The figures, as always, are alarming.
According to the latest “National Retail Security Survey” from the Security Research Project at the University of Florida, American retailers lost approximately $33.6 billion in 2003 to inventory shrinkage, the vast majority of which was caused by theft.
And that’s not counting crimes that do not affect inventory, such as missing cash and check and credit card fraud. Those cost American retailers an additional $2 billion last year, according to the survey.
Survey respondents reported that 47% of their inventory shrinkage was due to employee theft, 32% came from shoplifting and 6% from vendor fraud. Of employee theft alone, the report says, “there is no other form of larceny that annually costs American citizens more money.” The survey goes on to report that retailers of wine, spirits and beer reported even higher rates of employee theft. Those retailers in the survey reported that 65% of their inventory shrinkage was due to theft by employees.
But shoplifting is nothing to sneeze at, either. According to the survey, American retailers lost $10.7 billion to shoplifting in 2003, which is about the same amount that the nation loses to auto theft each year.
Long story short, if you’re running a retail operation, you’ve been stolen from.
Just ask Joe Gomes, manager of Blanchard’s, a busy beverage-alcohol store in the Boston suburb of Allston. What kind of crimes has Blanchard’s experienced over the years? “All of them,” said Gomes.
It was a wave of shoplifting several years ago that first spurred Blanchard’s to get tough on crime. “It was very serious,” reported Gomes. “These were groups and they were aggressive. If you confronted them, they’d attempt to fight. We had a number of fights in the store and my life was threatened on a weekly basis.”
What stopped the problem? “As soon as the first person was arrested — and we made sure to be there, in court, so they’d get put away — it stopped,” said Gomes. “For a while, anyway. Every few months, a new group would start, but every time someone got arrested, it would stop.”
The effect, however, was cumulative. Gomes made it a point to press charges and show up for the resulting court appearances. Many times, however, defendants would postpone, reschedule and delay court dates, hoping Gomes and Blanchard’s would give up. They didn’t.
Establishing A Rep
Blanchard’s succeeded in establishing a reputation for itself among shoplifters. The last time Gomes had to go to court — and he had to go four times because the defendant kept postponing — was two years ago.
The WJ-HD300 (left) is Panasonic’s latest digital video recorder (DVR); the WV-CF224 vandal proof dome camera (below) is commonly used in retail applications, especially where there is heavy traffic.
Yet even for the pro-active Blanchard’s, as for all retail operations, the possibility of crime is ever-present. There will always be criminals and they will always be thinking of new ways to make a buck. Just a few weeks ago, Blanchard’s was the victim of an organized burglary ring that has struck several retail establishments in the Boston area. “They travel in stolen cars. They kick in your front door and they steal thousands of dollars worth of cigarettes,” Gomes reported. “Even though your alarm goes off, they are in and out in less than 90 seconds. They wear masks and hoods so you don’t get video of them, and since they are in stolen vehicles, they can’t be traced that way.”
So, what’s a retailer to do?
Crime is sort of like cockroaches. You can’t completely eliminate the problem. Constant effort can, however, keep it from taking up permanent residence in your store.
And some of the best deterrents remain the good old-fashioned ones, say retailers. For employee theft, retailers cite screening of new hires and tight cash policies at the point-of-sale. They take measures to protect their operations in vulnerable places, such as at the back door, and at vulnerable times, such as near the change of shifts for cashiers, when an employee who has been skimming money from the register — selling goods without ringing them in — has to take that extra money out of the cash drawer. Many employ professional shopping services or even their own friends and family to pose as customers to watch how the cashiers ring their purchases.
Good lighting and visibility deter both would-be robbers and would-be shoplifters.
Many retailers invest in security guards during especially busy times, such as holidays. Brian Moore, owner of Kappy’s, a three-store operation headquartered in Medford, MA, uses off-duty or retired police officers during those busy times. “They are definitely a deterrent,” he said.
As are the sight of cameras in the store. Any cameras. One age-old trick, used by many retailers, is to install dummy cameras, to make their store’s surveillance system seem even more extensive than it is.
Many retailers put a display monitor at the entrance solely to impress upon people that they are being watched. At Kappy’s, a sign next to the monitor further states that the store is taking measures to prevent shoplifting. Moore believes that the cameras also dissuade would-be burglars. “Break-ins are somewhat sophisticated. I think they do case your store beforehand and an active camera system does act as a deterrent,” he explained.
And more than ever before, technology can help deter, prevent and catch retail crime. “The technology now is absolutely incredible,” said David Bitton, chief operating officer for Supreme Security Systems, the largest independent security firm in New Jersey. “The functionality, even for the smallest retailer, is amazing. Right now, a digital surveillance system, using color cameras, providing much higher quality images, costs less than what a black-and-white camera system, with a video recorder, cost five years ago.”
Digital Recorders Popular
Digital recorders are becoming standard. According to the “2003 National Retail Security Survey” from the University of Florida, almost three-quarters of all the responding retailers reported using digital video recording systems, an increase of approximately 25% from the previous year.
Unlike their predecessors, VCRs, digital recorders do not use tapes. Images are stored digitally, either on hard drives within the recorders themselves or on a PC. This makes them much easier to use. No one has to remember to change the tape. No one has to organize the tapes. Most often, a digital recording system will store images until it runs out of space on the hard drive it is using. Then, it will automatically begin to record over the oldest images first. At the Kappy stores, for instance, the digital systems will store images for 30 days before they are overwritten. “And of course, you can go to an image and burn a CD of it, if you are going to need it,” said Moore, who recently did just that to aid the police in their investigation of a suspect in a case that did not involve Kappy’s itself.
Digitally recorded images are easier to search than those on videotape. Rather than play through an entire recording, a retailer can enter a time and be immediately brought to the image wanted. At Kappy’s, for instance, Moore will often watch specific time periods, such as the half-hour before the cashiers’ shift ends.
Digital systems can also allow for remote viewing. Central Avenue Liquors in Jersey City, NJ, is a 4,000-square-foot store, specializing in wine. The operation, a client of Supreme Security Systems, uses a 16-camera digital system. “I can dial in from anywhere, from home, say, and shuffle through all the cameras, seeing what is going on in the store,” said Neil Stolz, Central Avenue Liquors’ vice president.
Supreme Security’s central station monitors alarms for fire and life safety, intrusion and industrial processes.
“These camera systems, they’re not just good for security, they can be a fantastic management tool,” said Bob Schneider, sales manager at Supreme. “You can see if your employees are doing the right thing, how they’re interacting with customers, the ebb and flow in the store when you are not there.”
The latest surveillance systems also allow more choices when it comes to when and how they record. They can also be set to record only during certain hours of the day. They can be set to record only when they detect motion, or even only when they detect motion in a certain area within their view. For instance, using the system’s software, a retailer can set a camera to record only if there is motion in an area around the safe in the back office.
Two new Sony products include the SNC-RZ25N (top), a pan-tilt-zoom camera with a day/night function and a motion detector, and the HSR-X206 Hard Disk Recorder.
Sony has introduced “all-in-one network cameras,” starting at $300. These cameras contain built-in web servers and network interfaces. When contacted by a PC using a standard web browser, these cameras allow for remote viewing. Sony’s SNC-RZ25N pan-tilt-zoom camera, priced at $1,600, has a day/night function which can be set to produce images in color during daylight conditions and clearer black-and-white ones at night. This camera, which is equipped with a motion detector, can be set to send an alarm email, with the resulting recorded image attached, to a specified email address.
Panasonic has taken a different direction with its digital systems. Rather than use a personal computer to store images, many Panasonic recorders contain their own hard-drives on which the images are stored. “PCs are vulnerable to intrusion attacks, hardware failures and over-utilization,” said Steve Surfaro, manager of the enterprise projects group at Panasonic Security. He pointed out that Panasonic’s dedicated digital recorders have multiple hard-drives, most typically four, and can have up to 26. “If one hard-drive fails, the others can reproduce images from the failed one,” he said. These dedicated hard-drives can also store larger, more detailed images than a PC, he explained. “Each hard-drive on our recorder contains 250 gigabytes of space,” he said. “That’s 25 times the storage of a typical laptop.”