Retail Loss “Penalty” Costs Average U.S. Household $615 Annually; Dishonest Employees Biggest Contributor; Shoplifting Remains Significant
THOROFARE, NJ — Nov. 4, 2015 – Shrink, comprised of shoplifting, employee or supplier fraud, and administrative errors, rose in the U.S. from 1.28 percent of sales in 2013-2014 to 1.97 percent during 2014-2015, based upon responses from common retail respondents who participated in Global Retail Theft Barometer surveys both years.
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Globally, this compares to 1.42 percent, a figure also up from the previous .94 percent average of all common retailers surveyed the previous year.
Retailers expressed that a range of factors, including a challenging retail environment, caused them to implement austerity measures resulting in a reduction of loss prevention investments. This, combined with areas of high unemployment and limited tools to monitor internal theft and inventory discrepancies, all contributed to an increase in their shrink.
According to the report, the annual cost of shrink to U.S. shoppers, as absorbed or passed on from retailers, averaged $615 per household.
The study, underwritten by an independent grant from Checkpoint Systems, Inc. (NYSE: CKP), was carried out during 2014-2015 by The Smart Cube and Ernie Deyle, a retail loss prevention analyst. It was based upon in-depth phone and written survey interviews conducted in 24 countries among more than 200 retailers representing nearly $1 trillion in sales during 2014-2015.
Seasonal Comparisons
Seasonally, U.S. respondents said that 46 percent of their yearly losses occurred in winter, nearly twice as much as the next season, autumn, at 24 percent. Spring (18 percent) and summer (12 percent) followed.
Vertical Retail Comparisons
U.S. apparel specialists (2.28 percent), pharmacies/drugstores (2.25 percent) and non-grocery retailers (1.9 percent) witnessed the highest shrink rates because of the widespread prevalence of internal and external retail theft targeting their merchandise.
Employee Theft vs. Shoplifting
In fact, while shoplifting is the biggest cause of retail shrink in 18 of the 24 countries surveyed, in the U.S., employee theft ranked first at 45 percent, with shoplifting next at 36 percent. The primary reasons for employee theft were weak pre-employment screening procedures, reduced associate supervision, increasing part-time workforce (especially during peak winter periods when theft is highest), and the easy sale of stolen merchandise.
Shoplifting continues to plague the retail industry due to escalating problem of organized retail crime, easy sales of stolen merchandise through online sites, reduced investments in loss prevention tools and resources, and the general perception of shoplifting as a “low-risk/non-offensive” crime.
Most Stolen Merchandise
Shoplifters and dishonest employees in the U.S. primarily targeted small and easy-to-conceal items such as liquor, mobile accessories, batteries, fashion accessories and razor blades, as well as high-value items with high resale value, such as tablets. When sorted by retail vertical, the most stolen items included footwear (Apparel and Fashion Accessories); batteries (DIY Home Improvement); mobile device accessories (Electronics); wines and liquor (Food and Beverage); and razor blades (Health and Beauty).
According to Deyle, “This year’s results highlight the persistent factors that impact shrink and ultimately reduce retailers’ profitability. Even if retailers are paying more attention to all aspects of the problem, without a strong investment in loss prevention tactics, tools and resources, they won’t get the results they’d expect. Our hope is that this report helps the industry better understand all the complexities of the shrink problem as well as the most cost-effective ways of addressing it.”
“This is our fourteenth year of supporting what continues to be the industry’s only global statistical research,” said Per Levin President of Merchandise Availability Solutions, Checkpoint Systems. “To combat increased shrink, retailers are adopting strategies to approach losses from a wider perspective from all levels within the organization and work with their supplier and solutions partners. With the right technologies, people and processes, they can achieve improved merchandise availability, which directly impacts shoppers’ satisfaction and retailers’ profitability.”
Loss Prevention Measures
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During the latest reporting period, U.S. retailers that also participated in the study in 2013 reduced their overall loss prevention spend to 0.50% of sales, which contributed to the reported increase in shrink. Most common loss prevention store solutions included CCTV/DVR (83 percent), alarm monitoring (78 percent), and security guards (63 percent). Most common merchandise protection solutions deployed to prevent retail theft included alectronic article surveillance (EAS) (68 percent), spider wraps/security keepers (41 percent) and advanced inventory control tactics (27 percent).
Interested parties can obtain a copy of the complete 135-page Global Retail Theft Barometer report and see a video overview of the study at http://www.GlobalRetailTheftBarometer.com. In addition, an in-depth review of the study will be available via a webinar hosted by Loss Prevention Magazine on November 11 at 1 p.m. EST.
Retailers wishing to participate in next year’s Global Retail Theft Barometer study may register here.
About The Smart Cube (www.thesmartcube.com)
The Smart Cube is a global professional services firm that specializes in delivering custom research and analytics services. The firm helps organizations make critical decisions based on bespoke intelligence and insight. Founded in 2003, The Smart Cube has conducted more than 19,000 studies through its global network of 500 analysts. The firm is headquartered in London and has professionals throughout Asia Pacific, the United States, Europe, and Latin America. Follow The Smart Cube on LinkedIn athttp://www.linkedin.com/company/the-smart-cube or on Twitter @TSCInsights.
About Checkpoint Systems (www.Checkpoint Systems.com)
Checkpoint Systems is a global leader in merchandise availability solutions for the retail industry, encompassing loss prevention and merchandise visibility. Checkpoint provides end-to-end solutions enabling retailers to achieve accurate real-time inventory, accelerate the replenishment cycle, prevent out-of-stocks and reduce theft, thus improving merchandise availability and the shopper’s experience. Checkpoint’s solutions are built upon 45 years of radio frequency technology expertise, innovative high-theft and loss prevention solutions, market-leading RFID hardware, software, and comprehensive labeling capabilities to brand, secure and track merchandise from source to shelf. Checkpoint’s customers benefit from increased sales and profits by implementing merchandise availability solutions to ensure the right merchandise is available at the right place and time when consumers are ready to buy. Listed on the NYSE (NYSE: CKP), Checkpoint operates in every major geographic market and employs more than 4700 people worldwide.
S.A.Q – CHECKPOINT LABELS
I was browsing the web a few nights ago and came across an article titled, “S.A.Q”. I had no idea what it meant, so I read a bit. The acronym stands for Should Ask Questions. Questions that should be asked, but are seldom brought up. I thought, this would be a great way to tackle some of the challenges small retailers face in regards to product protection strategies. Smaller companies don’t have a large LP department that can test new products and do cost/benefit analyses on security devices. They are focused on running their businesses, while trying to balance ways to limit shrink. So I’ve put together 5 questions that retailers should ask about Checkpoint Labels, but don’t.
1. What can I use checkpoint labels to secure?
Usually this is posed as, “I have a problem with item x, how can I fix the problem and stop shoplifting?” When looking at EAS labels, you really have an endless amount of possibilities to contend with. If you are a grocer, labels can be applied to high theft items like steak and cheese, but can also see use on thousands of other products that you may be having shrink issues with. For other stores, they can be applied to apparel, footwear and virtually any hardline item.
2. How do I apply checkpoint labels to my product?
I wish more retailers would ask this question. I see, very often, a lack of understanding when it comes to security device. Whether they be a simple EAS label, or other more advanced systems, I find that often we are not thinking like a thief. Take for instance, a digital camera. Where would you apply the tag? If you said “on the box”, you’re wrong. If the box can simply be opened, you’ve defeated the purpose of the label altogether. If the thief’s end game is the product, they don’t really care about the box. A little common sense thinking can make your dollar go much further. So when you are applying your labels in the store, make sure to tag the physical product whenever possible and practical.
3. Can the checkpoint label be defeated?
I won’t lie to you. They can be defeated. If you simply tag the box and not the product, then a thief can take advantage of that. I’ve had shoplifters take a knife and cut away the part of the packaging that had the EAS label attached to it. You have to be smart about placement as previously stated. You won’t stop every thief, especially a determined one, but you can minimize those hundreds of opportunistic thieves that will take advantage of a situation should one present itself.
4. What is source tagging?
If you have a great relationship (or you buy a lot) from your manufacturer, you can most likely have them source tag certain products. What that means is that the product will come from the source with an EAS label or tag already attached. This means that you don’t have to spend the payroll cost to do it yourself.
5. Will these tags actually make a difference?
Nothing in life is a guarantee, right? I can tell you that if you use the labels properly and use them as a layer in your product protection strategy, they will absolutely make a difference. We tested whether EAS made a difference a few years back. At one store, we took all physical security measures out for 2 months. After comparing shrink in that time span to historical data for the store and to its sister stores, it was clear that tagging does make a difference. I can guarantee that those executives will never ask that question again.
For more information about Checkpoint Labels, contact us or call 1.770.426.0547
I was browsing the web a few nights ago and came across an article titled, “S.A.Q”. I had no idea what it meant, so I read a bit. The acronym stands for Should Ask Questions. Questions that should be asked, but are seldom brought up. I thought, this would be a great way to tackle some of the challenges small retailers face in regards to product protection strategies. Smaller companies don’t have a large LP department that can test new products and do cost/benefit analyses on security devices. They are focused on running their businesses, while trying to balance ways to limit shrink. So I’ve put together 5 questions that retailers should ask about Checkpoint Labels, but don’t.
1. What can I use checkpoint labels to secure?
Usually this is posed as, “I have a problem with item x, how can I fix the problem and stop shoplifting?” When looking at EAS labels, you really have an endless amount of possibilities to contend with. If you are a grocer, labels can be applied to high theft items like steak and cheese, but can also see use on thousands of other products that you may be having shrink issues with. For other stores, they can be applied to apparel, footwear and virtually any hardline item.
2. How do I apply checkpoint labels to my product?
I wish more retailers would ask this question. I see, very often, a lack of understanding when it comes to security device. Whether they be a simple EAS label, or other more advanced systems, I find that often we are not thinking like a thief. Take for instance, a digital camera. Where would you apply the tag? If you said “on the box”, you’re wrong. If the box can simply be opened, you’ve defeated the purpose of the label altogether. If the thief’s end game is the product, they don’t really care about the box. A little common sense thinking can make your dollar go much further. So when you are applying your labels in the store, make sure to tag the physical product whenever possible and practical.
3. Can the checkpoint label be defeated?
I won’t lie to you. They can be defeated. If you simply tag the box and not the product, then a thief can take advantage of that. I’ve had shoplifters take a knife and cut away the part of the packaging that had the EAS label attached to it. You have to be smart about placement as previously stated. You won’t stop every thief, especially a determined one, but you can minimize those hundreds of opportunistic thieves that will take advantage of a situation should one present itself.
4. What is source tagging?
If you have a great relationship (or you buy a lot) from your manufacturer, you can most likely have them source tag certain products. What that means is that the product will come from the source with an EAS label or tag already attached. This means that you don’t have to spend the payroll cost to do it yourself.
5. Will these tags actually make a difference?
Nothing in life is a guarantee, right? I can tell you that if you use the labels properly and use them as a layer in your product protection strategy, they will absolutely make a difference. We tested whether EAS made a difference a few years back. At one store, we took all physical security measures out for 2 months. After comparing shrink in that time span to historical data for the store and to its sister stores, it was clear that tagging does make a difference. I can guarantee that those executives will never ask that question again.
For more information about Checkpoint Labels, contact us or call 1.770.426.0547
A BUYER’S GUIDE TO PROTECTING MEDICAL EQUIPMENT THEFT WITH THE ALPHA THUNDER TAG
I’ve written hundreds of blogs specifically for my retail partners. While I enjoy sharing stories about shoplifters and the new cool technology out there to thwart them, I had a though the other day as I was getting a checkup at my doctor’s office. When both the nurse, then doctor came into the room they were all using iPads, instead of paper charting. Awesome, I thought to myself. I bet they can see more patients throughout the day as their jobs are more streamlined. My mind wandered straight back to my field though… I wondered if people have ever stolen a tablet. Of course someone has. Someone needs to introduce the medical community to the Alpha Thunder Tag.
Ask yourself this question; have you ever considered the possibility of someone stealing your tablet? On any given day a hospital is filled with patients, visitors, contractors, as well as the staff. Out of all these people in and out all day long, statistically speaking, someone is going to at least attempt to get out with a tablet if the opportunity presents itself. Worse yet are individuals who specifically target hospitals due to the poor security measures in place protecting tablets and laptops. So what can you do to protect your investments in technology? Spend thousands of software to track the device? What about bulky locks and cases? You should consider giving the Alpha Thunder Tag a whirl. They are the go-to protection device for some of the country’s largest retailers. What is this device, though and how does it work?
Have you ever noticed those towers that are at the front entrance of just about every retail and grocery store? Those are part of the store’s EAS (electronic Article Surveillance) system. High theft items have a special tag attached to them, and if the tags are not removed at the register, the towers will alarm when a tag passes through them. It’s very simple, yet highly effective.
The Alpha Thunder Tag uses this same technology, so you will also need to install these towers. A model such as the N10 antenna is incredibly small, measuring only a few inches wide and is practically invisible, so there’s no need to worry about bulky systems! The tag itself simply attaches to your iPad or similar device with some pretty strong adhesive. A plunger mechanism on the back detects any tampering. If someone removes the tag, it sounds an alarm to the tune of 95 dba. Loud enough for anyone around to hear. Additionally, if the tablet is removed from the designated area and the tag passes through the N10 antenna, it will also sound an audible alert, notifying staff or security of a possible theft.
Not only can the system be set up throughout a hospital setting, it’s versatile enough to work in private practice offices and even research laboratories. Not only is it vital that we protect the actual tablet from theft, this simple method can easily keep patient data and extremely confidential information out of the hands of someone with ill intentions.
If the retail can offer anything to our medical counterparts, it would be the N10 antenna and Thunder Tag combo. When used together, it gives you piece of mind to know that your technology will remain in house and out of the hands of criminals. It also gives your patients the peace of mind that their personal information will stay safe and out of the hands of criminals.
For more information about (Alpha Thunder Tag) contact us or call 1.770.426.0547.
I’ve written hundreds of blogs specifically for my retail partners. While I enjoy sharing stories about shoplifters and the new cool technology out there to thwart them, I had a though the other day as I was getting a checkup at my doctor’s office. When both the nurse, then doctor came into the room they were all using iPads, instead of paper charting. Awesome, I thought to myself. I bet they can see more patients throughout the day as their jobs are more streamlined. My mind wandered straight back to my field though… I wondered if people have ever stolen a tablet. Of course someone has. Someone needs to introduce the medical community to the Alpha Thunder Tag.
Ask yourself this question; have you ever considered the possibility of someone stealing your tablet? On any given day a hospital is filled with patients, visitors, contractors, as well as the staff. Out of all these people in and out all day long, statistically speaking, someone is going to at least attempt to get out with a tablet if the opportunity presents itself. Worse yet are individuals who specifically target hospitals due to the poor security measures in place protecting tablets and laptops. So what can you do to protect your investments in technology? Spend thousands of software to track the device? What about bulky locks and cases? You should consider giving the Alpha Thunder Tag a whirl. They are the go-to protection device for some of the country’s largest retailers. What is this device, though and how does it work?
Have you ever noticed those towers that are at the front entrance of just about every retail and grocery store? Those are part of the store’s EAS (electronic Article Surveillance) system. High theft items have a special tag attached to them, and if the tags are not removed at the register, the towers will alarm when a tag passes through them. It’s very simple, yet highly effective.
The Alpha Thunder Tag uses this same technology, so you will also need to install these towers. A model such as the N10 antenna is incredibly small, measuring only a few inches wide and is practically invisible, so there’s no need to worry about bulky systems! The tag itself simply attaches to your iPad or similar device with some pretty strong adhesive. A plunger mechanism on the back detects any tampering. If someone removes the tag, it sounds an alarm to the tune of 95 dba. Loud enough for anyone around to hear. Additionally, if the tablet is removed from the designated area and the tag passes through the N10 antenna, it will also sound an audible alert, notifying staff or security of a possible theft.
Not only can the system be set up throughout a hospital setting, it’s versatile enough to work in private practice offices and even research laboratories. Not only is it vital that we protect the actual tablet from theft, this simple method can easily keep patient data and extremely confidential information out of the hands of someone with ill intentions.
If the retail industry can offer anything to our medical counterparts, it would be the N10 antenna and Thunder Tag combo. When used together, it gives you piece of mind to know that your technology will remain in house and out of the hands of criminals. It also gives your patients the peace of mind that their personal information will stay safe and out of the hands of criminals.
For more information about the Alpha Thunder Tag contact us or call 1.770.426.0547.
