Question: Last week you made it very clear that I need to be more aware about inventory shrinkage in my retail business. I'm ready, so what else do I need to know?
Answer: Yes, good for you. To review, shrinkage (from shoplifting and internal theft) is a huge problem. Nationally, retailers lost at least $34 billion last year to this problem. Some think it's closer to $50 billion. So now, it's become "seller beware." Let's talk about this.
Today we'll look into what items people shoplift, why they say they do it, and some of their methods that you need to know about.
There's no limit to the brazen ingenuity of people who want to get something for nothing. Check this: one of the major local big box stores tells me that in-store theft of wine is a rampant problem. Why? Screw caps. People come in; load some desired items into their cart, then open a bottle of wine in the cart and drink it with a long straw. The empty bottle is then dumped or hidden behind a display before checkout. Same thing happens with prepared food, like packaged sandwiches. People in Loss Prevention call this "grazing."
In 2011, the Bellingham Police Department had 393 shoplifting complaints. The 2012 pace is well above that. Of course this is a tiny fraction of the actual incidents. The perception right now in the local business community is that shoplifting is soaring. Two recent events are likely causes: the ban on plastic bags, and the change in liquor sales.
The National Retail Federation, nrf.com, has recent info on what items are most commonly stolen:
- Pleasure items; like CDs and DVDs, cigarettes, energy drinks, liquor, candy.
- Over-the-counter medications; notably allergy medicine, pain relievers, weight-loss pills, pregnancy test kits, "family-planning" items.
- Small, high-value goods; handbags, cell phones, digital cameras.
Clothing is also near the top, because of the problems with observing dressing rooms due to privacy issues. And it's easy for two colluding customers to do a "toss-over." This is where one hands clothing items over a partition wall to an accomplice, to confuse store personnel.
So why do people shoplift? These reasons were self-reported by those who were recently caught, so bring the salt shaker.
- If I'm careful, I won't get seen. Even if I get caught, I won't be punished.
- Everyone else has done it, so it's OK.
- Your store expects this, and you factored it into your prices.
- I need and deserve this item, but don't have the money right now.
- It's not really a crime.
The true reasons for shoplifting are probably unknowable. Some shoplifters, especially teens, steal on a dare. Others may be in serious need, for example boosting food or children's clothing. Some take items to sell, possibly to support an addiction or a gambling habit.
Ronald Clarke, a criminologist at Rutgers University, has coined a very useful acronym. He notes that people steal items that are CRAVED. This means: Concealable, Removable; Available; Valuable; Enjoyable; and Disposable. This would make a good poster to put in a common area, like your employee break room.
Here are some common shoplifting techniques you need to be on the lookout for.
- Anything held in the hands or carried over the shoulder is suspect. Think about why someone would come into your store carrying a diaper bag, but no baby. This includes a newspaper, a large purse, a knitting bag, or a shopping bag from another nearby store.
- An umbrella carried hooked over the lower arm is an ideal place to drop small valuable items.
- Know about "booster equipment." Ingenuity rules here. A booster box is typically disguised as a tightly wrapped package. In actuality, it has a spring-loaded panel where merchandise can be quickly inserted through a trap door.
- And it gets a little weird. Custom-made "booster bloomers" are worn under bulky pants. They have a stretchy waistband, and leggings which are tied off just above the knees. The booster can quickly drop items down the waistband.
- A realistic but fake arm sling and cast. If challenged to look in, the shoplifter yells something about calling his doctor and stomps out.
- And, very low-tech: the thief cases out the merchandise nearest the door, and also where the store personnel are. Then, grab and run.
Upping the ante a bit, a serious trend is for organized gangs of shoplifters to descend on a community and pick it clean.
Next week we'll look at what you can do about this, and another dark issue: internal theft.
ABOUT ASK SCORE
Submit questions for this column to Business Editor Dave Gallagher at firstname.lastname@example.org. To learn more about other small-business matters, contact the local SCORE chapter at 360-685-4259 to schedule an appointment. For details about the organization, visit SCORE.org.
Ask SCORE is prepared for The Bellingham Herald's Sunday Business section by Bob Dahms, a business counselor with the Bellingham chapter of SCORE.