A male shoplifting suspect has been coming into Store 153 three times a week for as long as anybody can remember. Store management has even attributed this guy as a major cause of the store's shrink woes that have put them on the corporation's "target store" list for the last two inventory cycles. As the store's loss prevention agent, you have tried to stop him in the past, but it seems like you have always been just one step behind him and unable to make the shoplifter apprehension.
"Today is going to be different," you say to yourself.
You can feel it. Today he is finally going to get what's coming to him, and, more importantly, your apprehension dry spell is going to end. No more excuses needed for the boss. Today you are going to be stopping the shoplifter that nobody else has been able to get.
You have spent the last ten minutes following the suspect through the store, tracking him carefully from the moment he entered. You know and understand the steps of the apprehension process. You have observed him approach, select, and conceal multiple computer accessories that you estimate to be worth over $200.
You never lose sight of him. He definitely still has the merchandise as he passes all of the open and operating registers, failing to declare the merchandise in his coat.
What happens now? How have you presented yourself? Did you run up and grab his shoulder? Did you walk past him to approach him from the front? Were you professional, yet firm? Were you nervous and unsure, or perhaps a bit aggressive and confrontational? Does the shoplifter run? Does he swing at you? Does the shoplifter return to the LP office willingly? Does he produce unpaid merchandise when asked?
The safety of the LP agent, customers, and the shoplifter, as well as thousands or even millions of dollars in potential litigation, are all at risk and dependent upon the answers to these questions during an apprehension scenario. If any portion of this scenario is handled incorrectly, even just slightly, the results could be inconvenient, expensive, or even tragic. Even if everything was handled correctly, was it worth the risks?
Is Stopping the Shoplifter Worth the Risk?
Anyone who has worked in the LP industry for more than ten years has probably seen some significant changes in loss prevention processes and technology. We have seen evolutions from analog "still" CCTV cameras to digital PTZs to facial recognition security cameras, from dusty VCRs to DVRs with remote access, and from padlocks to RFID to sensor fusion. In addition, exception-based reporting programs and advanced prescriptive analytics have evolved into enterprise-wide data-mining systems that are helping to diagnose shrink issues throughout the store.
But one aspect of the industry has not evolved over the years. One process that remains essentially unchanged over the years is the shoplifter apprehension. Regardless of the new technology or technique used to get to the point of detention, once LP agents get outside the store and are face to face with the suspect, the process is about the same as it has always been. They are unarmed, unequipped, and often alone. Their job then requires them to confront an unknown suspect about a crime that has just been committed. These facts have remained the same since the first shoplifter was detained many decades ago.
So emphasized is the need for productivity that some companies still base loss prevention associate reviews and performance metrics, if not entirely, at least in part, on apprehension statistics. Raises, promotions, and even continued employment are often contingent upon agents' ability to produce stops and apprehend shoplifters.
The typical metric of performance assessment involves "quota" demands, though that term is often avoided strongly. Instead, a more politically correct description is used—hours per apprehension (HPA), that is, hours worked divided by number of apprehensions made during the week, month, or year. Some companies go so far as to mention specific "goal" numbers, which are usually around 17 or 18, meaning one apprehension for every 17 or 18 hours worked.
Aside from mistakes by the LPA that lead to a conflict with a shoplifting suspect, there may also be unknown variables in play pertaining to the suspect. Even if the approach and confrontation by the LPA is "textbook" and professional, any of these variables could result in a "simple" shoplifter apprehension escalating to something much more serious. For example, the subject could have an active arrest warrant, could be in possession or under the influence of a foreign substance, or could be experiencing a feeling of desperation with nothing to lose.
A significant number of the LP professionals interviewed for this article believe that violence in shoplifter apprehensions for whatever reason is increasing, leading to more injuries and even deaths of, not only, LP personnel, but customers and shoplifters as well.
In 2012, the National Retail Federation released results of a survey of their members that found shoplifting incidents turn violent 13 percent of the time. You can still find examples of apprehension-related violence in our Breaking News posts on a regular basis.
Many LP departments were forced to drastically cut payroll with the economic downturn. This may have been a contributing factor to apprehension-related violence. In many retailers, departmental cuts led to only one LP agent working at a time. It has reduced options for the LPA in acquiring help from the store teams.
Being alone, the scary feelings, the rush of adrenaline–all of those factors contribute to poor decision making and potentially disregard of no-contact or non-apprehension policies.
Consider the scenario presented at the beginning of this post. The LP agent actually watches a crime unfold, and then approaches the shoplifter alone immediately after the fact, when the suspect's emotions and adrenaline are probably running at their highest. Anyone with any foresight would probably agree that this is creating a situation fraught with potential disaster.
Even police officers rarely have the opportunity to see a crime through from occurrence to detainment, at least not with the same frequency that LP agents do. Police officers typically arrive after the crime has taken place and are well equipped with batons, handcuffs, pepper spray, actual arrest powers, side arms, and plenty of backup. The LPA intervenes during the crime and often has nothing more than a walkie-talkie or cell phone for backup.
Traditionally, loss prevention programs were built on the foundation of shoplifter apprehension. This function was leveraged as one of shrink reduction, not one of crime prevention or punishment. It is the very job function that led to our industry's creation. In an earlier time, when we didn't have strong operational knowledge, data analysis, or predictive modeling capabilities, spending our time and resources on this function may have made sense. But does it make sense now? Does stopping shoplifters have the kind of impact on shrink that we once thought? Again, the answer is no.
The impact of shoplifting and the apprehension of offenders on shrink is still an open question and often a topic of heated discussion. Ask twenty different members of the LP industry what percentage of their shrink issues can be attributed to shoplifters, and you will likely get twenty different answers.
In a 2012 poll, more than 70 percent of participants placed shoplifting at less than a quarter of their yearly shrink. Most of these professionals agree that shoplifter concerns vary with different retail models, but that regardless, the actual impact is a small fraction of yearly shrink when compared to other causes. Add to this that we are probably only actually apprehending a small fraction of that small fraction, and questions can be raised about the necessity to focus on shoplifting at all.
According to recent retail theft statistics, retailers show a figure of approximately $48.9 billion in shrink for 2016, with an external theft apprehension recovery figure of just over $120 million. This comes out to less than 1 percent of total shrink. One percent! If this is accurate, this is a staggering statistic. Even when a substantial margin of error is factored in, this data does not support the philosophy of any loss prevention program that spends the bulk of their time and capital investing in the apprehension of shoplifters. And when the high control risks for injury, death, and litigation are thrown into the equation, it makes even less sense.
In analyzing a 2012 report developed by Merchant Analytic Solutions, if we credit shoplifting (external) as roughly 24 percent of yearly shrink, consider all of the control risk that is associated. Now look at the 76 percent of other losses. These represent the bulk of our concerns and have the lowest risks associated with mitigation. As an industry, we allocate 70 to 80 percent of our budgetary distribution toward the high control risk, low-impact factor of external theft. How does this make sense?
There is some truth in that quote. Shoplifting is an easy-to-identify, easy-to-blame occurrence that happens in every retailer. The gut feeling for many in retail, especially operators, is that shoplifters are the primary cause of shrink. Even though we have multiple data with colorful pie charts that say otherwise, shoplifters still somehow get top billing. Perhaps then, just showing the pie chart isn't enough.
More often than not, something along this line is the default answer, and often through no fault of the store manager. They may know that internal theft ("My employees won't steal from me."), administrative errors, and vendor issues contribute to shrink, but not to what extent. Perhaps they also have not been trained on how to actually diagnose and fix the other 76 percent of their losses. So what they are left with is what is happening right in front of them—shoplifting.
Wouldn't it be nice if the next time you ask that store manager about shrink, they answered in the following way? "We had to rush through our seasonal change over after Christmas, and, as a result, our price-change processes and overall pricing integrity has gone by the wayside a bit. This has led to a tremendous influx of SRAs at the front registers, manifesting themselves as line voids, price modifications, and generic SKU entries. This could have led to hundreds, if not thousands of dollars in deteriorated margin and shrink across multiple SKUs in a number of categories and departments. But my LP associate caught it, and now we are working together to ensure that the issue is corrected." This would be a welcome change, no?
These decreased pressures result in a decreased risk of injury, death, and/or litigation in shoplifter apprehensions.
Some retailers are at the forefront of this evolution in LP culture. Consider the results of a Fortune 25 specialty retail chain that began undergoing a shift in culture in 2002 with excellent results. The company focus–not just LP–was shifted from an apprehension-driven external-theft mindset to one of operational knowledge and holistic vision. The program was centered on the mitigation of SRA (sales reducing activities) and their operational causes.
This retailer did not forbid external apprehensions completely, giving the option to the store management team, but only if they felt they had no alternative. The company adopted and enforced a no-touch, no-contact policy, as well as a stringent product-protection, theft-prevention program. They reviewed their LP team based on a combination of overall shrink numbers, SRA mitigation, and company performance.
As a result of these changes, over the next five years, this retailer saw a 94 percent improvement in shrink (over $800 million), 11 percent improvement in gross margin, and an impressive 85 percent bump in net profit. The shift in LP focus had a tremendous effect.
Similar culture changes are being tested in other forward-thinking retailers worldwide. Access to data across the entire business enterprise, as well as our ever-improving abilities to analyze and interpret it is giving us a much more holistic view of loss prevention's ability to control shrink. Maybe this is leading us toward having more influence on the 76 percent of shrink that is controllable, rather than having to place quite as much risk, emphasis, effort, and expense in trying to manage the uncontrollable 24 percent.
Your department and company need to consider how much impact shoplifting is actually having on profits–and then react accordingly. There are other aspects of shrink occurring in your buildings that contribute to the bulk of your shrink woes. These aspects are more controllable and much safer to address.
Us shoplifter apprehension as a last resort.
Institute and enforce a zero-tolerance no-chase, no-touch policy for all employees.
Anytime labor reductions necessitate a cut in LP payroll, revisit and revise safety practices with the remaining team members.
Encourage a "buddy system"—could be manager, floor associate, uniformed security—to avoid LP agents making shoplifter apprehensions alone.
Hire LPAs with good business acumen and the ability to learn company operations as well as theft mitigation.
Ensure that new hires are aware of the differences between working in law enforcement and working in loss prevention.
Ensure that they are capable of always making decisions that are in the best interest of safety, shrink mitigation, and the overall company brand.
Expose LPAs to category, department, and/or SKU-related shrink results, and ensure that their focus is prioritized appropriately.
Encourage the practice and recognize the success of prevention technique recoveries as a part of the LPA job description.
Train and require continued training on all facets of the business operation, including perpetual inventory process, price changes, markdowns, seasonal changeovers, DSD and receiving processes, POS system operation, SRA analysis and mitigation, and others.
Use shrink results as the LP report card. Review and promote LPAs on their ability to impact shrink through productivity and a combination of these measures. Their success and the shrink success of their stores or spans of control should go hand in hand.
On this subject, the bottom line does not refer to company profits. Be safe. And remember that nothing in your store is worth your life or anyone else's.
This article was originally published in 2012 and was updated July 18, 2018.