Shrinking Your Shrinkage Part 2 External Theft

Tuesday, December 23rd, 2014
Stephen O'Keefe

Stephen O’Keefe

Before getting into preventative measures specific to external theft, we should first reiterate one of the main points about internal theft from Part 1, as it is also one of the major deterrents of external theft: employee engagement.

The way in which employee engagement deters internal theft is somewhat obvious because, as Stephen O’Keefe succinctly put it, “People don’t steal from people they like.” The way in which employee engagement
deters external theft is a little more nuanced, but still fairly self-evident. Essentially, engaged employees are more alert and therefore more likely to notice if something is missing, notice a customer acting suspiciously, and more likely to act proactively to protect the interests of the store.

“I happen to buy a lot of guitars and so I know that [employee engagement] is a huge thing [in MI stores],” says O’Keefe, who holds the title of VP of operations for the Retail Council of Canada and has 29 years of experience in retail loss prevention. “I bought a Taylor guitar from Cosmo Music in Richmond Hill, ON and it had been sitting there for a couple of months. It was a one-of-a-kind Hawaiian koa, a really nice guitar. As I was going to the checkout, I had two separate staff members come up to me to tell me that they were disappointed to see that guitar go because they enjoyed playing it so much. The shopping experience was not like buying a pair of jeans; it’s very personal. So if anybody ever tried to steal that guitar, I’m sure they would be all over him because they love the product and want to protect it.”

A major convenience about deterring external theft is that the most effective method is something most retailers are already doing, whether they know it or not. Prompt and courteous customer service is the absolute best way to prevent theft. This begins the moment someone walks in the door. Where a legitimate customer desires acknowledgement, a thief desires anonymity.

Dean Correia

Dean Correia

“Sam Walton, when he started Walmart, implemented the Walmart greeter for one reason and one reason only, and that is to deter theft and robberies,” begins Dean Correia, principal at Correia Security Resources with 22 years of loss prevention experience, including work with The Gap, Starbucks, and Walmart. “He knew that shoplifters and robbers wanted to come into the store unnoticed and leave unnoticed. So absolutely, that greeting and the ‘Hi, can I help you?’ is the number one deterrent.”

Along those lines, employees should be on the sales floor and circulating the store as much as possible. It is easy to get sidetracked by chores in the back room, but the presence of staff is a major deterrent. Additionally, in a small store, it is easy for things to get crowded, shelves and hangers to be packed to maximum capacity, and for high shelving to be a solution to a lack of floor space. Floor layout and shelf height, however, can dictate how easy of a target the store is for thieves. “Ideally, if you’re standing in one corner of the store, you should be able to see every other corner of the store easily. So your merchandise racks should not be taller than six feet,” says Correia. He points out that in a neat and orderly store, it’s easier to notice if items are missing and that a dimly lit store can also be a haven for thieves.

The most obvious form of deterrence is security cameras and there are some basic guidelines that govern their effective use. First and foremost, both Correia and O’Keefe explain that retailers should place their cameras in the open and ensure they’re easily seen. Cameras are as much about deterrence as they are about evidence collecting; however, Correia advises against using dummy cameras.

O’Keefe does endorse the use of camera domes, which clearly indicate that a camera is present but conceals the direction that the camera is pointing. It has the double-sided benefit of telling would-be thieves that there are security cameras present while also making it hard for them to confidently avoid their view.

As for the recordings caught on those cameras, there are varying theories regarding how long they should be kept for. “Most systems will automatically keep that on file for 30 days and I think that’s plenty because if you’re not finding out about it instantly and want to review it in 30 days, then there are a lot of other problematic issues,” says Correia. That said, O’Keefe advises retailers to seek independent advice on the length of time they should keep recordings because the type of camera in use could dictate the retailer’s obligations. For example, O’Keefe mentions PCI compliance regulations for companies accepting credit cards, which could dictate the length of time security footage of the cash register area must be kept.

Of course, the great limitation of security cameras is that they can only catch a thief after the fact and even then, the footage of someone stealing is usually only seen if there was suspicion and, therefore, reason to review the footage. So wouldn’t it be better to spot the thieves before they actually steal something? Of course, and that is why employees should be taught which mannerisms and behaviours to look out for.

There are some classic red flag characteristics, such as the mom with a baby buggy and no baby or the man wearing a heavy coat in June. One of the key characteristics to look for, says Correia, are people looking nervous or who are paying more attention to employees and other customers than they are to the products. “Typically, if people are making a large purchase, they will ask about features and benefits, but shoplifters are going to be more concerned with where the cameras are, where the mirrors are, and where you are than
anything else”

As well, O’Keefe explains, modern loss prevention techniques have begun focusing more on the behaviour of legitimate customers because understanding their behaviour will raise red flags when another’s behaviour deviates from the norm. “What happens is when the abnormal behaviour of a shoplifter takes place, you don’t have to put your finger on what exactly it is; you get a gut feeling and a reaction that this is something outside of the norm,” explains O’Keefe.

So what happens if you or a staff member notices someone concealing a product or acting suspiciously? First, O’Keefe says, you want to send the message to the person that you have seen them without explicitly accusing them of stealing. There are two reasons for this. First, you do not want to put yourself in harm’s way if the would-be thief lashes out when confronted. Secondly, a wrongful accusation could result in a civil action against the company.

For this reason, both O’Keefe and Correia say that one of the primary ways to respond to someone who you’ve seen pocket an item or who is acting suspiciously is to engage in “aggressive hospitality,” or put another way, overwhelm them with customer service.

“To exercise aggressive hospitality is to go up to a person and say, ‘Hey, I’ve been watching you for the last five minutes and it looks like you might need some help looking for something. Is there something I can help you with?’” explains O’Keefe. “You’ve told them indirectly that ‘in the last five minutes I’ve seen you steal drum sticks.’ So you want to give the person room to dump that product because you don’t want to be in a situation where you get into a confrontation.” O’Keefe says that the benefits of this approach can be two-fold. First, you’re greatly decreasing the chance they’ll walk out the door with those drumsticks. Second, you may actually convince them to purchase the drum sticks because they now feel the need to prove their innocence. You can actually get a sale out of the would-be thief.

Many employees may not be comfortable confronting a thief in any way. For this reason, staff training that recreates these various scenarios is recommended. Act as the thief or suspicious customer and teach your floor staff how to apply some aggressive hospitality. Explain to your staff the risks of physical confrontation or civil liability if they expressly accuse a person of stealing and why overwhelming the person with customer service is the best approach.

No store can prevent all thefts unless they have every product under lock and key, and that is obviously counterproductive to making sales. But with some basic loss prevention best practices, you can ensure your store is not an easy target.

Michael Raine is the Assistant Editor of Canadian Music Trade.