Using Technology To Reduce Retail Shrinkage
Shoplifters and employees are near equal culprits in retail shrinkage, and cellular store retailers must be extremely vigilant to protect their merchandise. Smartphones are hot ticket items on the black market. Individual items are worth hundreds of dollars and the size of the devices make them easy to pocket and ship to be resold anywhere in the world.
Organized Retail Crime
Retailers in the wireless industry face incredible challenges as incidents of organized retail crime (ORC) increase. These organizations are very sophisticated and can infiltrate businesses and lure employees into participating in a crime. ORC harms the economy, public health, and the domestic security of the United States. Financial loss in the retail industry ranges from $15 billion to $37 billion annually, according to a report from the Congressional Research Service (https://www.fas.org/sgp/crs/misc/R41118.pdf).
Technological Tools for Catching Thieves
The technology that thieves are after is also what retailers can use to catch them. Vigilant retailers must do frequent inventory checks. Sophisticated POS systems track real-time inventory; managers can then use this information to perform spot checks of certain high-priced items. Detailed back-office reports can pinpoint suspicious activities.
Pairing a POS system with a video surveillance system that communicates in real time, you can watch a video of suspicious POS transactions to identify culprits.
Sophisticated back-office solutions and POS systems have greatly helped retailers identify fraudulent employees, says Dr. Richard Hollinger, a criminology professor at the University of Florida, who has studied retail theft for more than 24 years.
Employee theft has historically been the greatest cause of retail inventory shrinkage in the United States until recently, says Hollinger, the lead author of the National Retail Security Survey (https://nrf.com/resources/retail-library/national-retail-security-survey-2015). The 2015 survey identified shoplifting as the number one cause of retail inventory shrinkage at 38% and employee/internal theft at 34.5%. Retail theft cost the industry $44 billion in 2014. Administrative and paperwork errors account for 16.5% of retail shrinkage in the U.S.
In an interview on the Lost Prevention News Network (LPNN), Hollinger also spoke about how retailers are using technology to curb shoplifting. Some retailers have started using facial recognition software to identify possible shoplifters. As people enter stores, their faces are scanned, and if the person is known to police, managers are notified so they can take precautions and notify police if necessary.
Strategies To Prevent Shoplifting
Cellular store retailers can also deter shoplifters by only displaying model phones and keeping actual items locked up so that customers must interact with sales associates before handling an actual smartphone. Staying visible and keeping staff on the sales floor is critical in cellular stores. With a mobile POS system, sales associates do not need to work behind a cash register to look up inventory, find product information, set up a client or perform a transaction. They remain on the sales floor where they can keep an eye on shoplifters.
Employees should be trained to identify shoplifters, being vigilant of people who:
- wander the store and avoid eye contact or help from associates;
- watch sales associates and other customers carefully but don’t appear to look at the merchandise;
- return to the store frequently but don’t purchase anything linger in areas of the store that are difficult to monitor.
Suspicious activities could include multiple returns, discounts and other transactions that could be excused as errors. Use the POS system’s reporting capabilities, identify the cellular store’s busiest periods and make sure adequate staff are available to meet the demand. Retailers who harness the power of their POS system’s reporting capabilities can identify suspicious activities and fraudulent employees.
NRF PROTECT Loss Prevention Conference will be held in Philadelphia on June 14-16, 2016.