LP Magazine

JUL-AUG 2018

LP magazine publishes articles for loss prevention, asset protection, and retail professionals covering shrinkage, investigations, shoplifting, internal theft, fraud, technology, best practices, and career development.

Issue link: http://digital.lpportal.com/i/1004777

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Page 42 of 68

product would be sold in illegal stores, flea markets, and even out of personal homes. But now, all those products can be sold directly online. People can do it themselves. They don't need a fence." Warne points out that the Internet has also created more of a market for ORC syndicates. "There's increased pressure from organized retail crime because online channels are making it more profitable for these groups to sell stolen goods," she said. To make matters worse, ORC pays better in America. Survey respondents in the US reported that the average value of each ORC incident was more than $1,400, significantly higher than the value of ORC thefts globally. The Role of Employees The survey indicates that the tight labor pools that are challenging US retailers could be partially responsible for the uptick in shrink over the last five years. Warne says limited access to high-quality employees and high turnover are making it more difficult to combat shrink. "Staffing in stores is declining, making it easier for potential thieves to take merchandise," she said. "Plus, the US has more stores per capita than most other countries, and store footprints are larger." Keenan believes customer service is one key to combating external theft. "The number one deterrent to external theft is good customer service right now," he said. "If you build a culture of good customer service, you deter people who are thinking about stealing. And you really have to integrate loss prevention into virtually everything you do." Keenan recommends that brands incorporate loss prevention training into their customer service training. He said a bit of situational awareness training—meaning learning those behaviors that indicate a customer may be thinking about shoplifting—can go a long way toward amplifying a store's loss prevention capabilities. Meanwhile, he says, stores should educate employees on how shrink affects them directly in order to get their buy-in on loss prevention. "In my mind, you need to teach the employee about why loss affects them," he said. "If there is high loss, they won't get as many hours because the company is less profitable. They may not get pay increases or bonuses either. People want to know, 'What's in it for me?' Once they understand, you'll have them as part of your LP team." However, for some retailers, it may not be enough to train employees on how to Internal/ Employee External/ Shoplifting Internal/ Employee External/ Shoplifting Other Than Organized Retail Crime Organized Retail Crime Vendor/ Supplier Loss Administrative Loss US Shrink Rates by Vertical, 2017–2018 Sources of Shrink 2.03% 2.43% 1.95% 2.05% 1.90% 2.05% PERCENT OF REVENUE AVERAGE MONETARY VALUE IN USD 24.54% $71.75 $89.80 $1,401.68 Fashion and Accessories Stores Drugstores. Pharmacies, and Perfumeries Convenience and Forecourt Stores Variety Stores Home, Garden, and Auto Stores Supermarket and Neighborhood Stores 35.55% 21.47% 18.44% THE WORLDWIDE IMPACT OF SHRINK 42 JULY–AUGUST 2018 | LOSSPREVENTIONMEDIA.COM

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