Apprehending the Internal Thief

• By Ralph C. Jensen
• Aug 01, 2014

Some of the most discouraging statistics in the security industry are the record numbers reported in shoplifting from dishonest employees. Recent numbers reported by Jack L. Hayes International shows that those numbers have increased yet again.

In 2013, nearly 1.1 million shoplifters and dishonest employees were caught by just 23 large retailers, who recovered more than $199 million from these thieves. The retailers involved in this reporting represent 23,204 stores and more than $600 billion in retail sales. For shoplifting, persons being caught increased by 2.5 percent; however, the worst news is that dishonest employees jumped 6.5 percent in 2013.

“What also is of importance is these increases follow similar increases reported the previous two years,” said Mark R. Doyle, president of Jack L. Hayes International. “Retail theft is a serious problem which is stealing retailers’ profits and causing consumers to pay higher prices to help offset these losses.”

The world has always had its share of liars, cheats and thieves; yet, shoplifters and dishonest employees continue to be apprehended in record numbers. There are some particularly alarming facts from this survey. More than 1.1 million shoplifters and dishonest employees were apprehended last year, and more than 78,000 dishonest employees were caught.

Why the continued increase in shoplifting? Part of the problem stems from further growth and complexity of organized retail crime activity. A poor economy undoubtedly has had something to do with theft and shoplifting, as well as higher-than-expected unemployment rates. There are fewer sales associates on the floor that could help prevent theft, and let’s face it, the criminal justice system is packed full of other cases.

According to the Hayes International report, losses from organized retail crime are reported to be more than $30 billion annually, triple of what they were a decade ago. As you can imagine, these thieves work in teams, using distraction to steal such things as overthe- counter medicines, razors, baby formula, batteries and designer clothing. Groups of professionals or international shopping gangs will “hit” a store, often times using a booster bag, where reports of losses range in the thousands of dollars.

Stolen merchandise is easy to sell. Thieves have found that selling their ill-gotten gains can be liquidated via an online auction. This means quicker sales and higher prices than the traditional method of selling on a street corner or at a local flea market. It also means the thieves have access to a much larger audience for raising cash.

Because of great technology today, losses from fraudulent returns/refunds are estimated at $16 billion per year. Receipts are created through a desktop publishing program and color printers, and then stolen items are returned to the store for their full retail value. There is less of a social stigma than on a shoplifter, while many professional and hardcore thieves find shoplifting is a highly profitable, low jail-risk endeavor.

Many would have you believe this is a victimless crime, which is certainly not the case. There is likely no way to measure the negative impact that shoplifting has on the economy and general public. Study experts estimate there are upwards of 900,000 incidents daily in the United States. Conservative estimates show the daily take for this type of behavior ranges as high as $48 million.

Shoplifting is big business. It costs both the retailer and general public a lot of money. Stores suffer a loss of profits, and employees lose their jobs as a result of cutbacks of staff or layoffs from declining profits. Consumers pay more at the cash register, not to mention the loss of sales tax revenue.

In order to fight back against the shoplifting problem, store chains are putting smart devices everywhere. There are more than 6 million security cameras in stores nationwide. While a security camera cannot stop a shoplifter, it can give the loss prevention officer an idea of what is going on.

Cameras see everything. They watch down the store’s aisles and monitor the entries and exits. There are cameras pointed at the cash register. Look around when you’re checking out. There are cameras watching from places you wouldn’t even think of.

Stopping a shoplifter is serious business and security systems play a key role in deterring a thief. The bottom line: Loss prevention technology improves the customer experience.

This article originally appeared in the August 2014 issue of Security Today.