

Even small offenses have a big impact. Stealing increases the prices for paying customers in order to cover the losses, takes money that could be spent on higher wages for employees, and creates an atmosphere of mistrust between customers and shop employees.

The means and methods of stealing are as varied as the number of thieves, but a few generalities apply.

An interesting aspect to consider when implementing your loss prevention program is the differences between male and female shoplifters.

Men Steal To Provide For Their Family

Male shoplifters are driven by age-old stereotypes that say they must provide for the family. Embarrassed about not being able to afford something, they simply take it. When caught, they justify the theft by saying they do whatever it takes to provide, that their family needs to eat, or that their wife and children spent the money they worked so hard for. It’s notable that when men steal, they nearly always explain that their family — rather than they — needed something.

How Men Usually Steal

Men tend to either hide an item under their coat or simply walk out the door with it as if nothing was out of the ordinary. Pride allows them to justify their actions: they think that because the staff didn’t stop them, they aren’t really stealing.

Women Steal To Provide Comfort

Women, however, steal to provide for their family at a level beyond their means. In other words, they shoplift to provide comfort that would otherwise be unaffordable.

They tend to shoplift as a way of saving money. They might switch price labels or use tricks to get discounts in order to ‘treat’ their husband and children to items otherwise outside their budget. Women justify stealing personal items such as cosmetics by saying they don’t spend money on themselves but only on their family.

How women usually steal

Typically, women aren’t as bold as men in their methods. They are more likely to resort to tricking rather than outright shoplifting and justify the theft by not outright stealing, but by paying a reduced price. When shopping, they may hide a few items in their purse (e.g. a fancy cut of meat) and continue through the check-out to pay for the bulk of their purchase.

Conclusion

The issue with a little five-finger discount is that women and men alike feel it is no big deal to steal. Retailers need to continue to educate the public of the consequences of shoplifting, as well as invest in modern loss prevention systems to deter thieves before they can strike.

However, knowing the motives behind the shoplifting can help drive these educational programs and helps your loss prevention staff to tackle each offender in a more educated and rather proactive manner. In addition, it will help to know what suspicious behaviors to look out for in the future.

Lessons To Be Learned From The NRF Retail Security Survey

A few weeks ago, the National Retail Federation published its 24th annual National Retail Security Survey in conjunction with its annual NRF PROTECT conference — estimating that American retailers lost $44 billion in 2014 due to shoplifting, fraudulent activities, and other shrinkage causes.

The study is the result of NRF’s strategic partnership with Dr. Richard Hollinger of the University of Florida. One hundred senior loss prevention executives from various sectors in retail were interviewed to uncover various findings to inventory shrink, employee integrity, external retail crime and more.

Lesson 1: Loss Prevention Technology Matters

Shrinkage is an enormous problem — a $44 billion problem to be exact.

Click here to tweet: Shrinkage costs US shoppers about $300 per household every year! #lossprevention

Tweet: Shrinkage costs US shoppers $300 per household every year! #lossprevention http://ctt.ec/5EJ0c+

Although there is some good news, this only represents 1.38% of retail sales — the lowest percentage in the survey’s history! This means that retail sales are growing faster than the shrinkage.

One reason for this is the availability and the implementation of sophisticated loss prevention technologies. It is safe to say that retailers who are utilizing the latest loss prevention technologies available to them are the ones seeing the results. Technology does matter.

Click here to tweet: Technology matters. Shrinkage % down in US for 1st time in 24 years. 

Tweet: Technology matters. Shrinkage % down in US for 1st time in 24 years. http://ctt.ec/cdvrz+

 

Lesson 2: Employee Theft Is Not Dealt With Effectively

According to the study, the losses in 2014 break down into the following categories:

  • Shoplifting (37%)
  • Employee/internal theft (34.5%)
  • Administrative and paperwork errors (16.5%)
  • Vendor fraud or error (6.8%)
  • Unknown loss (6.1%)

ShrinkagePercent

While external shoplifting is still the main cause of shrinkage, employee theft is a very close second!

However, internal fraud and even outright stealing is a very touchy topic among employers. Without sufficient evidence, addressing sweethearting or other criminal activities by employees is difficult — if not impossible.

Retailers need to find the cause of employee theft in their stores and then search for ways to eliminate these. This might be a more controlled POS environment, securing backrooms with remote access control systems or by using RFID to account for all products at any point in time.

Lesson 3: Loss Prevention Budgets Are Going Up

The third lesson is that retail executives realize the importance of reducing shrink and invest accordingly. According to the study, 39.4% of those surveyed say their budget for 2015 increased over last year; just over one-third (36.6%) said their budgets would be similar to what they were last year — leaving 23.9% of respondents with decreased resources.

However, no matter how big your budget is, your funds have to be spent wisely. With the complexities and demands on store operations and security personnel increasing, retailers have to choose very carefully which solutions to implement.

For loss prevention professionals, it is important to select solutions that provide a lower total cost of ownership to the organization. By choosing technology with an open architecture, it allows for the integration into other systems with the purpose of generating valuable and actionable intelligence.

What did you learn?

Did you have a chance to read the NRF Retail Security Survey? What were your key takeaways? We would love to hear them – just sound off in the comments below.

Back-To-School: What That Means For Your Loss Prevention

“Back to School” means big business for any retailer from electronics to office supplies as well as shoes, backpacks and apparel. The average family with school-aged children is planning to spend $630.36 on electronics, apparel and other school needs this year, according to NRF’s Back-to-School Spending Surveyconducted by Prosper Insights & Analytics. For families with college kids, this number is even higher.

So, inventory is high, the crowds are large and the opportunity for thieves even bigger.  Some even call the months of July, August, and September the “super shoplift season.”

With school starting anywhere from the middle of August to mid-September, businesses are busy running special sales. While last year most back-to-school shoppers took more time to prepare, the survey indicates that this year 37% of the back-to-college shoppers are planning to procrastinate until 3-4 weeks before school start this year. Families with school-age children are waiting even longer to buy supplies. This means more customers in the store at the same time.

However, whenever there are significant sales and many customers, there are also many opportunities for shoplifting and employee theft. Here are some actionable tips how you can prepare your business from a loss prevention standpoint:

Seize Every Opportunity To Remind Employees Of Your Shoplifting Policies

Schedule store-wide or departmental meetings before the rush begins to remind every single employee of your policy towards shoplifting. If you don’t have a policy regulating how each member of your organization should conduct themselves when facing a shoplifting or fraud situation, you should develop one as quickly as possible.

It should outline who is authorized to approach suspected thieves, what the protocol is for your security guards, and how you will deal with employee theft and sweethearting. If you have an EAS systems in place that does not automatically monitor its status, include a daily testing protocol as well.

Walmart_BackToSchoolSale

Consider Increasing Your Tagging Levels

Most retailers that are using RF-based EAS solutions have a low tagging level of 20-40% of their high-value and most likely-to-be-stolen merchandise. However, by increasing the number of products that have a security label on them will help deter thieves as well as make your store overall more safe.

Getting Back On Track After Summer Vacations

Summer is vacation time and for many that means planning trips with their families, visiting friends or just getting out of the daily grind and onto some warm sandy beaches. But this also means, that the week before and after the vacation, employees are distracted with their preparations or having a hard time finding their rhythm again. And, while this is natural, it helps to be aware of it and plan around it. The Loss Prevention Foundation suggests having a simple, direct and goal-oriented summer plan in place.

Use Back-To-School As A Test Phase For The Holiday Season

Once the “Back To School” event is behind you, you will be gearing up for the busy holiday season! You can use this smaller-scale craziness as a test-run for your upcoming months. Keep a log of activities and their successes and outcomes and analyze what measures bore fruit and which need improvements. This way you are better prepared once November hits.

What Is Your Back-To-School Strategy?

Have you found a way to fight shoplifting in this busy time that was particularly successful? Or maybe you have tried something that did not go as planned? Please share with us and your peers below – we would love to continue the discussion.

5 Common Pitfalls That Could Thaw Your Loss Prevention Efforts

Any loss prevention or store operations manager knows that loss prevention is the result, not the effort.

Ultimately, the only thing that counts at the end of the day is how much shrinkage you can prevent by employing the latest technology, devising the best training and hiring the most diligent employees.

However, even in the best scenarios there are factors that hinder your loss prevention efforts and encourage shrinkage. Below are the most common ones:

Lack Of A Comprehensive Loss Prevention Strategy

The first and probably the most important reason loss prevention efforts fail is a lack of a comprehensive loss prevention strategy that ties into the overarching business goals of the organization.

A study by Robert S. Kaplan and David P. Norton for the Harvard Business School entitled “The Strategy-Focused Organization” found that “a mere 7% of employees today fully understand their company’s business strategies and what’s expected of them in order to help achieve company goals.”

The overall goal of most retailers is to profitably sell products that were manufactured by a third party to maximize shareholder value — whereas the task of loss prevention managers is to help the organization sell more by losing less.

If a loss prevention strategy only focuses on preventing shoplifting, you are ignoring the other pieces of the puzzle such as securing the employee and back entrances, scanning incoming inventory to prevent vendor fraud, tracking each item individually to minimize administrative errors and making the store more secure for employees as well as visitors.

Shrinkage prevention is an organization-wide problem and has to be tackled on a corporate level. Every single employee must be informed, aware and educated on the causes and consequences of shrinkage — this will not only lower employee theft but also make the entire team more alert.

Loss Prevention In A Vaccum

Hand in hand with incorporating loss prevention into the overarching business strategy is the integration of loss prevention systems into existing business applications.

Traditional RF- or AM-based electronic article surveillance (EAS) systems are not integrated with other systems because they are electronic-based and not software-driven. This lack of integration not only isolates the company’s loss prevention efforts from other processes within the organization, but it inhibits the retailer to build a network of reinforcing systems that work together.

With mega-trends such as omni-channel, globalization, big data and the Internet of Things shaping the retail landscape, IT and other business departments need to work closer and align better with loss prevention.

However, the recently released study The Great Disconnect Between LP and IT finds that there are huge discrepancies between IT and loss prevention – however executives’ priorities do not align with these realities. For example, on average, the revenue lost per case of employee theft is up to six times larger than what shoplifters help themselves to (according to the 2015 Retail Theft Survey), but tackling internal theft is deprioritised compared to other priorities.

Loss_Prevention_is_the_1

At the moment, only 8.3% of the IT budget (not including Payment Card Industry (PCI) Data Security Standards and data breach protection efforts) is dedicated to loss prevention efforts. One reason for this low number is simply that other business priorities are taking precedence. The other reason that loss prevention receives so little attention from IT is because electronic systems are not IT-enabled and cannot be integrated into other business applications. In fact, IT personnel, as well as LP professionals name system integration as one of the biggest hurdles in building a closer relationship.

With an increasing number of solutions including open API’s, internet connectivity and the ability to integrate with business applications, this will change over the next couple of years.

Demotivated Employees

The third reason why loss prevention fails is demotivated employees. Retail thrives and fails with the quality and retention of its employees that it hires.

Theft from employees and their lack of motivation to follow up on alarm situations is very high. This is especially true in the United States, where the average retail employee earns on average $7.65 – $14.10 according to PayScale — compared to for example $17.42 in Germany. In addition, American stores have a high employee turnover rate of 67 percent. Both of these factors result in decreased motivation and loyalty towards the employer which is reflected in high shrinkage.

If a customer walks into your shop and they get approached almost immediately and helped, there is less opportunity to browse the merchandise, inspect security tags and slip items into aluminum foil-lined bags. In contrast, if your personnel is busy exchanging the latest gossip, filing nails or playing games on their phone, there is more opportunity for theft.

Lastly, if your front line workers don’t pursue a visitor that set off an alarm because they could not bother or are too embarrassed, your loss prevention efforts are futile.

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No Clear Reasons For Alarms

The number of alarms your system sounds during the day can be a good indicator if something is amiss. For example, if you usually have 20-30 alarms during the day and this increases suddenly to 80-100 alarms daily, you know something is not right. But sometimes it is hard to determine the reason for the alarms.

If your system can decipher the alarm direction, you already have an indication for the cause of the problem.

Maybe a piece of merchandise fell behind a display case and into the field of the security pedestal, it would cause a non-directional alarm. However, you could see an increased number of incoming alarms if your neighboring store does not deactivate their tags properly, and customers continue their shopping in your store.

Not knowing the causes of the alarms prevents you from fixing the underlying problem and will result in too many alarms — which in turn will scare away shoppers.

No Status Updates On The Health Of Your Systems

For most retail employees, the day starts by testing the loss prevention systems. They have to go with a tagged merchandise item past a pedestal to manually test if it sounds an alarm.

However, if the system does not perform at peak performance, stops working during the day or the staff does not perform a daily check, the store will be unprotected for longer periods of times.

Often, the reason for the malfunction is simple and could be fixed if the system would be able to sound an alert — for example moving a display that has been blocking the EAS system.

Also, by having an Internet connection, you can allow remote device monitoring and maintenance as well as constant firmware updates to keep your solution improving over time.

Which factors do you see as the most hindering?

Which common pitfalls do you encounter every day that hinder you to do your job effectively? We would love to hear them – please use the comments below to continue the discussion.

Meatlifting: Why Americans Steal Meat From Grocery Stores

When asked about your most bizarre experience as a loss prevention manager, you will probably have enough stories to fill a book – especially in supermarkets and grocery stores where ladies are stuffing honey-baked hams into their handbags or guys packing as many Purloined Sirloins down their pants as can fit.

And while some stories are funny to recount later, stealing meat is a serious issue: Every year millions of pounds of beef, pork and veal disappears from the shelves.

Meat Most Attractive For Shoplifters

Meat, next to alcohol, is one of the higher-priced items in any grocery store — Purloined Sirloin being the hottest item.

According to Heather Garlich of the Food Marketing Institute, it is not surprising that “we’ve been witnessing a steady increase in theft of meat at retail for the last several years. [We know] from anecdotal discussions with our food retail and wholesale members, meat and health and beauty aids, are indeed the highest ranked products for ‘shrink.’”

Desperation Or Need Are Not The Primary Drivers

Whenever the issue of theft of food items is discussed, the general assumption is the culprit acted out of desperation or need to feed themselves. You feel yourself emphatizing with the shoplifter — even trying to somehow justify their crime.

However, most of the meat that is stolen are expensive cuts such as lamb chops, filet mignon or Angus beef. The meat-lifting is done by people who can afford to buy groceries but want to occasionally reward themselves (“I worked so hard, I deserve a good steak!”) or out of a false sense of entitlement.

According to a study conducted by the University of Florida, most meat is nipped by women between 35 and 40 years old — men prefer to steal batteries or other higher-priced items they could potentially resell to support a gaming or drinking addiction.

How Can You Protect Your Merchandise?

While retailers and drugstores have been locking up hot items — such as cough medicines containing pseudoephedrine, perfumes, and cigarettes — into secure display cases or behind safe counters, this is not entirely possible for meat.

Locking Away Is Not An Option

Most shoppers want to get their grocery shopping over and done with as soon as possible and prefer to help themselves at self-help cooler-cases. If grocery stores would force customers to grab a number and organize their shopping around the butcher line, shoppers would change their primary grocery store faster than you can say “Hi, what can I do for you today?”

Food-Safe Tagging Inside The Packaging

A more effective option is tagging your products for electronic article surveillance. The package must include a food-safe security tag that holds up to refrigeration and freezing, is microwave-safe and conforms with health- and sanitation standards.

Prosecution & Other Consequences

The most effective deterrent for theft is being prosecuted. However, most police departments are rather short-staffed and will not have the manpower to come and arrest every single person stealing $20 worth of steak. In Dallas, Texas stealing under $50 will not be pursued at all.

So, what is a store to do? Other than posting codes of conducts and barring past offenders from reentering their stores – there is not much retailers can do other than using loss prevention technology as a long-term deterrent to keep them from coming back.

Want To Learn More?

Download our white paper about how to secure chillend and frozen meat products.

 

 

 

Most US Loss Prevention Systems Only Deal With The Tip Of The Iceberg

A few months ago, a man strolled into a retailer in a small New Jersey town. He looked relaxed wearing a navy sweater; his sunglasses propped up on his head. No one suspected he was about to steal three purses. A few hours later, a woman enters the same store, heads for the cash register to return the very same previously stolen handbags and asks for cash back. She knows she will get the money — they already scammed other local stores before.

(Photos provided by Mount Laurel Police)

(Photos: Used with permission of the Mount Laurel Police)

While it’s only a matter of time until they get caught by the police, the damage to this specific retailer is far bigger than the value of the purses alone. According to the Global Retail Theft Barometer report, every year 1.29% of U.S. retail revenue is lost to shrinkage. However, the outdated loss prevention systems in place just deal with a fraction of the problem. There is so much more to win.

Most US Loss Prevention Systems Do Not Tackle The Real Problem

Most retail stores in the United States are equipped with radio frequency (RF) or Acusto Magnetic (AM) based electronic article surveillance (EAS) solutions. Since these systems are electronic-based and not software-driven, they merely sound an alarm if a tag shows up in their electromagnetic field. Otherwise, the EAS system knows nothing.

Employees have become accustomed to the alarm going off — many times for the wrong reasons. For example, an incoming customer brought a reactivated label from a different store into your shop or merchandise with an active tag that fell within the electromagnetic field. Since it is embarrassing to confront a customer as a putative shoplifter, many employees shy away from pursuing the client and the loss prevention system is useless. Many front-line workers even see a loss prevention system more as an obstruction than a helpful tool which can assist them.

However, the much bigger problem is that the retailer does not know which item was stolen resulting in:

  • An inability to sell supposingly in stock items (stolen display models),
  • A larger inventory in stock to make up for stock inaccuracy,
  • Customer frustration when items are out of stock,
  • Inconsistent shopping experiences between online and in-store.

Software-Driven and RFID-Based EAS Systems Inject Intelligence Into Loss Prevention

A software-based EAS solution can alleviate this somewhat as it distinguishes between incoming, outgoing and non-directional alerts and has additional layers of intelligence. However, it will not be able to tell which exact item was stolen — only an RFID loss prevention solution can do that.

Additionally, you can glean analytical insights from your retail analytics and dashboarding solutions. This data can be used to learn more about the causes for the alarms sounded and better eliminate false alarm situations. You can also be on top of your system’s health and status to constantly improve performance and avoid service calls.