Poor economy blamed for rise in shoplifting

Survey of 52 chain stores showed 84% experiencing increase in amateur crimes
By YLAN Q. MUI Washington Post
Houston Chronicle
Dec. 26, 2008

WASHINGTON — Retailers have blamed the global financial crisis for a litany of ills over the past year: slumping sales, mass layoffs and bankruptcy filings. Now, they are looking to the economy to explain recent spikes in shoplifting from their stores.

Though individual retailers do not publicly report crime data, a survey of 52 national chain stores released this month by the Retail Industry Leaders Association, a trade group, showed 84 percent have experienced an increase in amateur crimes in recent months. About 80 percent said that organized retail crime has also jumped, and more than half say robberies and burglaries have risen as well.

"Bad guys are smart. People do not give them credit," said Brad Brekke, vice president of assets protection at Target. "They understand odds are either for or against them, and if they see the odds swing in their favor, they will take advantage of it."

Retail crime typically increases during the Christmas season as hordes of harried customers flood stores staffed with temporary — and often untested — employees. Doorbuster holiday discounts and aggressive merchandising, such as stocking more products near entryways, also provide ne'er-do-wells with more opportunities. But retailers and law enforcement say the economic downturn is resulting in more frequent and more aggresive crimes.

Fighting these trends can be an expensive proposition for retailers. According to the Center for Retail Research, a British organization that did a global survey, U.S. stores spent about $12 billion last year to combat retail crime. Many employ security officers to monitor video surveillance cameras through the store. Some companies are testing new technology that can detect when a shelf is cleared of merchandise and alert employees, according to Lee Pernice, director of retail marketing for security firm ADT.

Target is looking at so-called "benefit denial" technology that requires popular products to be activated at checkout in order for them to work, Brekke said, similar to the process used for gift cards. It also has begun using spiderwrap — cables with a built-in sensor — on hot items.

But many retailers are relying on standards such as beefing up security during the holiday season and training employees to spot suspicious behavior. Pernice said companies face a tough choice as they watch sales and revenue slump: Does it cost more to be a victim of crime or to fight it?

Retailers lost an average of nearly $35 billion, or about 1.4 percent of their inventory, to theft last year, according to an annual survey conducted by the University of Florida. During the last recession in 2001, so-called shrinkage rates averaged 1.8 percent. Results for this year will not be available until 2009.

Economic downturns can lead to increased retail crime as law enforcement cuts costs and personnel. Retailers face declining sales, and some are choosing to reduce security staff, according to retail and loss prevention experts. Hundreds of stores across the country are being shut down, and several retailers have filed for bankruptcy protection, scenarios that tend to lure more crooks.

"It's never been as bad as it is now," said David Malefsky, senior vice president at Cambridge Security Services, which works with several national chains. "When people start panicking, they revert to crime."

The financial crisis has drained many consumers' wallets as layoffs mount and 401(k)s continue their freefall. That has driven an increase in so-called "opportunistic" theft from shoppers stealing for personal use or consumption. The items stolen can span a range of categories and cost, from drugstore cosmetics to pricey electronics. Hill said many of the retail thefts he has seen over the past year have been committed by first-time offenders.

"Some people are being forced to make bad decisions," said Joe LaRocca, vice president of loss prevention for the National Retail Federation, a trade group. "There is no right reason to steal from retailers."












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