How I Lost My Business to Theft

1/3 of business go bankrupt due to shrinkage

Yes this happened to me and unfortunately this is something that can happen to you and your business especially if you are not fully aware of the devastating impact of retail loss and do not have a proactive loss prevention strategy in place. According to the Certified Fraud Examiners approximately 1/3 of all bankruptcies are due to internal and external theft.

This is how I became one of those theft statistics.  

In 1989 a store I owned called "Malibu Records and Gifts" was forced to close its doors forever. Three years earlier my partners and I were extremely excited about opening a new business that sold a wide selection of unique gifts and music cassette tapes. This was a time when a cassette tape was how music was played just prior to the CD revolution.

My partners and I were young, full of energy and full of spectacular dreams. Our plan was to eventually open a chain of stores across the region. So when the news came that our company was in a financial crisis we were all in a state of shock. We were even more shocked when we discovered the main reason for the crisis was due to shrinkage. In a span of less than three years almost a quarter of our stock had gone missing. I am still not certain whether the losses were due to internal or external theft but I could only presume that it was a combination of both. Three years of hard work and an investment of tens of thousands of dollars our dreams were shattered and our company was going out of business despite the fact that sales were generally good.

Although this incident occurred almost 25 years ago I still remember some of the anger and frustration I felt at that time. I was angry at myself for not being more vigilant as well as angry at those people who stole from us. As I look back now I am really not that surprised at the course of events that had occurred.

Being highly inexperienced we did not keep strict inventory controls. Had we, perhaps we would have been alerted to the problem much sooner.

We did not conduct background checks on our employees. Had we, perhaps we would have weeded out some of the potential problem employees.

We did not have much in the form of loss prevention. Had we, perhaps we would have stopped at least some of the theft. There were so many areas that we had taken for granted. Although we were somewhat aware that our retail industry generally had a high shoplifting rate, we didn't think this could happen to us especially since our products were protected, or at least so we thought. Each individual cassette tape was protected by an oversized security case.

Now here is how it was supposed to work. The customer would take the security case with the enclosed cassette tape to the cashier who would use a special "key-like" tool to remove the tape from the security case. The customer then would pay for the item and the transaction would be complete.

Unfortunately this is how often it actually ended up. Shoplifters would simply steal the protective security case including the cassette tape. Then once outside of the store they would use a set of pliers or a large screw driver to pop the cassette out of the security device.

Another area that we lacked was Loss Prevention training. Had we, along with our entire staff been involved in even some basic shoplifting prevention training there is a good chance we would have been more aware and alert if and when a shoplifting incident was about to occur. Perhaps we would have learned how to better reduce at least some of the theft occurring within the store instead of becoming labeled as an easy shoplifting target.

Although this was an expensive lesson, it did make me more aware that we were not alone and every year tens of thousands of businesses go under do to shoplifting and employee theft. Most business owners work too hard to have profits walking out their door and often a few simple preventative steps can help protect those profits and perhaps protect the business from shutting its doors.

 

 

 

Biography

After losing a business to shoplifting and two years later being a victim to a shoplifting assault FJ Tarasoff made a commitment that he would help retailers protect their assets as well as the safety of all staff members. Twenty years later, Tarasoff is a leading authority in retail loss prevention, he conducts training workshops on various loss prevention techniques, including shoplifting and intenal theft and is the developer of “The Shoplifting Prevention Program” an affordable online training program. He has also been interviewed by numerous media outlets including, The CBC, The Globe and Mail, Small Business report, Hardware Magazine, Grocer Magazine, GlobeandMail.Com, Canadian Retailer and is a member of Retail Loss Prevention professionals Group, Security and Loss Prevention for Retail Industry and the UK Loss Prevention Group.

For more information go to http://www.shopliftprevention.com

or email: info@shopliftprevention.com

 

What are the Most Shoplifted Items

No retailer is safe when it comes to shoplifting. Retail crime is now a bigger problem than ever and effects the bottomline of virtually every retailer. Here are some of the Most Shoplifted Items. Some won't surprise you but some will.

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Shoplifting

 

 

 

 

After losing a business to shoplifting and two years later being a victim to a shoplifting assault FJ Tarasoff made a commitment that he would help retailers protect their assets as well as the safety of all staff members. Twenty years later, Tarasoff is a leading authority in retail loss prevention, he conducts training workshops on various loss prevention techniques, including shoplifting and intenal theft and is the developer of “The Shoplifting Prevention Program” an affordable online training program. He has also been interviewed by numerous media outlets including, The CBC, The Globe and Mail, Small Business report, Hardware Magazine, Grocer Magazine, GlobeandMail.Com, Canadian Retailer and is a member of Retail Loss Prevention professionals Group, Security and Loss Prevention for Retail Industry and the UK Loss Prevention Group.

For more information go to http://www.shopliftprevention.com

or email: info@shopliftprevention.com



Employee Theft - How to Stop Employees from Stealing

Sometimes your best customer is a shoplifter and your best employee is a thief

If you are in the retail business and you have employees there is a good chance that one or more of them is stealing from you on a regular basis. The US Chamber of Commerce estimates that 75% of employees steal from the work place and most steal on a repeated basis. On average, it takes more than 18 months for an employer to catch an employee who is dishonest and stealing.

Every year billions of dollars are lost to internal theft and it appears this figure is rising. This is especially tough on the smaller businesses which often are less able to absorb a loss than larger businesses.  A small business usually lacks the resources of a loss prevention department and loss prevention personnel therefore often internal theft can go unnoticed for a much longer period of time, sometimes it is never recognized.

With the rise in both shoplifting as well as employee theft a greater number of businesses are shutting their doors because losses exceed profits. For the first time employee theft has overtaken shoplifting as the number one cause of shrinkage which is of great concern.

Now although there may be more incidences of shoplifting the losses per incident for employee theft is much greater. According to the "Annual Retail Theft Survey" conducted by Jack L Hayes International. On a per case average, dishonest employees steal $665.70 or 5.9 times the amount stolen by shoplifters.

Statistic:

Employee theft alone accounts for about 33% of the businesses bankruptcies that occurred each year prior to the recession

 

 

Although it may be impossible to totally eliminate all internal theft a proactive strategic approach will certainly help to minimize this source of loss.

Following good hiring procedures, performing strict inventory controls and having clear policies if an employee is caught stealing will help. Also maintaining a good positive work environment will be a positive step towards reducing theft. But perhaps the most effective method of reducing theft is employee involvement in loss prevention
 

 

Make Your Employees the Solution

Some studies are now suggesting when employees are involved in the overall loss prevention process there is a reduction in all forms of theft including internal theft.

Including staff members in discussions regarding shoplifting issues during staff meetings can be a step in the right direction. Ask for their suggestions and feedback on areas that they would improve to reduce shoplifting theft. Also involve them in loss prevention training. The participation in Shoplifting Prevention Training by all staff members may be one of the most cost effective tools. Not only does training help to reduce shoplifting but it has been shown to reduce internal theft as well. Psychologists believe that employees who are involved in the process of reducing shoplifting tend to take a greater level of personal responsibility to reduce all forms of retail shrinkage including internal theft. Often they are more vigilant in keeping a closer eye on coworkers as well. Overall training sends all employees a strong message: that you, the retailer take all forms of loss extremely seriously.

 

For larger businesses direct training by a Loss Prevention Specialist can be a good method in the reduction of internal as well as external theft but may be cost prohibative for the smaller establishments. Smaller businesses with less than 20 employees may benefit from ongoing online training whereby each staff member including part timers participate on a fairly regular basis.

 

 

It is unlikely that employee theft will go away anytime in the near future and every business owner works too hard to have hard earned profits walking out the door, taking loss prevention steps will help keep more of thoses hard earned dollars out of the hands of both internal and external thieves.


Biography

After losing a business to shoplifting and two years later being a victim to a shoplifting assault FJ Tarasoff made a commitment that he would help retailers protect their assets as well as the safety of all staff members. Twenty years later, Tarasoff is a leading authority in retail loss prevention, he conducts training workshops on various loss prevention techniques, including shoplifting and intenal theft and is the developer of “The Shoplifting Prevention Program” an affordable online training program. He has also been interviewed by numerous media outlets including, The CBC, The Globe and Mail, Small Business report, Hardware Magazine, Grocer Magazine, GlobeandMail.Com, Canadian Retailer and is a member of Retail Loss Prevention professionals Group, Security and Loss Prevention for Retail Industry and the UK Loss Prevention Group.

 
For more infomation or question contact me at info@shopliftprevention.com
or go to www.shopliftprevention.com
 





Calculate the Cost of Shoplifting and Employee Theft

Shoplifting and Employee theft will cost you as a retailer a great deal in lost profits and everyone pays for this crime. Retailers suffer lower profits and consumers ultimately pay higher prices. Some stores charge up to 7 cents per dollar to cover retail losses but this could pose a major problem as this action will make a business less competitive.




Many retail business are often unaware of the impact of retail loss on there business,  in terms of profits walking out their door. Although the cost of loss will vary depending on many factors here is a simple basic formula which applies to virtually every single retail outlet from the mom and pop stores to the large retail chains.

So let’s break it down a bit further and examine the actual Cost of Shoplifting to both the retailer as well as the consumer.

Formula for calculating total annual Retail Losses

 

Estimate your businesses gross yearly sales, then multiply this figure by a value of 1%. Repeat this calculation again but this time take your gross yearly sales and multiply it by 8%. (It should be noted that some retail loss levels will be slightly lower and others will be higher.)

 

 

Example 1: $1,000,000 (yearly gross sales) X 1% = $10,000 (retail loss)

This example represents a business with strict inventory control, ongoing staff loss prevention training and a combination of security systems and strategies.

 

 

Example 2 : $1,000,000 (yearly gross sales) X 8% = $80,000 (retail loss)

This example represents a company with little or no anti-loss policies.

Generally most retail businesses yearly losses are somewhere between the two example figures of 1% and 8 % and although your yearly gross sales will vary the percentage figures will remain constant.
 
 

Is Shoplifting a Victimless Crime?

 

Although at times there is a notion that shoplifting and internal theft is a victimless crime, this is in fact not true. Everyone, except the thief pays as it is estimated that every consumer in the US and Canada pay's a minimum of $250 each year because of these crimes against merchants.

Theft of a $2.00 item from a store operating on a 10% profit margin requires the sale of $20.00 in merchandise to make up for the loss. Supermarkets and other retailers operating on low margins of 1% must sell $500.00 in merchandise, just to cover the Cost of a $5.00 stolen item. It's easy to see how out-of-control Shoplifting can quickly threaten the viability of a business.

The Cost of Shoplifting is high, having doubled since the year 2000 and is expected to continue to skyrocket. Retailers need to re-examine their level of security and should begin to take a more proactive role in the battle against retail theft. Most retail loss experts agree that in order to be successful there needs to be a combination of anti-theft devices combined with good staff training in the prevention of retail shrinkage.

Biography

 After losing a business to shoplifting and two years later being a victim to a shoplifting assault FJ Tarasoff made a commitment that he would help retailers protect their assets as well as the safety of all staff members. Twenty years later, Tarasoff is a leading authority in retail loss prevention, he conducts training workshops on various loss prevention techniques, including shoplifting and intenal theft and is the developer of “The Shoplifting Prevention Program” an affordable online training program. He has also been interviewed by numerous media outlets including, The CBC, The Globe and Mail, Small Business report, Hardware Magazine, Grocer Magazine, GlobeandMail.Com, Canadian Retailer and is a member of Retail Loss Prevention professionals Group, Security and Loss Prevention for Retail Industry and the UK Loss Prevention Group.

For more information go to http://www.shopliftprevention.com

or email: info@shopliftprevention.com



Interview with a Shoplifter, When, How and Why

Although there are different types of shoplifters and their motives may be different, one thing for sure, shoplifting has skyrocketed and can cost a retailer dearly in lost profits.

In order to better prevent shoplifting, for the last 15 years I have interviewed more than 300 shoplifters attempting to learn more about their tactics and how theft has changed through the years. Lately it has become obvious that shoplifters have become more sophisticated than ever before.

 

The following is an interview in 2012 with a professional shoplifter who is located somewhere in the United States.



Q.       Thank you for talking to me. Let me ask you how long have you been shoplifting?

A.       Just over 4 years.

 

Q.       Why did you decide to start stealing?
 

A.        Part of it was necessity. I became unemployed during the 2008 recession and after more than six months of searching for a new job I became frustrated. The bills were still coming in but not the paycheck.

  

 

 

Q.       Can I ask you what was your occupation prior to 2008?
 

A.        I worked in the corporate world as director of marketing.

Q.        Are you serious?
 

A.        Yep, I have a degree in marketing and worked for the company for nearly 10 years.

 

Q.        Why shoplifting? What made you to choose that path?
 

A.        I think it was a matter of desperation. I had a good lifestyle prior to being unemployed and did not want to lose that. So one day when I was surfing on the internet and stumbled on a site that talked about how easy it was to make some big money boosting (shoplifting) items. It explained how most retailers were not well setup to prevent it from happening. So I researched it for a few weeks and then started.

 

 

Q.        The internet was your source of training?
 

A.        Yeah, pretty much. It’s all out there. Where to steal, how to steal, what to do if you get caught, how to fence (sell) merchandise. There are sites, forums, even videos that teach you all kinds of valuable stuff. There are many experienced people out there who are more than happy to share their knowledge.
 

 

Q.        What was the first store that you stole an item from?
 

A.         It was a Dollar Store not far from where I live.

 

 

Q.        Why would you ever shoplift from a Dollar Store, not much of value there?
 

A         I followed the suggestion of the experienced people on the internet site, to start with a business that had virtually no security. The idea was to become comfortable with pocketing items. This is even where alot of newbie's in organized crime gangs begin. After a few weeks as I become more comfortable, I moved onto something a bit more challenging. I think it was a super market, again a place with very little security.
 

  

Q.        Do you ever feel guilty?
 

A.        Maybe a little bit at first, now I do not really think about it that much.
 

 

Q.        What kind of merchandise do you steal?
 

A.        At first, it was pretty much everything. Then for a while I stole meat from a couple grocery stores and super markets. I had made a deal with a couple restaurants in my area; they would purchase all the meat I could provide them. In fact their daily specials revolved around what I could supply them. So for a couple years I focused on grocery stores and super markets. Now it’s a bit different, I focus more on higher end, easily resold items.
 

 

 

Q.        So you no longer steal from Super Markets?
 

A.        No I didn't say that. I still regularly lift from Super Markets. You have got to realize that most Super Markets sell pretty much everything and in most cases their security is really quite lax.
 

 

Q.       Where do you sell your merchandise?
 

A.        Mostly online. There are lots of places online.

 

 

Q.        I hear that some shoplifters take special orders of what to steal?
 

A.        Yeah some shoplifters do. But I find it’s a bit risky. If a client gets caught there maybe a chance they will “rat” on you. I really do not like to take too many unnecessary chances.

 

 

Q.        How do you decide who to target?
 

A.        After a while you just get to know who is an easy target and who is not. The word gets out pretty quick who is considered an easy mark and who is a tough target.  Alot of times this kind of information is posted online through the forums I belong to. I also notice that alot of retailers and their employees just don’t seem to care if they are getting ripped off.


   

Q.        Ok, what determines an easy target verses a tough target?
 

A.        I generally look at the staff. If the staff is not alert or doesn’t seem to care then 99 out of a 100 times this will be an fairly easy target, this is especially true if there is no LPO (Loss Prevention Officer) present. Mind you after awhile you get to know who the LPO's are and you come back at a different time when they are not around. Then finally I look at the security systems that a store may have.

 

 

Q.        Do you consider a businesses with various anti-theft security devices, such as CCTV (closed circuit television), or EAS (Electronic Article Surveillance) systems a tough target?
 

A.        Yes and No, it all depends. Some businesses have security systems but they are poorly maintained. Others depend only on … lets say an EAS system and nothing else. These sometimes can be the easiest targets cause nobody is watching; they figure that the security system will take care of all theft, they almost get a false sense of security that this will stop me from stealing. But in many cases I can easily outsmarted alot of the systems that are out there.

 

 

Q.        So how do you steal things from these types of retailers? Lets say a retailer with an EAS system?
 

A.        Well I have all kinds of different things that work for me. I have made some of my own booster equipment that will prevent alarms from going off when I walk through the security gates. I also just recently started using a small detacher that I bring into a store that will remove the security tags, this way I could walk out the door with the stuff and the alarm will not go off, I don’t even need the booster equipment in this case.

            (Special note: generally booster equipment is a bag or a box that is lined with multiple layers special material 
               that will prevent the EAS security alarm from sounding)

 

 

Q.        Where did you get this tag detacher?

 

A.        Online of course?

 

 

 

Q.         Do you target the big box stores?

 

A.         I stay away from the big box stores, not all but most of them are very serious about loss prevention. I perfer to boost the small to medium sized businesses. Less risky

 

 

 

Q.        Couple more questions. Do you target the same retail outlet repeatedly or do you move around?
 

A.        It all depends. There is one store I have been boosting (shoplifting) for the last 3 years, at least once or twice every week. It’s just easy and safe. But in other cases if I sense that I may be under any suspicion, I will move on. There are plenty of easy targets out there so there is no need to take unnecessary risks.

 

 

Q.        Have you been caught before?
 

A.        I’ve been caught twice but fortunately never arrested.

 

 

Q.        How did you manage that?
 

A.        The first time I gave a real sad sob story and was let go with a warning and a ban. The next time I ended up paying off the manager. I handed him a wad of cash, maybe seven or eight hundred dollars and he let me go.

 

 

Q.        You bribed the manager?
 

A.        Hey it worked. Lets call it part of doing business.
 

 

Q.       So do you work weekends? Just kidding you don’t need to answer that question.
 

A.        That’s fine. The answer is Yes, I often work on weekends because it is easier and less risky. Many stores use younger less experienced employees on weekends which usually are not trained in how to spot a shoplifter.

 

 

Q.        Last question. How much do you make boosting merchandise and have you ever considered getting back into marketing?
 

A.        Its difficult to even consider getting back into marketing. Right now what I do is way too lucrative.

 

   

Q.       Can you give me an idea of how lucrative it is?
 

A.        Last year I made a little over 250,000 dollars, most of it was tax free.
 

 

Q.       Did you say 250 grand and you work alone?

A.       Yeah is somewhere near that amount..

Q.        Thanks for your time.
 

A.        You bet.

I hope this gives you a better insight into the mind of a shoplifter and may assist you in developing better loss prevention strategies for your business.

      

 

After losing a business to shoplifting and two years later being a victim to a shoplifting assault FJ Tarasoff made a commitment that he would help retailers protect their assets as well as the safety of all staff members. Twenty years later, Tarasoff is a leading authority in retail loss prevention, he conducts training workshops on various loss prevention techniques, including shoplifting and intenal theft and is the developer of “The Shoplifting Prevention Program” an affordable online training program. He has also been interviewed by numerous media outlets including, The CBC, The Globe and Mail, Small Business report, Hardware Magazine, Grocer Magazine, GlobeandMail.Com, Canadian Retailer and is a member
                            Loss Prevention for Retail Industry and the UK Loss Prevention Group.

 

For more information go to http://www.shopliftprevention.com

or email: info@shopliftprevention.com