The day after Thanksgiving traditionally opens the portals to holiday shopping. As stores are flooded with eager bargain-seekers this November 26, wise retailers will do well to remember that shoplifters also swell the post-Turkey Day crowds.
Every day is a good day for shoplifting, but thieves know that they can take advantage of the chaos that occurs on the unofficial opening of the holiday shopping season to hide in the crowds. They slither among legitimate shoppers right up until Dec. 24, doing their Christmas stealing.
Stores inadvertently make it easier for both internal thefts and shoplifting to occur during the holiday rush. The swelling of shoppers demands the hiring of seasonal workers. The presence of these temporary employees contributes to both internal and external thefts. In addition, full-time staff are stretched thinner during the holiday shopping season. Their attention is diverted in many more directions, leaving quarterback-sized openings that thieves can use to their advantage.
An Ounce of Prevention
(The number of items that must be sold, 33, is based on the store's net profit of $3 for the item, after subtracting wholesale cost, fixed store expenses -- such as taxes and rent -- as well as unexpected expenses, as apportioned to each item. So even if the mark-up for a particular item is higher, and the store has to sell only 23 or 13 more items in order to recoup the loss, prevention starts to look like a pretty attractive idea.)
Temporary Workers: Are They Really Good for Business?
Seasonal workers are often part-time, not entitled to benefits (except store discounts, and what could be more attractive than the five-finger kind?), and low on loyalty to a business that will cut them loose right after Santa slides down their chimneys. In addition, the relatively short amount of time they spend in the store, compared to full-time employees, means that they are less experienced and receive less training in spotting shoplifters and thwarting shrinkage.
Add to these facts the statistic that employees overall are the cause of between 45 percent and 60 percent of store losses. Plus, temporary employees have less to lose than permanent workers. Seasonal employees therefore contribute to both internal and external shrink, both by stealing themselves or in cahoots with other employees or outside conspirators, as well as by failing to notice or take the appropriate actions to deter thefts from shoplifters.
Although permanent employees would seem to be better trained and more loyal to the store, many times that isn't the case. Store policies often don't allow for permanent employees to receive benefits or high hourly salaries, and these workers may sometimes be tempted to "make up the difference" between the amount they receive in their paychecks and the amount they feel they deserve by shoplifting or pulling other scams that shortchange the store. And many stores overlook the power of the floor employees to thwart theft, Management sometimes fails to provide them with the minimal amount of training they need to help reduce shrink.
Cures for Holiday Shrinkage
1) Employee Hiring and Training:
Invest an hour in instructing employees about shoplifting techniques and appropriate employee responses. Invite store security, mall security or local police to speak briefly about correct procedures for apprehending, detaining and questioning suspected shoplifters -- and the different rules that apply to adults and juveniles. Also, stress that excellent customer service and employee teamwork are the keys to thwarting shoplifters. Incentive bonuses are also a good idea.
Set a "zero-tolerance" policy, and make sure that every employee understands that any illegal shenanigans will lead to immediate termination and prosecution. Period. No exceptions.
2) Smart Layout:
Keep high-priced items locked up, and assign a proportionate number of employees to those areas so that sales aren't lost by customers leaving in frustration over not being able to access the products.
The cash registers belong in the front, near the doors, so that shoppers have to pass them in order to leave. Placing the registers in the back invites shoplifters to mosey out of the store with unpaid-for merchandise.
In many chain stores, the visual people trump the security force. If that is the case, pointing out the impact that increased shrink could have on everyone's job, salary and bonus is often enough to get the designers to make small changes that can have large effects. If visual displays are placed so that they could have a negative effect on shrinkage, such as when a designer insists on hanging a Santa Claus decoration where it blocks a CCTV camera, a little reason may lead to a compromise that is in everyone's best interest.
3) Anti-Shoplifting Tactics:
If you don't have a CCTV system, now is the time to get a good one. If the store really can't afford to make the investment, put up fake cameras, or augment some real cameras with fake ones. But -- and this is a big but -- the fake cameras must look real, otherwise, they're worse than useless and may even serve as an invitation to thieves.
Increase the number of uniformed security guards as well as plainclothes floorwalkers who patrol the store. If you don't have any on staff, contract with an agency to provide them, but don't try to bargain for the absolute lowest rate, because you'll get what you pay for. Make sure that the guards who work in your store are presentable and well-trained, not unkempt superhero-wannabes who work cheap because this is the only job they could get.
Keeping the Rule of 33 in mind, it is clear that paying for security is actually a way to increase profits by decreasing shrink. (Consider the cost of one $100 item stolen per hour because of a lack of security personnel. Security officers cost much less than that.) Security is an investment that will pay off in higher returns, not an act of throwing money down a black hole.
Make it known through posters and by word-of-mouth that every shoplifter is prosecuted. Period. No exceptions.
Try a variation on the overseas technique of posting cardboard cutouts of security officers in different places in the store. Dress mannequins in uniform or post photos of police officers or security officers around the store. Change the location of these deterrents daily. Incredibly, people react to these images in the same way they would to the presence of real officers, as long as their locations are varied constantly.