Nationwide retail theft, deterrents and the determination of risk - Essay Example

?Nationwide Retail Theft, Deterrents and the Determination of Risk Prior Learning Portfolio – Analytical Essay Two James Longobardi Introduction In my introduction essay I examined the factors that brought me to my current role as the manager of the Security and Loss department of Best Buy, what drew my interest to the area of loss prevention and security and the study I have done in the field of security. My first analytical essay considered three factors in detail loss prevention within an individual store, internal theft/corporate corruption, security action plans and physical security. All of these factors have played an important part in my role at Best Buy, allowing me and my security team to work effectively to minimize theft within the store. This essay will examine an additional two factors which play a large role in within store security. These are electronic systems for the prevention and deterrent of theft, and the use of risk assessments. In addition I will examine the nationwide effect of loss as a result of retail theft. I will link these factors to my role in Security, and explain how these are important both in general and in my own specific field. The current economic environment makes effective loss prevention more important than ever. The worldwide economic environment has been struggling in recent years as a consequence of a global economic crisis . This has resulted in the decrease in available finances for many people and markets. The financial crisis has had widespread effects across all sectors of the economy. For example, consumers have been faced with a lower amount of income, decreased job availability and an increased cost of living, while employers have found it necessary to lay off staff and tighten their margins to ensure that they remain profitable . Throughout the time the United States economy has suffered significantly, with the situation for many people across the country becoming desperate. Although the economy is slowly recovering, many people still struggle in obtaining the necessities required to survive. One consequence of this is that rates of theft have significantly increased and many stores have less available staff to monitor security . A second effect of this is that it is becoming increasingly important for companies to limit their spending and increase revenue. Loss prevention significantly increases the company income, as the amount of money that is lost through theft can be high. The use of security systems is especially useful in this area as they are able to significantly reduce the number of staff that are required for security, and often increase effectiveness also . Making these changes now is important, as there are concerns that the country will continue to struggle economically. There is little change in the job market, and many people continue to struggle financially. Regardless of whether the economic climate improves in the near future or remains difficult the need for loss prevention remains a priority for any retail business. Managing Theft There are two general approaches to managing theft within a store. They are not necessarily mutually exclusive, but generally a store will focus on one of these while putting only a small amount of effort on the second. The first approach is the use of plans, procedures and philosophies in place which focus on apprehending thieves and prosecuting them. The second approach is to focus on preventing theft from occurring in the first place. Both aspects are important to the management of loss within a business, and they can co-occur within an organization. Businesses generally focus on one of these two approaches as they require substantially different methods and training. In addition, both approaches have significant financial cost. . Each approach has its benefits, and which is most efficient depends on the type of organization in which it is being applied and the socioeconomic environment in which the particular store is centered. The concept of a brand is important for organizations. Many organizations such as Best Buy promote a specific image, and as a consequence all stores within that brand are required to comply with the image and instructions that are provided by management. Examples of this include the use of specific color themes within stores, all stores having the same or similar layouts, and the use of consistent uniforms across stores. From the security perspective, generally the same protocols, focuses and strategies will be used for security across all stores within the brand. This saves on time and money because plans only need to be developed once. In addition, it ensures continuity across stores. One problem with this is that not all stores have the same requirements, and some smaller stores may not benefit from the plans in the same way that larger ones do. A study considering the 2010 retail year examined the trends in theft across 23 major retail firms within the United States. These firms represent a subset of all businesses that are present, and as a consequence the numbers for theft nationwide are likely to be much higher. The authors found that within this time period, more than 1 million instances of theft were recorded, either by shoplifters or by internal theft. The estimated amount stolen was more than $7 billion, and the amount which was recovered as a consequence of police operations was over $148 million. The number of employees who were apprehended was much lower than that of shoplifters (69,373 and 959,903 apprehensions respectively), however, per case, employees stole close to six times the amount that shoplifters did . This indicates that theft from employees and consumers remains a considerable problem for businesses. This problem is one that is focused on by security staff, and many different methods are used to help prevent this. The apprehension of thieves is an important aspect of loss prevention. Most stores have trained security staff who know the procedures that are required to deal with anyone who is caught shoplifting. Electronic systems, such as CCTV and tags on items can be used to track whether individuals leave the store without purchasing items. In addition, observation from staff members is often an invaluable asset. However, any apprehension needs to carefully follow the guidelines and policies of the store. This is because the rights of the suspected thief are important, and apprehension of a suspected thief who has not stolen anything can have significant repercussions for the store. In addition, thieves can be dangerous, and there is a significant risk to employees if apprehension is not done correctly. There is always the risk that the thief could pull a knife on an employee, or injure them in a fight. Most stores consider that apprehending the thief is not worth putting their employees at risk. Deterring theft can often be more effective, in part because it eliminates this risk for staff. One mechanism of theft deterrence is building a positive relationship with customers, and ensuring that customers have a positive experience at the store. This generates strong satisfaction and loyalty among customers, which can have a significant positive effect on the level of theft which occurs within the store. Customers tend to be less likely to steal from a store that they like than one which they do not. In addition, the presence of security systems can act as a determent. Many potential thieves weigh the risks and benefits of stealing an item. If there are effective security systems present, then the likelihood of the thief getting caught increases. Thus, the presence of security systems can significantly decrease the level of theft that occurs. As a consequence of this, many stores make sure that their security staff are easily recognizable and visible throughout the store and that any electronic systems that are present are obvious to the consumer. This can be done through the use of distinctive uniforms for security officers, warning signs that electronic security is in place and the use of visible security tags on expensive products . At Best Buy, theft deterrence is the primary focus of the brand’s loss prevention policy. A number of tools are used to ensure that loss is minimized. Some of the most important tools that the company uses include providing a positive experience for the consumer, visible electronic system, store layout and the checking of receipts and purchases. A number of techniques are used in order to provide a positive customer opinion of the store. The main focus is through providing good customer service and making sure that any question that the consumer has is answered to their satisfaction. In addition, each customer is greeted at the door by a member of the security team as well as being greeted by department members each time they enter a new department. As well as the positive effect that this gives, it also informs the customer that staff know that they are present, and will be aware if they steal. As discussed above, this decreases the likelihood of theft, as consumers are less likely to steal from a store that they like. Security cameras are easily seen, and there are electronic article surveillance (EAS) stands at the store entrance. In addition, there are signs posted throughout the store which inform customers that there is electronic surveillance occurring. The layout of the store makes theft difficult, as all parts of the floor are visible by security systems, and the flow of customers is steady throughout the store. Finally, receipts and purchases are checked at random on exit from the store. Random checking presents one more hurdle that thieves have to pass in order to get stolen goods out of the store, and the random nature of it prevents ordinary customers from getting too frustrated at the process. The Use of Electronic Systems As technology has continued to grow and become more complex, the options for electronic systems that can be used for loss prevention have also increased. Along with this there has been the need to constantly upgrade current technology and make use of new technology in order to effectively reduce theft. As a consequence, many different types of electronic systems are now used in retail stores to supplement the role of security staff. No matter how effective electronic systems become it is unlikely that they will ever fully supplant the role of the physical security personnel. This is because the intelligence and problem solving skills of people are required to interpret the information that is gathered by these systems and determine the best form of response. One form of technology that has become very prevalent in a large number of industries and institutions is closed-circuit television (CCTV). It allows for many locations to be observed simultaneously in a more effective and a more discreet manner than physical security could. The information is recorded, and thus is able to be reviewed at a later date. The term CCTV is used to refer to a system of video cameras which send their feeds to a specific location, rather than being accessible to any receiver . In business security, this point is often a monitoring station which contains many screens which constantly cycle through images from the different cameras throughout the store. Areas that are covered include not only the shop floor but also entrances and exits to the store and employee only areas. Footage from the cameras is stored for a certain period of time, and those with clearance are able to look through the security tapes to determine times and dates of theft, to provide evidence of theft or to aid in an internal investigation of employee misconduct. The direction in which the cameras face is able to be controlled from this site and the range of movement for the cameras allows security staff to follow people of interest throughout the store using the cameras. Coverage of the entire store is generally not possible using CCTV cameras, as the cameras have a limited range of vision and more cameras that are present, the more difficult it is to effectively monitor them. Therefore, stores tend to place security cameras in ways which minimize the number of blind spots that they have, but maximize both the area that the cameras cover and the visibility of the cameras to customers. Often the knowledge that a security camera system is in operation is enough to deter many thieves. The type of technology that is used in CCTV systems can vary significantly and currently there are many different types of cameras and systems available depending on the specific needs of the company. For example, if there is concern that the camera may be vandalized, such as because it is in a public place, then a housing for the camera can be used that prevents it being damaged but still allows for the sending of clear video. One common difference in camera types is dome and box cameras. A box camera means that the cameras presence is obvious, as well as the direction in which it is facing. In contrast, a dome camera is where the security camera is covered with an opaque dome that allows the camera an unobstructed view, but means that observers cannot tell what direction the camera is facing or if there is a camera in the dome . When dome cameras were first used most people were not aware that the domes contained security cameras and they were used to hide the fact that the cameras were present. However, nowadays it is generally accepted that the opaque domes hide security cameras. Some companies use dome cameras and install extra domes to give the impression that there are more cameras than the reality. Studies have shown that the use of CCTV cameras significantly reduces the cost of theft, to the extent that the cost of the installation of the CCTV system is economically viable, costing less than the amount of revenue that is gained from the reduction of theft . One of the benefits of using a CCTV system is that it reduces the amount of manpower that is required and as a consequence fewer employees are needed. These excess employees can be reassigned to other jobs or let go in order to cut operating costs. A second system that is often used in retail stores is electronic article surveillance (EAS). This form of security is used on expensive items which are easy to conceal and involves the use of tags which are attached to merchandise. One type of tag that is often used is the stand alone tag. These tags contain permanent dye and are often attached to clothing or other soft merchandise. Special equipment is required to remove these tags without activating them, and this is done at the checkout once the goods have been paid for. If the consumer successfully steals an item with one of these tags, the item is effectively useless as the removal of the tag will result in the dye spilling over the garment . As a consequence, the level of theft for items with these types of tags is significantly reduced, as few thieves have the means of removing them safely. One problem with the dye tag is that it is only useful on soft merchandise. However, another type of tag can be used for any form of merchandise. These tags can vary significantly in size and location. Some are small and are able to be slipped into product packaging, or attached discreetly so that consumers are not aware of their presence. Others are large and prominent, designed to be easily recognizable by the consumer. Unlike the dye tags, these do not need to be removed during checkout; instead they are deactivated during the process. Stores using this system have EAS stands at the entrance and exit, which consumers must pass through to leave the store. If the tag has not been deactivated, then the machine sets off an alarm . These types of tags are effective at deterring theft. However, the number of items that are able to incorrectly set of the alarm (such as paid for products from other stores, certain items like laptops, or paid for items which have not had their tags correctly deactivated) means that the alarm is often ignored. Risk Assessments The use of risk assessments is a management technique that is used in many different industries in order to identify the areas that are least controlled and are most likely to cause problems. This gives the ability for these areas to be addressed, such as with increased security or increased monitoring. The terms risk analysis and risk evaluation are often used interchangeably with risk assessment. A risk assessment looks at three factors: the overall impact of the loss, the likelihood and the impact of the loss. The likelihood looks at the number of times for which the loss is likely to happen within a year, while the impact measures the financial impact of the loss. Finally, the overall impact of the loss looks combined effect of the two factors, and does so by multiplying the two together to get a number. The higher this number, the more important the loss is and, as a consequence, this number provides an indication of the amount of resources that need to be spent in preventing the loss. This is not the only form of risk assessment. For example, some organizations recommend a seven-step process which looks at the risks at specific locations . Whatever form it takes, the main benefit of a risk assessment is that it shows exactly where resources for loss prevention are best allocated and the results that it finds can often be different from what is intuitively expected. Thus, it allows for methodical analysis of the problem and consequently helps to find the most effective and financially viable solution. Risk assessments are created periodically, such as every six months to every year. This is done in order to determine if the risks have changed and if resources need to be reallocated as the result of different levels of risk. Risk assessment is an important, forward thinking method of managing security that maximizes the use of resources such as time and money by allocating them to areas where they will be most effective. Nationwide Loss due to Theft As discussed in the previous essay, theft can take on two general forms based on the perpetrators: customers or employees. Theft may occur as an organized venture between the two parties, in which case it is characterized as both forms. Current figures suggest that retail crime is now decreasing; however the decrease is slow, with it falling to 1.44% of total retail sales in 2009 from 1.51% in 2008, representing a difference of around $3 billion . It is difficult to determine the level to which theft by employees (internal theft) occurs, as prosecution for these cases occurs only a small fraction of the time, and employers are often aware of the infraction after the employee has already left their company . The cost of internal theft is high, with the National Retail Survey finding that internal theft cost around $15.9 billion nationwide for the year of 2008, a total of 44% of all losses due to theft in that year. Of course this only includes theft that the retails were aware of, and it is likely that the actual cost is higher. One of the problems that make employee theft particularly severe is that it is often linked to organized retail crime . Organized retail crime is often an underestimated problem in retail. This often involves the establishment of black markets and fencing operations where stolen goods are regularly sold. Sites for fencing operations are varied, and include flea markets, swap meets, online auctions, pawn stores and temporary stores . In 2006, legalization was established which allowed for the creation of a taskforce within the FBI to deal specifically with the problem of organized retail theft, as well as the development of a crime database designed to help identify where organized crime is occurring . The production of the taskforce and database was important for retailers as it showed that the government understood that shoplifting was not the main force behind retail theft, and provided a means by which this problem could be tackled. Organized retail crime is estimated to have stolen around $30 billion of merchandise in 2010, and the crime is growing very structured and expanding rapidly. The largest difference between shoplifting and organized crime is that individuals shoplifting generally steal only a few items for their own use, while those perpetrating organized crime often used advanced techniques to steal merchandise that is highly valued and can be quickly old, often stealing thousands of dollars worth in a single trip. Often this is done in a team in order to ensure greater success, with each team member having a specific role to play. The prevalence of this form of crime continues to grow, as the punishment for those who are caught is relatively light, with some regions giving criminals nothing more than a misdemeanor charge . Indeed, more than half of all individuals apprehended shoplifting were not reported to the police, with businesses preferring to focus on preventing shoplifting than on any negative publicity that could result from prosecution of a shoplifter . Conclusion Throughout my time working in the retail industry I have seen the high prevalence of theft, and the importance of techniques to minimize theft. Electronic systems are used in order to catch thieves, but their primary focus is in the prevention of shoplifting occurring. The presence of these systems, and the knowledge that there are security officers watching for any suspicious behavior is often enough to prevent the causal shoplifter. However, more advanced shoplifters, especially those involved in organized crime, find ways around even the most sophisticated anti-theft systems. Consequently, even with the use of technology and risk assessments, as well as other factors which were examined in the previous essay, retail theft continues to be a prevalent issue in retail stores across the nation. References Read More