Now is the time many retailers are bringing in casual staff to cater to the holiday season and pre-Christmas rush.

It’s a traditionally busy time for human resources and retail management alike. But amidst all the necessary onboarding, training and recruiting, store security should be also be at the top of every retailer’s mind as part of the hiring process.

Why? Because sadly employee theft accounts for a third of retail loss. So, as you welcome new staff to your team in time for Christmas, here’s what you need to know.

The statistics

Last year the National Retail Federation noted dishonest employees accounted for 33.2 per cent of all retail loss, costing the industry around $15 billion.

In a further report they also found each incident cost employers an average of $1264.

The high cost of individual employee theft is attributed to the fact the crime can be hard to detect and often a significant amount has been stolen by the time dishonesty is suspected.

So how do employees steal?

Employee theft methods

Employee theft can take a number of forms, but most often it involves leveraging the staff member leveraging a position of trust to their advantage.

Common methods include:

• Under ringing
  Where the cashier uses the Point of Sale to ring up an item at less than its listed price, collects the full amount and pockets the difference.
• Product theft
  This is just the straight theft of a product.
• Skimming
  Involving pocketing a small amount of money from the till in the hope it will go unnoticed when the till is counted at the close of day.
• Sweet hearting
  Sweet hearting can involve a series of strategies but sees employees fail to ring up or discount items for the benefit of friends.
• Gift card theft
  Typically difficult to detect, git card theft involves an employee issuing fake refunds for gift cards that they keep. It also involves handing a customer a blank gift card while they keep the loaded one.
• Refunds
  In this case, the cashier rings up a false refund and keeps the cash.

Can you pick a thief?

Just like general shoplifting, there is no set profile for a dishonest employee. They can be male or female, young or mature, and come from all races, religions, and backgrounds.

What does tend to unite them is motivation, which usually takes one of three forms:

• Need: To support family or lifestyle
• Revenge: Bitterness about their situation or anger toward management, often emotionally driven.
• Thrills: The adrenaline rush brought on by the risk of getting caught (often there is no financial need to steal).

That said, there are a host of ways to deter employee theft, the most important of which is staff screening.

Staff screening

At busy retail times like pre-Christmas, screening of employees can prove more challenging, yet it is no less important.

Despite the need to staff a store adequately, all prospective team members should be interviewed, have their references checked and where possible have a criminal history check undertaken.

This helps eliminate potential staff members who may have form for dishonest practices.

Meanwhile, a host of other policies and procedures should be adopted by retailers to guard against employee theft. These include:

Culture and morale

The culture of an organization plays an important ole in whether employees will be tempted to steal from a retailer. Statistics indicate workplaces where employees feel valued, heard and adequately recompensed for their labor are less prone to theft.

General shoplifting deterrents

A retail outlet which employs best practice in loss prevention generally is also often less prone to employee theft.

That’s because proper loss prevention eliminates theft opportunity but also indicates a no tolerance approach to shoplifting and crime.

Education

Every staff member who is brought into a retail organization should be clearly educated about the repercussions of theft.

This is not only for the benefit of employees who might be tempted to steal, but also helps create an environment where others may be more willing to speak up if they feel a fellow staff member is doing something inappropriate.

This education also helps instill the knowledge that theft affects far more than the retailer and the dishonest employee. It also impacts the retail bottom line which ultimately impacts the number of staff members who can be employed and the rates of pay they receive.

Monitoring

Staff monitoring, whether via CCTV or supervision acts to deter employees from theft. Monitoring can also involve regular locker and bag checks or employing security staff to watch the entire store.

Technology

Meanwhile, there is a wealth of technology that reduces both shoplifting and internal theft. From Point of Sale reporting and analytics, to EAS security tags and labels which protect items from theft, retailers should look to and implement the technology available in advance of the pre-Christmas rush.

You can learn more about EAS security tags and labels here.

A survey of 20 of America’s largest retailers has found they apprehended 279,000 shoplifters and dishonest employees in 2018, recovering over $114 million in total from thieves.

Each year, loss prevention consulting firm Jack Hayes International conducts its Annual Retail Theft Survey, with the latest edition indicating the value of both individual shoplifting incidents and employee thefts soared.

Here’s an insight into what the survey found…

The Jack Hayes International Theft Survey

Now in its 31st year, the Jack Hayes Theft Survey interviewed 20 large retail companies, who last year had 13,674 stores between them and over $330 billion in retail sales.

The survey respondents account for a large cross-section of the retail community, encompassing department stores, mass merchants and big box retailers.

Their latest survey found 55 per cent of survey participants experienced an increase in shrink in 2018 compared to the year prior, with 35 per cent reporting a decrease in shrink, and another 10.0 per cent reporting shrink stayed about the same.

Apprehensions down, loss value up

This year’s survey noted retail theft apprehensions were down, but the dollar value of incidents had risen.

In 2018, there were 279,196 theft apprehensions valued at $114,126,134, compared to 316,704 apprehensions in 2017, valued at $110,620,301.

“Theft case values soared in 2018 with the average shoplifting case value ($301.97) increasing 11.8 per cent; the average dishonest employee case value ($1361.37) increasing an amazing 30.1 per cent; and the total average theft case value ($408.77) up 17.0 per cent,” President of Jack L. Hayes International, Mark R Doyle said.

“With the increase in dollar recoveries, retail theft overall continues to be a serious problem for retailers negatively impacting their bottom-line, which results in higher prices to consumers.”

Shoplifting incidents

The number of shoplifters apprehended decreased 11.7 per cent in 2018, with 251,051 shoplifters apprehended by the major retailers.

Meanwhile, over $75 million was recovered from apprehended shoplifters in 2018, a slight decrease of 1.4 per cent from 2017, and an additional $126 million was recovered from shoplifters where no apprehension was made, down 1.4 per cent from 2017.

The cost of shoplifting

The survey noted in 2018, a University of Florida study found total retail losses were approximately $44.2 billion annually, with shoplifting estimated to account for 30 to 40 per cent of total retail loss and the average shoplifting case for all types of retail costing approximately $50.

Therefore, Hayes estimates shoplifting costs retailers:

• $13 – $18 Billion per annum

• $36 – $48 Million per day

• $1.5 – $2 Million per hour

• $25,000 – $33,000 per minute

Employee theft

For the major retailers, internal theft also decreased in 2018 on the year prior but the money recovered from their crimes was significantly higher. 28,145 dishonest employees were apprehended in 2018, down 12.7 per cent from 2017.

Over $38 million was recovered from employee apprehensions in 2018, up a substantial 13.5 per cent from 2017.

In a shocking figure, the survey found one in every 40 employees was apprehended for theft from their employer in 2017.

“Employee theft is perceived by many to be the most severe problem facing industry today,” the survey noted.

“Many people often think of theft and abuse in companies as being isolated acts, which in themselves cost an organization little. Unfortunately, this is untrue. It is also not true that most employees are caught stealing inexpensive items such as ‘pens, pencils, and paper-clips’ from their employers.

“Over the years, Hayes International has witnessed a steady and significant rise in this serious problem. Each year thousands of employees are caught stealing from their employers and co-workers.

“Furthermore, our studies reflect that this group of thieves are being caught stealing far more than a few insignificant supplies.”

You can learn more about protecting your retail outlet from shoplifting here, and securing your store against internal theft here.

Training

When it comes to identifying a shoplifter, there is no single type. Shoplifters come from all demographics and may steal for a variety of reasons, whether that’s poverty, an adrenaline rush, or because the opportunity arises.

But according to a recent article in Business Insider, staff are often the first to notice specific behaviors that indicate an offence is about to take place.

Here are the key shop theft clues often noticed by retail staff…

Body language

The way a customer conducts themselves instore is a major indicator as to whether their intentions are genuine or more devious.

The retail staff interviewed by Business Insider note a customer who appears too nervous or overly relaxed is often trying to conceal their real motive for entering a retail outlet.

“Some shoplifters often try ‘harder than normal to blend in’,” one US retail employee said. Other customers might appear more on edge, hurrying through a store without making eye contact with staff.

Head down, no contact

This lack of eye contact is a suspicious sign many retail employees believe raises an immediate red flag.

Often this failure to interact with either staff or other consumers extends right through the shoplifter’s entire visit to a store, seeing them avoid any meaningful contact or conversations with sales associates.

It might be because they feel guilty, are preoccupied with the intended theft at hand or don’t wish to be remembered, but patrons who avoid interaction often indicate something’s amiss.

Assessing the store, not the products within it

When a customer looks around more at the shop than the merchandise, it can also be a key clue a person is scoping the store rather than looking to enjoy the retail experience within it.

They may be seeking clues on security systems in place or assessing their ease of exit. But either way a customer who is looking up and around rather than at the products on offer may not be visiting for entirely legitimate reasons.

Importantly, this potential thief may not be seeking to steal during their initial visit, but might actually be marking a target for future theft.

Oversized clothes and excessive bags

Unseasonal or overly large clothing is often touted as a signal a shopper might be considering concealing merchandise. The anecdotal evidence from retail associates confirms this is a definite clue.

“Customers with ‘baggier clothing’ sometimes stick out, given that sagging garments offer shoplifters more room to hide stolen goods,” Business Insider reflects.

Meanwhile, large bags can also be employed to conceal items, and some are even designed to interfere with older-style Electronic Article Surveillance systems.

A target in mind

Whether it’s electronic accessories, top shelf liquor, or clothing, a shopper who makes a beeline for a specific area of the store could also offer a clue they have something in mind to steal.

Meanwhile, some products and departments of a retail outlet are more prone to theft than others.

“Shoplifters ‘usually go straight to electronics, cosmetics, or clothing’,” one retail employee noted, while another agreed “someone with their ‘head down’ walking straight towards electronics could raise some red flags”.

The regular offender

The biggest clue of all comes in the form of the frequent offender who regularly steals from an outlet and whose suspicious behaviour has previously been noticed by staff.

“We usually know who our thieves are,” one retail employee told Business Insider.

Offenders often visit a location or chain of outlets more than once, especially if they identify flaws in their security and surveillance.

Best prevention strategies

The best loss prevention involves using multiple strategies and having a comprehensive approach to product security.

It includes:

• Educating staff as to the behaviour of shoplifters and suspicious activity to watch out for
• Utilising electronic article surveillance like security tags and labels to monitor stock
• Implementing regular stock takes and RFID inventory tracking to ascertain whether items are stolen and what stock is most at risk
• Creating good store layout to eliminate hidden areas, and position high value stock/commonly stolen items within view of staff
• Offering good customer service
• CCTV monitoring
• Using tethered cables, lockable displays and cabinet locks for high-value and frequently stolen items

You can learn more about selecting the right EAS security options like security tags and labels for your retail environment, or contact our friendly staff for further advice.

Whether your retail outlet has been targeted by shoplifters or you’re just looking to better understand the playing field, there are a host of facts and figures that indicate just how prevalent retail shrink is in America.

Here’s a quick recap of 10 scary retail shrink statistics in the US…

Loss costs US retailers almost $50 billion annually

The National Retail Federation (NRF) found shoplifting, employee theft, error and fraud cost the industry an astounding $46.8 billion in 2018 alone.

In context, that means shrink sees the industry lose 1.33 per cent in sales.

Most loss is due to shoplifting

In the US, shoplifting and organized retail crime (ORC) are the prime contributors to retail shrink, with the NRF noting 35.7 per cent of loss is due to external theft, outpacing employee theft at 33.2 per cent, administrative error at 18.8 per cent, unknown loss at 6.6 per cent and vendor fraud or error at 5.8 per cent.

External theft has been the primary source of retail loss for the past four years in a row.

The average incident cost has almost doubled

The average cost of a shoplifting incident has almost doubled to $559 since 2015.

Shrink is costing retailers more

In 2018, 20 per cent of NRF survey of respondents reported shrink at 2 per cent of sales or more. That is up from only 17.1 per cent reporting a shrink rate above 2 per cent in 2015.

1 in 11 Americans shoplift

Past figures from the National Association of Shoplifting Prevention indicate one in 11 Americans shoplift. In cold hard numbers, that means 27 million Americans are shoplifters, while 10 million have been caught in the act at some point in the past five years.

There are three types of shoplifters

Researchers commonly break shoplifters down into three distinct categories:

• The professional – This shoplifter steals for economic gain as part of a group or individually.

• The amateur – This shoplifter steals for the “rush”, at the behest of friends or out of simple necessity.

• The opportunist – This type of shoplifter rarely enters a retail environment intending to steal, but rather takes items because security is lacking, or the opportunity is available.

A repeat offence

A FaceFirst study found 60 per cent of known shoplifters enter at least two separate locations of the same retail chain, while 20 per cent visit three or more locations.

Shoplifters steal for a variety of reasons

Shoplifters steal for both rational and non-rational reasons, with researchers noting they usually steal due to one of five factors:

• Socio-economic disadvantage

• To fund drug use/addiction

• Thrill seeking

• Kleptomania

• Absent mindedness

Footwear is a frequent target

Looking across the verticals at what thieves are most likely to target, the most recent Global Retail Theft Barometer indicates the most commonly shoplifted items in America are:

• The apparel sector – footwear

• In DIY/home improvement – power tools

• In electronics – mobile devices and accessories

• In food and beverages – wine and liquor

• In health and beauty – fragrances and perfumes

When people shoplift

In the US winter is prime shoplifting season, along with sales periods. Much of that theft is driven by the festive season, with 81 per cent of winter losses occurring during holidays/festivities.

This shrinkage is prompted by increased foot traffic throughout stores, making it harder to track and detect theft, and is then further complicated by casual employees, who often have less training in store protocols and shoplifting detection.

Looking to combat theft?

You can learn more about the tools and strategies to combat shoplifting here, or speak with our friendly staff about implementing effective EAS solutions like security tags and labels.