I have seen first-hand customers quickly pushing shopping carts full of unpaid merchandise out of a store’s door, purposefully not scanning all their items at self-checkout registers, and concealing merchandise and walking out without paying. Retail security professionals will certainly agree and understand that the issue of theft in retail stores is a constant struggle.
Theft is not just a problem at brick-and-mortar outlets, but also for online retailers that have distribution centers, vehicles that transport merchandise from centers to customers, and people who deliver the goods.
To examine these issues and solutions, the Security Industry Association (SIA) hosted a Vertical Insights Symposium: Retail Security online session on Nov. 8 with eight security professionals, including a keynote presentation by Kennarios Kirk, Sr., Senior Regional Manager of Logistics Loss Prevention for Amazon. Kirk previously worked in the asset protection departments for Ross, Rite Aid, and Target.
Organized Retail Crime Rings
While some shoplifters steal goods for their own personal benefit, many are part of local, multi-state, or national organized retail crime (ORC) rings, which are criminal enterprises that steal merchandise in a variety of locations to sell online. They use stolen credit cards and return stolen merchandise to get cash or gift cards, according to the National Retail Federation (NRF).
“Organized retail crime is real, and I think it’s here to stay,” said Kirk. “We have to continue to do everything within our power, everything within our jurisdiction, in order to combat organized retail crime. Not only will it affect the cost that’s passed on to the consumer, but it also has an impact on the organization’s brand.”
As for Amazon, Kirk pointed to the company’s seller policy and counterfeit crime unit. “I think some of the work that the counterfeit crime unit has done has been a huge impact on the overall business and some of the opportunistic resellers out there,” he explained.
During SIA’s seminar, speakers explained that ORC creates a secondary economy, an unlimited digital marketplace with lower prices than traditional retail, no tax revenue, and no employment benefits.
The Retail Industry Leaders Association reported that ORC has led to $125.7 billion in lost economic activity and 658,375 fewer jobs, which pay $39.3 billion in wages and benefits to workers. It also costs federal and state governments almost $15 billion in personal and business tax revenue, not including lost sales tax revenue.
As a result, ORC can cause grocery stores and pharmacies to close locations, taking the availability of goods and services away from communities. This hurts communities that rely on tax revenue for road maintenance, emergency management services, and other government programs, as well as those that rely on retail to provide jobs.
A Growing Problem
NRF reports that retail theft is a $94.5 billion problem, based on 2021 statistics, the latest figures available, up from $90.8 billion in 2020. A recent survey shows that 71% of retailers reported an increase in ORC and employee theft since COVID-19 began.
When looking at theft among brick-and-mortar and online retailers, Kirk said that there are aspects that they have in common:
- ORC rings. These enterprises have plans for how to take advantage of various situations.
- Barriers to prosecution. Some state or city laws prevent shoplifters from getting charged with a felony based on the dollar amount of the stolen merchandise. For example, in California, shoplifting is chargeable as a misdemeanor if the value is less than $950.
- Employee theft. Some employees in brick-and-mortar stores and in online retailer distribution centers steal products and/or money.
- Supply chain vulnerabilities. Sometimes merchandise does not make it to its intended location due to people stealing items in-route such as on railcars.
More importantly, retail thefts cost lives. 2021 statistics from D&D Daily show that there were 595 deaths that year including 317 customers, 152 retail associates, 108 suspects, and 18 security professionals.
As for ways retailers can combat crime, security professionals at brick-and-mortar stores should recommend the following solutions to upper management:
- Revamped design. Have expensive merchandise in the back, and reduce items on the sales floor.
- More cases and devices. Lock merchandise up in display cases or attach security devices directly to items, but both would require an associate to assist customers.
- Modify shopping carts. Have wheels lock if carts do not go through checkouts to prevent push-out of stolen merchandise. Consider having a required returnable rental fee to ensure customers bring carts back from the parking lot.
- Increase parking lot security. Better monitor people coming onto the property using artificial intelligence cameras to identify suspicious groups and weapons and use of license plate recognition technology.
- Review cash handling procedures. Examine when and how associates process cash.
- Increase entrance security. Post security professionals at the point of entry.
- Shorten evening hours. Consider closing at 5 p.m. or 6 p.m. instead of 9 p.m.
- Install bollards. This can prevent customers from driving vehicles into the store to steal merchandise.
As for last-mile carriers like FedEx, UPS, and Amazon, which are responsible for delivering goods to people’s doors, Kirk said they work hard to combat package theft and hijacking with specialized training.
Security professionals at both last-mile carriers and physical retail stores should recommend management:
- Continue to build private-public partnerships with law enforcement.
- Ask law enforcement to transfer ORC court cases to more strict jurisdictions.
- Create training around violence and active shooter threats.
- Assess security vulnerabilities.
- Build networks by joining local ORC alliances and the Coalition of Law Enforcement and Retail.
Security professionals should continue to find ways to utilize the latest technology and work with law enforcement to reduce retail theft. To watch the entire SIA symposium on-demand for free, click here.