Retailers wary of shoplifters during holidays

 

By Lisa Eckelbecker TELEGRAM & GAZETTE STAFF 

As retailers cater to customers during the holiday shopping season, they're also guarding against some visitors they'd rather not acknowledge.

Thieves.

Retailers stand to lose billions of dollars nationwide this holiday season to theft, errors and fraud, and a portion of that will likely occur because of outsiders bent on walking out of stores with unpaid goods.

“Historically, we've noticed that those sort of things do pick up this time of year, said James J. Hurley, police chief in Leicester, where Wal-Mart Stores Inc. operates a Walmart superstore.

When merchandise goes missing between manufacturer and a store cash register, retailers call it “shrinkage.” The National Retail Federation estimated that shrinkage accounted for 1.58 percent of all retail sales in 2010, or a loss of about $37.1 billion for retailers.

Dishonest store employees get the blame for nearly 44 percent of shrinkage. Administrative error can account for nearly 13 percent of shrinkage, and vendor fraud for 5 percent. Some shrinkage never gets explained.

Then there's shoplifting, which caused about 33 percent, or $12 billion, of shrinkage in the United States last year.

If a shrinkage rate of 1.58 percent were to hold in Massachusetts during November and December, when retailers are expected to ring up $10.9 billion in revenues, the amount lost could add up to $170 million.

Thievery can take many forms, according to local police chiefs. Individual shoplifters may slip something into a pocket or bag and walk out. Sometimes a shoplifter will simply load a large boxed item, such as a television set, into a cart and walk out as if the bill has been paid.

Other times, thieves will pull an inexpensive boxed item off a shelf, open it, remove the merchandise, load the box with more expensive goods, close the box and check out, paying a fraction of the value of the goods. Also, those thieves who do not sell stolen property may try to return it to stores.

“Basically as a retailer, what you're faced with is from Thanksgiving to Christmas you're chasing shoplifters,” said Kevin M. Plante, chairman of the loss prevention committee of the Retailers Association of Massachusetts, a trade group. “Then after Christmas, you're dealing with return fraud.”

Organized rings of shoplifters pose another challenge, police chiefs said.

“We've had organized groups of shoplifters coming up from the New York City area in the past. They hit all the malls in the New England area,” said Mark F. Leonard, Marlboro police chief. “We've actually found maps, malls highlighted on maps that they have.”

Shoplifting remains a tough topic for retailers. Few want to discuss it, out of concern about alarming shoppers. They also do not want to reveal their loss-prevention measures or the number of security workers they have in place.

“Typically, due to the nature of security, we don't divulge any numbers,” said Sheila Hennessy, area mall marketing director for Simon Property Group Inc., the operator of malls in Worcester, Auburn and Marlboro.

The Retailers Association of Massachusetts has unsuccessfully pressed state lawmakers for several years to pass legislation that would allow shoplifting rings to be prosecuted as criminal enterprises, according to Mr. Plante. The trade group has also been working with mom-and-pop retailers that might not have loss-prevention resources, he said, and encouraging law enforcement officers to view shoplifting as a serious crime that can have links to organized crime, money laundering and even terrorist activity.

One of the best deterrents to shoplifting is an alert store employee who greets customers, according to police.

“To me, a good employee can save a company thousands of dollars in losses by being alert, by being customer friendly, and by know what's going on around them,” said Chief Hurley.

Still, no measures are foolproof, according to Mr. Plante.

“Retailers understand that 99.5 percent of our customers are honest. We should never make our policies for the minority,” Mr. Plante said. “When you put stuff out on the shelf and you let the public come into your building every day, there's going to be an assumption you're going to lose some of it.”