Protecting Against Theft


Employee theft accounted for 35.2% of shrink dollars.

41.2% of retailers worldwide experienced a significant increase in shoplifting in 2009, attributable to the economic downturn.

Shoplifting and employee theft in the U.S. cost retailers $42.2 billion from June 2008 to June 2009.

Every American family was forced to pay an additional $435 due to stores raising prices to make up for shrink.

Cosmetics were the most shoplifted item, losing roughly 2% of sales due to shoplifting and employee theft.

Retailers apprehended almost six million store thieves in 2009, 87.5% of whom were customer thieves and 743,499 were employee thieves.

Doing an effective job of store security in today’s retail market means knowing the importance of constant vigilance and then accepting that this diligence still may not be enough.

“Use the security tools that are available,” said Mike Visconti, vice president of operations for Handee Marts Inc., a 62-unit 7-Eleven licensee in Gibsonia, Pa. “I don’t know if there are new tools, but most of the stores I see know what the tools are for, but still don’t use them. They don’t have shift integrity because they don’t think they have any thieves.”

Retailers who allow themselves to grow lax, Visconti added, “are absolutely in for a rude awakening—and then all of a sudden you are in a mode where you have to react to a crisis situation.”

A better strategy is to be proactive at all times, Visconti urged.

“Look at your average transactions, cash-overs and shorts, as well as cigarettes on at least a daily basis, if not shift by shift. Track sales trends from last week and last year. Those are probably the biggies,” he said.

Jerry Smith, president of J. Smith Business Consulting LLC in Appleton, Wis., said that those who may think they have a good grip on theft should nonetheless leave it to the experts.

“It’s just like going to a doctor for a physical. You should have a third-party go through your books and see what kind of theft issues you’re having,” Smith said. “That’s probably the most valuable advice I could give someone. There is a level of denial when you’re trying to solve those situations yourself.”

Accept the Truth
Another mistake that could cost an operator is a tendency to “make excuses for the numbers,” Visconti said. “That means that when the numbers show you there is a problem you say, ‘oh, that’s my friend Joe, that can’t be right.’ Instead, you blame it on something other than what the numbers show you.”

An area that needs to be checked often, Visconti added, is lottery. “It should be balanced by the corporate office daily. You also need to be checking the phone cards, because that’s another big area where fraud can occur. And, of course, credit card transactions really have to be watched. It’s a big deal these days.”

As for securing the outside of a location, Visconti advised operators to make sure the parking lot is well lit at night. “Everyone needs to be reminded every once in a while. We all become a little lax ourselves. I think it’s a matter of the supervisors checking on the managers to make sure that they are not lax in their checks.”

Another problem retailers have, he said, is feeling secure because they have the latest video system watching things. “How much time do you actually spend watching the security video or DVDs? I would rather be on the frontline waiting on the customers than sitting in the back room watching the security video.”


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