Shrinkage and loss in Retail Industry

Loss prevention in the retail industry is concerned with thedisappearance of merchandise and currency. Most retailestablishments take a physical inventory annually, while somedo it semiannually. When the count is completed, the differencebetween the actual inventory on hand and what it should be according to purchase and sales records is called shrinkage.The causes of shrinkage are recognized as employee theft,shoplifting, and paperwork error. Other reasons for businesslosses, such as robbery, burglary, and vandalism, are separateproblems. Shoplifting and internal theft are actually untoldnumbers of separate incidents of larceny adding up to billionsof dollars of losses which are not listed in crime reports, exceptfor the relatively few cases where arrests are made.Even though shoplifting is more often publicized than employeetheft, security experts are of the opinion that the in-housethief is responsible for at least 50% of the shrinkage.~ INTERNAL THEFTThe retail industry attracts many unskilled people who work forminimum wages. Whatever the motivation, a fair percentage ofworkers succumb to temptation and steal. Many of these employeescan be persuaded or prevented from stealing. Positive programsof employee relations built around fair compensation, propersurroundings, and employer-sponsored activities can improve moraleand concern for the success of a company. The only way to reachsome employees is through a highly visible security program anda rigid company policy of prosecuting any employee caught stealingPrevention of theft requires simple but sophisticated systems forhandling merchandise and currency, which not only deter butwhich leave a trail of documents when any stealing takes place.One important step that industry can take to prevent or reduceinternal theft is to avoid hiring the potential thief or problememployee to the outset.~ PRE-EMPLOYMENT SCREENINGWhen applying for a new job most people are requested to providesome details about their education and work experience. It is atthis state, before an individual is hired, that industry mustmake the effort to determine whether or not the applicant maypose future problems, including dishonesty. Pre-EmploymentInvestigations are very important and highly recommed.~ DISCRIMINATIONThe Civil Rights Act of 1964 and other laws aimed at guaranteeingequal employment opportunities for everyone have directly affectedthe amount of information that an employer may request from a jobapplicant. Questions about age, health, marital status, arrests,religion, and race cannot be asked. While it is permissible toask about criminal convictions, it may be discriminatory if thecriminal activity in question is totally unrelated to the jobenvironment and if the conviction itself is an absolute bar toemployment.~ CRIMINAL RECORDSSuch background information is usually not available to employers.Most police departments are prohibited by law from disseminatingsuch information outside of official channels. Federal lawprohibits any criminal justice agency that receives federal fundsfrom supplying such information. In spite of the foregoing, suchdata very often does "leak out." Many Private Investigators havingaccess may supply this information with a consent release form.~ FORMER EMPLOYERSIt is standard procedure to make inquiry from previous employersregarding the job applicant. Since it is rare to get other thanpositive responses, the reliability of such information is to besuspected and weighed as a factor with other sources.~ BACKGROUND CHECKSA background check may be done in-house or through an outsideagency. However, since the job applicant is not required tosupply very much personal information these days, it may benecessary to seek other sources. There are extensive accumulations of private information about individuals who have credit cards,bank accounts, hospital records, former employment, or paid taxes.Obtaining such data may present problems with accuracy andinvasions of privacy. Many firms consider it foolish and uselessto pursue these sources, relying instead on the frankness ofpersonal references supplied by the candidate, which is not a verygood way to run any business.~ CREDIT BUREAUSFinancial information about any individual is ordinarily notsupposed to be disseminated except in connection with creditapplications. Since the credit standing of anyone is a goodindicator of stability and other traits, there is no doubt thatsuch information is often sought as part of the screeningprocess. In our metropolitan areas, the major retailers havefor many years participated in mutual protective associationswhere they maintain central records of their shoplifting anddishonest employee cases. These files are used by the member storesas part of the screening of new employees, as well as a backgroundsource when deciding the course to pursue with an apprehendedshoplifter. Since these files fall within the jurisdiction of theFair Credit Reporting Act, they must be continuously purged ofany data that is over 7 years old.~ POLYGRAPHSRetailing is one industry that uses the polygraph to a significantextent both for screening applicants and investigating suspectedcrimes. The continued use of the polygraph in industry hascome under attack in the U.S. Congress and state legislativebodies during recent years. Today, some 15 states either limitor entirely restrict such testing. Conversely there are 19 states which officially recognize the polygraph as a necessarytool for commercial purposes, and they have enacted licensingand regulatory laws. Herewith listed are some of the arguments that have been advancedby both sides in the controversy over the polygraph:1. The value of the polygrapha.Reasonalbe to administerb.Fast resultsc.Licensing generates confidence in examiners and in credibilityd.Dependable findings in most instances2. Obstacles to use of polygraphsa. Claims that it is self-incriminatingb. Violates right of privacyc. Unions oppose and advise members not to sumbit to testing~ OTHER LIE-DETECTION DEVICES AND TESTS In recent years voice-stress measuring devices have been usedwith success in that they have shown strong correlation with thepolygraph in their results. Opponents of lie-detection deviceshave been active in opposing the use of such instruments on thegrounds that they are particularly incriminating, since they cantest for stress in the voice without the subject being awareof it. This stress is the result of physiological changes in the voice. The results are unlike voice prints, which are used forother purposes. There are also a number of paper-and-penciltests available which are designed to predict or measuretrustworthiness and stability. The continued increase in therate of employee dishonesty has created a vast market for anyform of test that can offer reliability in spotting poor-riskapplicants for jobs, But remember some states restrict testing.~ PREVENTION OF MERCHANDISE THEFTThe extent of employee theft can only be approximated sinceinventory shrinkage reflects the losses from all causes. Thereare so many ways that merchandise can be stolen by employeesthat the imagination is the limit. The most successful way tocombat such theft is to prevent or discourage it. A concernedcompany must have thorough systems of control and accountabilityover merchandise from the moment it is received through thevarious stages of preparing it for sale, displaying it to shoppers,and finally handing it over to delivering it to the purchaser.Rigid adherence to these controls requires dedication by executives,supervision by middle management, interest and concern by staffemployees, and some security presence as a form of insurance.Measures that should be taken to prevent some of the common meansthat employees use to steal merchandise are mentioned later. Someof these measurers require the employment of security personnel,and oftentimes their use results in direct observation of attemptsat theft.~ EMPLOYEES' ENTRANCEWherever possible, employees should be required to use adesignated entrance when coming to or leaving work. In largeestablishments this is usually the case. Locker, cafeteria, andlounge facilities should be located in close proximity to the entrance. The time-clock area should be set up between thesefacilities and the store proper. A security person should beposted here. Personal parcels and overcoats, and so on, shouldnot be carried into the selling or stock areas. Anything thatis carried through the time-clock area should be subject toinspection. Female employees may be supplied with a clearplastic purse for personal articles they wish to have with themat work. Employees should be encouraged to keep small valuablesand money on their person. The right to frisk and even searchmay be reserved by a company under certain conditions. Theemployment application should so state, the requirement shouldbe publicized and fully explained, and this practice must beenforced in a nondiscriminatory manner. The rule should alsoapply to repair workers, contractors, salespersons, and otherswho enter the store through this area.~ PORTERSMaintenance people and porters who must work within the store during non business hours should be accompanied by security people.Plainclothes detectives should occasionally be assigned to conductobservations of such work.~ GARBAGEA favorite method of theft is to hide merchandise among therefuse before it is removed from the store. This material mustbe carefully inspected before it is removed.~ STOCKROOMSEmployees can find remote corners to idle time away or to hidestolen merchandise on their persons. Very often they will discardtheir own articles of clothing and wear the pilfered items intheir place. Once the price tickets have been removed, unlessthere is a direct observation, proof of theft is difficult toestablish. Whenever possible the stockrooms should be kept lockedas a security precaution and as a means of keeping employees on the selling floor to improve customer service. Employees shouldrequest identification of any persons entering stock areas whoare not readily recognized.~ KEYS AND LOCKSAll doors should be equipped with strong tamper-resistant locks.Where there are many doors within a structure a master key systemwith changeable cores is recommended. Access to various areascan be provided on an individual basis according to job require-ments. Employees should be cautioned to safeguard their keys. Inthe event of a lost key it may be necessary to change some cores.This is relatively inexpensive when compared the changing locks orcylinders. All keys should be collected and accounted for at theend of the working day, except for those which are used to closeand open the premises. There are many keyless access controlsystems available today which offer computer-related featuresand technology.~ STASHING MERCHANDISEBoxes, packages, and bundles of merchandise may be placed in variousplaces to be later taken away by the employee or a friend. Suchpackages may be found in secure places on the selling floor. Ifrefuse is not thoroughly checked, the garbage containers maybecome frequently used for such thefts. When such caches arediscovered, the recommended procedure is to establish surveillanceover the suspected packages.~ UNAUTHORIZED MARKDOWNSA favorite method of "theft" that most employees regard aspractically guiltless is to purchase articles at self-determineddiscounts. Marking down the price of merchandise at the proper time is an important factor in successful retailing. When markdowns are taken, various records must be adjusted to reflectthe lower value in the inventory records lest a fictitiousshortage be created. Those employees who desire an item at theheight of the season, and certainly before discounts are in order,create their own price changes in one way or another. One wayto discourage such activity is to frequently inspect goods thatare held or laid away for employees. Alert sales people or cashiers may spot such price changes, but it may not be practicalto expect them to deny the markdown to coworkers.~ RECEIVING AND SHIPPINGPlatform and shipping employees can falsify the various receivingand delivery documents. Sometimes this is done in conspiracywith truck drivers. Incoming shipments should be physicallycounted and verified against the accompanying documents. Receiptsgiven to delivery people should indicate any shortages found.Shipments should be verified again for completeness when they areunpacked and processed for the selling department. Valuable oreasily concealable items should be transferred in security binsor racks. Test counts can be done randomly as a securitymeasure. The documents which match the merchandise must be checkedfor detail, particularly as to retail price. Incorrect ticketingwill create shortage whether it is mistakenly or deliberately done.~ WAREHOUSELarge companies may have one or more warehouses where incomingmerchandise is received for storage and transshipment to retailoutlets. Sometimes the ticketing operations are done in suchwarehouses. Theoretically, a warehouse should be easier to controlthan a store from a security viewpoint, since the environment isclosed to the public. Truck drivers should not be permittedwithin the warehouse. Separate facilities should be maintainedfor them outside the perimeter, where feasible. Receivingplatforms and shipping platforms should be physically separated.Cargo documents and purchase orders should be matched, so thatproper bookkeeping is ensured. Cargo areas of trucks should belocked and sealed when transporting merchandise. Drivers shouldnot have access to the goods. It is a good idea to inspect thetrucks from time to time to ensure that they are sound. Withinthe warehouse there should be separate storage facilities formerchandise which is most often or easily stolen. Such areasmay be specially safeguarded with locks, alarms, or even closedcircuit television. If possible, management should reserve theright to search packages and persons. Typical warehouseenvironments are conducive to such activities as organizedgambling or narcotics selling. These practices can easily leadto necessity for theft. If the pushers and bookies can besingled out, efforts should be made to discharge them. This typeof problem is never permanently solved. If management does notstay alert, it will shortly return.~ THEFT OF CASHThe theft of cash also presents a major problem to the retailer. The case thieves are ordinarily those persons whose jobs requirethem to handle money.~ HOW CASHIERS STEALWithout a program of prevention, there are numerous opportunitiesfor cashier theft, among them the following;
1. Helping self to cash from common drawer register
2. Failing to give receipt to customer and voiding the sale after
customer leaves.
3. Avoiding ringing the sale; pocketing the cash
4. Under-ringing the sale; pocketing the difference
5. Failing to close register drawer after each sale
6. Imprinting more than one charge on a credit card transaction;
exchanging surplus charge slip for cash
7. Allowing accomplice to remove cash; reporting the theft later
8. Raising the amount of a check taken from a purchaser;
pocketing the difference
9. Accepting bad checks from accomplice
10. Selling to friends at discount
~ INVESTIGATION OF CASH THEFT Proper and adequate investigation is hampered by frequentemployee turnover in retailing. Very often, by the time aparticular pattern of shortage is detected, the guilty individualis gone. Some investigative procedures which may be usedaccording to modus operandi follow:
1. If shortages exist in common drawer registers, switch cashiers
daily and keep "over and short" records to track individual
performance.
2. Frequent voids, no sales, or reports of till tapping should
initiate surveillance of suspect at work. Results may be
obtained by polygraph examination.
3. Spot checks of cashier's funds during working day
4. Integrity shopping
~ INTEGRITY SHOPPINGThe integrity of cashiers can be tested by means of "honestyshopping." These tests are conducted by specially trained peoplewho pose as customers. Shoppers may be in-house or contractedfrom an outside service. Shoppers operate in different waysaccording to the type of registers in use and the way a store mayconduct cashiering operations. One method is to shop as manycashiers as possible with the expectation that dishonesty willbe detected. Another approach is to select as targets principallythose cashiers who may be suspected for one reason or another. For example, many stores maintain ongoing records relating toindividual cashier performance. Those cashiers who are consistentlyover in cash may be creating the surplus so it can be pocketed.Additionally, shoppers may be given leads by supervisors orother store personnel.~ SHOPPING TEST PROCEDURESThe basic test in any integrity shipping operation is the "evenmoney buy." All other tests are built around this one. Theshopper selects an item and pays for it with the exact amountplus the tax. The idea is to afford the employee who takes thecash an opportunity to pocket it. Therefore the shopper must bein a rush and have no time to wait for a receipt or normalwrapping. In stores where the cashier function is separate from the sales function, an "even Buy" is a bit more difficult toaccomplish. An element of successful shopping is the abilityto later identify the documentation of the "buys" on the registertapes or other sales records. This is accomplished in several ways. The sale previous to the "buy" may be observed by anothershopper. Sometimes and "identification buy" is made after thetest buy, but only if the cashier has done something irregularor suspicious.The "uneven buy" requires that the cashier make change. Thisbuy is made by shopper number two whose principal function isto observe how the money from the "even buy" is handled. The"even buy" may be part of a "double buy," wherein the shopper,on being handed the change from an "uneven buy," suddenlydecides to make an additional purchase. The shopper suggest putting the item in the same bag, hands over even money, andleaves. There can be many variations of these buys. In an"exchange buy" the shopper hesitates in selecting between twoitems. Finally, the cheaper one is chosen and paid for, but atthe transaction is completed the shopper changes to the expensiveone, pays the difference and leaves. Shoppers should mark their"buy" money or record the serial numbers in advance so thatproper identification can be made of the evidence later on.~ MONEY ROOMSA special area for handling and storing cash may be necessary inlarge stores. Cashiers are usually supplied with working funds which are turned back at the end of a shift along with moneyreceived from purchases. The constant counting, disbursing, andreceipt of cash often creates shortages that are temporaryor permanent. While error in these operations may be common,the theft of money by the employees is not rare. Money roomsshould be well constructed and burglar-resistant, if notburglarproof. Alarms should protect the perimeter, the insidearea, and the safes. Holdup buttons should be strategicallysituated. Routine operations should require at least twoemployees in the room. Premployment screening should be particularly thorough for such employees.~ INVESTIGATION OF MONEY ROOM SHORTAGESFollowing are some procedures for solving shortages originatingin the money room.
1. Thoroughly audit the entire room
2. Create deliberate error or shortage to test for reaction
3. Compare individual working schedules against times when
shortages occur
4. Determine life-styles of employees
5. Since these shortages may be substantial, do not overlook
possibility of recovering losses from insurance company. ~ REFUNDINGMost retail stores have a fairly liberal policy of allowingmerchandise to be returned and of refunding the purchase priceby either cash or check. In some stores the refunding is donethrough the selling department, where the merchandise, the priceticket, and the sales receipt are examined and authenticated.An authorization for the refund is issued at that point and givento the customer, who presents it at a service desk where theapproval is issued and payment made. If price tickets orreceipts are not presented with the refund request in suchcentralized operations, the customer is usually directed to theselling department for verification of correct price. Theremust be at least two employees directly involved in any refund,one for examination of merchandise and approval and a second tomake the payout. Procedures must be established to constantlymonitor payouts against related documents and merchandise.Deviations from these systems may be indicators of dishonestemployees. Price tickets should be found properly attached tomerchandise according to company practices. Data on thesetickets should match the merchandise being returned. Manypeople switch to higher price tickets when seeking refunds.Employees, in particular, can do this in comparative safety,since they usually know what sort of information will beaccepted as legitimate for certain merchandise. It is advisable to maintain records of refund activity for each employee forpossible detection of abuses of the system. Computers canprovide such facts to auditors and security departments at periodic intervals. There is an ongoing problem with safeguarding small items of highvalue from employee pilferage between point of refund and return toselling departments. Control records must be maintained for suchitems and special locked storage facilities provided. Supervisorsmust make daily inspections of records and facilities and seeto the secure in-store transfer of the items. Since the refundoperations are particularly vulnerable to employee dishonesty,particular care should be taken in personnel selection. Temporaryvacancies due to illness or vacation should not be haphazardlyfilled. Proper and adequate training of all employees involvedin the refund procedure should be rigid company policy.~ DETAINING SUSPECTED EMPLOYEESIt is necessary to adhere strictly to legal requirements when detaining an employee suspected of theft. Hiding money ormerchandise within the store or on the person is reasonable evidence of intent to steal. Very often, however, the suspectmay offer some farfetched excuse for so doing, and the prosecutoror the court may be of the opinion that a reasonable doubt exists.The safest course of action is to wait until an attempt is madeto remove the property from the premises. The arresting employeeshould be an eyewitness to the actual commission of the crime.A rigid policy of prosecuting all employees caught stealingusually has a deterrent effect on others. Once an employee hasbeen detained and accused of theft, the situation should beconstrued as an arrest. If there is no intention to prosecute,the investigation should be conducted without delay in an efficientmanner. The investigation should terminate with a signed confessionand a release against the company and its employees. The suspect maybe frisked or searched in order to recover the stolen property.If the complaining employee has done the proper job of witnessingthe theft, the recovery of the evidence should not pose a problem.If the detained employee is to be prosecuted, the police shouldbe notified at once and the investigation conducted and completedwithout delay. In some jurisdictions the arrest process is delegated to store security employees who deliver the necessarypaperwork to the police. Most states have passed legislation to protect the retailer in the event of false arrest claims arisingout of detentions to determine the ownership of merchandise, providedthat there was reasonable cause to act and that the investigationwas conducted in a reasonable manner.~ CASHIERSCash shortages, failure to ring up sales, and failure to givereceipts are not proof of theft. Prosecution is not recommendedunless there is a direct observation of stealing and recoveryof some tangible evidence in merchandise or money. Identifiablecash recovered from the person of the suspect is the best kind ofevidence. This is often referred to as a "pocket case." Properquestioning based on observation of highly suspicious actionscan often result in admissions of theft. Without further evidence,the best course of action is to explore the feasibility ofobtaining restitution. Oftentimes, the employee admits tofrequent thefts going back over a period of weeks or months.The amount of money involved can be significant. Very oftenrestitution can be ordered and arranged through the courts. Itis unwise to seek restitution without legal advice.~ UNDERCOVER INVESTIGATIONUndercover investigation has long been used for providingintelligence information and is no less applicable to retailing.With sophisticated retail security, improved training andtechniques, and the utilization of modern technology's latestadvances in equipment and devices, the value and effectivenessof undercover investigation cannot be minimized. As a lossprevention tool, it can provide information to security and othermanagement that is not easily obtainable by any other means.In practice, investigators posing as employees are placed withina firm. This effects their "cover" and should be done through normal placement procedures, with as few people "in the know" aspossible during the term of the investigation. Resulting meaningful information is then accurately conveyed, as quickly aspossible, to those executives who can put it to work. Onceplaced, these investigators then blend and mingle, developingrelationships with their associates for the purpose of locating andidentifying employee dishonesty. This is the primary objectiveunder most circumstances and one which cannot generally beaccomplished by in-house security personnel, because of knownidentities, techniques and so on. Additionally, relationshipswhich are fruitful are evolved over a period of time and requirepatience and planning in developing the confidence of targets orother coworkers. While some information comes from occasionalobservation of isolated spontaneous thefts, the major portion of criminal information is developed over a longer period, afterpurposeful planning of the operative's approach to acceptance,and effective performance. Most information is developed throughconfidential conversation, initially with the use of comments and remarks specifically designed to elicit a response. This, ofcourse, must always remain within legal boundaries regardingentrapment. The loss prevention aspects of undercover investigationapply not only to criminal loss, but also to loss by other means.Loss and exposure to loss in operational areas can be pinpointedthrough monitoring of adherence to policy and procedures,conditions conducive to costly casualty loss, supervisoryinadequacies, systemic deviations, and so on. Also, lossprevention can apply to loss of personnel. Here, loss is generallyinsidious but can have devastating financial effects. This alsoapplies to loss, occasional and isolated as it may be, of publicesteem because of poor customer service or other reasons. Allof these factors contribute to loss, larcenous or otherwise.Loss prevention is vital in each area to insure profitableoperation and to increase the "bottom line." Undercoverinvestigation can be effective in accomplishing this. Ordinarilythe information from undercover is used to develop cases in anindependent manner, so as to avoid exposing the original source.When the information is deemed critical and there appears to belittle or no chance to proceed in another way, the cover may beblown. Causes of business losses, other than employee-related,may be due to shoplifting, robbery, burglary, bad checks, stolencredit cards, vandalism bombings, and arson. Techniques forprevention and investigation of the most prevalent of these crimesare included in this section.~ PREVENTION OF SHOPLIFTING AND OTHER CRIMESThe most efficient way to deal with the problem of crime is totake necessary steps to prevent it from taking place. Althoughit is unrealistic to expect to eliminate all crime, the proper useof people and equipment will have some effect in reducing thetotal incidence of theft and destructive acts. Some ideas are:
1. Security Guards
2. Plainclothes Detectives / Private Investigators
3. Fitting-Room Attendants
4. Shopping Services
5. CCTV Servaillance Systems
6. Employee Incentive Programs ~ SECURITY INVOLVEMENT BY STAFFThe successful security program is expected to prevent theft.Since the commission of crime cannot be wiped out, recovery ofmerchandise is equally desired. There are many retail stores thatdo not have a security staff per se. In such companies thesecurity effort depends on sales help, cashiers, stock persons,and others. Even where a security staff does exist, the totalsecurity effort will be more effective if the other employees areinvolved too. They must be trained to spot shoplifters andtaught the action to take to prevent the loss of merchandise. Ordinarily, these clerks and salespeople are not expected toapprehend wrongdoers. However, if specially trained and instructed,anyone may be expected to take necessary action, including detainingshoplifters. The actual apprehension of a person attempting tosteal merchandise from a store requires knowledge of penal statutesand codes which must be strictly obeyed. lest civil and criminalcharges result from wrongful actions. The safest policy tofollow with all employees, except those specifically employedin a security role, is to design programs aimed at preventing theft.~ AWARDS AND BONUSESMany employees perform better if there is an incentive programthat encourages interest and participation. When a bonus is givento a salesclerk who pointed out a shoplifter, other employeessit up and take notice. While it is reasonable to expect wideparticipation in combating shoplifting, the average worker willhesitate before turning in a fellow employee. Although cashawards for such information are usually larger than shoplifterawards, such incentives are not very successful. Some firmspay bonus money to security people also, since this usually keepsproductivity at a high level. However, this practice has beencriticized as a bounty system leading to over zealousness and falsearrests.~ LOSS PREVENTION PROCEDURESAlthough some shoplifting is inevitable, there are things that canbe done to keep it to a minimum. All employees must be committedto enforcing those of the following procedures that are adoptedby the establishment.
1. Articles of high value and easily pilfered should be safeguarded
under glass or locked away.
2. Article surveillance or chains should be properly used.
3. Merchandise should be returned to stock after showing it to
customers.
4. Displays should be set up so that they do not clock easy
viewing by employees.
5. Before being handed over to purchasers, contents of preboxed
merchandise should be inspected.
6. ID should be requested of any strangers in nonselling areas.
7. Price tags should not be loose or easily removed.
8. Prompt attention should be paid to customers, always.
9. Salespeople should not to turn their backs to customers.
10. Legitimate purchases should be easily differentiated from
other packages.
11. All discarded sales receipts found on floor or anywhere else
should be picked up.
12. Salespeople should be alert to the fact that luggage, when
purchased, may be filled with stolen merchandise.
13. Frequent inventories of expensive or desirable merchandise
should be taken to detect the existence of a problem, so that
immediate measures can be invoked.
14. Premises should not become a hangout. Employees should be
alert to possibility of mass shoplifting.
15. There should be frequent inspections for empty boxes or
containers. The foregoing procedures are but a sampling of the
many steps that can be taken to combat losses. Other parts of
this chapter on loss prevention offer additional recommendations. ~ SHOPLIFTINGShoplifters come from all walks of life, and they may be of anyage and either sex. Shoplifters may be classified accordingto several categories: professional, amateur, juvenile, addict,and kleptomaniac. Many people who steal for the first timedo so on impulse, and if they are caught, there is a goodpossibility that they will quit. On the other hand, those whoget away with theft will most likely steal again, since it becomes easier to pilfer each succeeding time. Shoplifting issimilar to many other crimes in that the lawbreaker will tendto return to the same place where he or she was previouslysuccessful.~ SHOPLIFTING METHODSFollowing are some of the multitude of ways in which shopliftersoperate:
1. Merchandise is concealed in boxes, bags or purses. Professionals
may carry booster boxes.
2. Merchandise is concealed in clothing. Professionals may wear
garments fitted with large pockets or hooks. Oversized garments
may be worn to afford easy concealment.
3. Stolen garments are worn in plain sight and out of the store.
4. Merchandise is carried between thighs and hidden by long
skirt or overcoat.
5. Professionals wrap garments around the legs and tuck them
into tops of socks.
6. Small articles may be carried out hidden in the palm of the hand.
7. Some thieves snatch articles and run out of the store. ~ INDICATIONS OF POSSIBLE SHOPLIFTINGStore personnel should be alert to the following signs that shouldcause suspicion of shoplifting.
1. People wearing overcoats out of season, or raincoats on a
clear day.
2. People carrying boxes, bags, or umbrellas which could be
used to conceal merchandise.
3. Nervous-looking people who are constantly touching the backs
of their heads, tugging at sleeves, or adjusting socks.
4. Exceptionally fussy people who cannot seem to make up their
minds about a purchase, or do not appear interested in purchasing
an article that they have been examining.
5. People who walk around and constantly keep one hand in a pocket.
6. People who come back to the same area of a store several times.
7. People who are busy looking about, rather than at merchandise.
People who appear to be nervous.
8. People who walk into stockrooms or behind counters and have
no business in such places.
9. Men who carry shopping bags. ~ APPREHENSION OF SHOPLIFTERSMany states have enacted laws specifically aimed at shoplifting.Otherwise the crime of shoplifting is covered by the larcenystatutes. Generally, once it has become evident that the intentof the individual is to steal the article, the crime has beencommitted. If the suspect secretes the merchandise inside ashirt or under a dress, it may not be necessary to wait untilthe person exits from the store. However, there are jurisdictionsand there are individual judges who do not agree on this point,hiding that unless the suspect has gone past the last possiblecash register where payment could be made, the intent is notclear and it can be rebutted. Therefore, unless the statute isextremely clear on this point, the safest course of action is tomake the first contact with the shoplifter at the exit. Thestore detective should attempt to keep the apprehension as lowkey as possible. There is less chance of disturbing othershoppers or of creating a physical confrontation when this isdone properly. Store personnel must be alert and watch for theunexpected. The shoplifter may attempt to run, may assault theemployee, or may even pull a weapon. The training of the securitystaff is the key to ensure proper action in accordance withdeveloping circumstances. When guards are posted at or nearexits, they should assist in apprehensions if requested.Ordinarily, the suspect will come along quietly when asked. Ifthe detective has made proper observations, the recovery of stolenarticles should be uncomplicated. Suspects should be frisked forweapons and, when necessary, a complete search may be made. Theuse of handcuffs is recommended when appropriate.~ CHECKSA significant portion of retail sales is transacted by personalchecks. To many thieves, there is less risk in passing a badcheck than in shoplifting. Unless there are meaningful controlsthat are adhered to by employees who accept these checks, thelosses can become staggering. The following guidelines will helpto promote caution in accepting checks.
1. Examples of bad checks
a. Drawn on a nonexistent or closed account.
b. A forged check drawn on a legitimate account.
c. A counterfeit check.
2. Acceptance procedures
a. Accept only personal checks payable to the store.
b. Inspect the check:
1. No postdated or undated checks
2. If out-of-town bank, use extra care.
3. Must be written in ink; no erasures or corrections.
4. Numerical amount and written amount must agree.
5. Should be for exact amount of purchase.
6. Be careful of "starter" checks.
7. Be careful when customer appears unconcerned about price.
8. Company should maintain a listing of previous bad check
passers; consult list
9. Call bank if amount is over a predetermined amount or
out-of-state.
10. If bank is closed, suggest delivery of merchandise.
11. Do not be pressured into accepting check too fast.
12. Require valid identification.
13. Compare signature and photograph.
14. Record all information on back of check.
3. Acceptable identification
a. Two forms of ID should be required.
b. Legitimate driver's license.
c. Licenses (pistol, and so on), permits or ID cards with
photos.
d. Local Bank Card.
e. Medicare cards for elderly customers who do not have
drivers licenses.
Unacceptable identification includes: social security cards,bankbooks, utility bills, library cards, birth certificates, learners' permits, or membership cards.~ INVESTIGATION OF BAD CHECKSIf a bad check is inadvertently accepted, the following proceduresshould be instituted:
1. Insufficient funds
a. Re deposit and notify maker.
b. If still insufficient, request immediate payment; turn over
to collection agency, or debt recovery service.
c. Final alternative is prosecution.
d. Check with police on local practice and procedure.
2. Closed accounts and forgeries
a. Identify the check passer. This may be difficult or
impossible because the check may have been stolen or the clerk
may not recall the individual
b. police reports and notification to banks, motor vehicle
bureau, credit card companies tend to verify the depositor's
statements in connection with the whereabouts of the check.
c. Interview cashiers to get leads.
d. Publicize current names or aliases being used.
e. Communicate with other retailers and the police.
f. Alert refund departments.
g. Prosecute when absolute identification has been made. ~ CREDIT CARDSLosses due to acceptance of lost or stolen credit cards are on theincrease. Suggested procedures which help cut such losses are:
1. Examine card for authenticity; expiration date. Imprinted
name and signature must match.
2. Use terminal or telephone to obtain authorization.
3. Follow instructions according to code. If "hot card," confiscate
if possible. If above floor limit, may need additional ID.
Customer may be advised "cash only".
4. Be aware that lost or stolen cards issued by out-of-state
banks experience unusual time lag in appearing on "hot list".
5. Examine ID carefully; compare signatures.
6. Be wary of customers who appear unconcerned about price of
merchandise.
7. Watch out for customers in a hurry, particularly at closing time. ~ MISCELLANEOUS CASHIER GUIDELINES In addition to adhering to acceptance procedures with checks andcredit cards, employees who handle sales transactions must beconstantly alert to render efficient service, pay attention toprices, and safeguard the contents of registers. Training andinstructions such as the following should cover potential problems:
1. Know the merchandise; prices; number of pieces.
2. Do not turn away from an open register drawer; keep it closed
between transactions.
3. Do not count the contents of register on the selling floor.
4. Do not leave register unlocked; take the key.
5. If unusual amount of cash has been taken in, request it be
collected.
6. If customer claims to be shortchanged, request assistance.
7. Allow only properly identified persons behind showcases and
counters.
8. Be alert to detect counterfeit bills.
a. Portrait appears lifeless and background lines not distinct.
b. Treasury seal may have uneven points.
c. Border lines are not clear and distinct.
d. May be printed on bond paper without red and blue fibers;
or printed with red and blue lines to resemble fibers.
e. Strip in $10, 20,50, 100.
9. Be alert for till tappers.
a. They create confusion, drop change, start an argument,
divert attention while accomplice steals from register.
b. On any suspicion, close the drawer.
~ REFUND OPERATORSSome shoplifters find it more lucrative to refund stolen goodsthan sell them. Very often items that have been purchased with bad checks are converted into cash this way, especially byprofessionals. Some thieves find it less risky to seek a refundfor stolen merchandise without ever leaving the store. Somepolicies which may be established to combat these practicesfollow:
1. Make refunds payable by check in the mail.
2. Insist on price tickets and sales receipts.
3. Verify merchandise and price in appropriate selling department.
4. Examine documents for alterations or erasures.
5. If purchase was made by check, allow time to clear.
6. Make refunds on credit card purchases through account.
7. Steal an item of merchandise, return same item for a refund without
sales slip. ~ CONCLUSIONShrinkage is an insidious illness which does not cure itself.Proper systems will contribute toward prevention of losses, butthere must be constant follow-up and reevaluation to ensure thatwhat was adequate yesterday is still applicable today. Crime ison the march, and new schemes are constantly being devised.Expertise i loss prevention is as essential in today's retail worldas fashion and salesmanship. The merchant has recognized andaccepted the fact the money spent to protect company assets doesits share in providing profits.

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