Shoplifting rings and weak economy spur retail theft

Amid all the cheer of the holiday season, retailers know they'll also be attracting some sticky-fingered shoppers. And this year's weak economy is making the fight against shoplifting only more difficult.

Retailers lost $36.3 billion to theft in 2008, up from $34.8 billion in 2007. While no projections are available yet for 2009, signs are that the problem is getting worse, says Joseph LaRocca, senior adviser on asset protection of the National Retail Federation (NRF). Fewer people are being detained in stores for shoplifting, but when they are stopped, they're more likely to run and even attack store employees, says LaRocca.
"Shoplifters are getting more aggressive," he says. "They're fighting, they're abusive, they're running.... It's a very disturbing trend."

LaRocca attributes this escalation to the rise of shoplifting rings, gangs that steal large quantities of products for resale. These thieves are the reason you often find razor blades under lock and key in your local drugstore, says LaRocca, because small items that can be easily resold are a favorite target of pro shoplifters.

"They're very organized, and they're very skilled," says LaRocca. "They'll steal thousands of dollars in five minutes." They may even open entire stores stocked with stolen products, he says.

Retailers are troubled enough by this trend that they're pressing the U.S. Congress to enact laws to facilitate federal prosecution of shoplifting gangs. A House subcommittee is holding hearings Thursday on the role of federal law enforcement in fighting the retail crime rings.

"A Matter of Greed"

LaRocca disputes claims that economic desperation could be driving a rise in shoplifting. The data show that the type of merchandise popular with shoplifters during this recession is still very similar to what was stolen years ago, he says.

"It's not a matter of need. It's a matter of greed," he says. "You don't need a $1,900 handbag.... Do you need a video game?"

Internet sales have given rise to a phenomenon known as "e-fencing," where thieves will sell stolen goods online, says LaRocca. They can quickly unload stolen merchandise by selling it at 60 to 80 cents on the dollar and face a lower risk of capture, thanks to the web's anonymity. They may appear to be legitimate vendors, with good customer-satisfaction scores and feedback, but a price too good to be true would be a tip-off that you're dealing with stolen goods, says LaRocca.

Look the Other Way, at Your Own Risk

While the recession may not necessarily make shoplifting more likely, cash-strapped consumers may be more willing to turn a blind eye and buy goods off the back of the proverbial truck. If the reader comments on DailyFinance are any indication, there's little sympathy for retailers' losses.

"Consumers are going to these alternative places to save money, and the crooks know that," LaRocca says. "Unfortunately, some consumers look the other way."

But that can cost them, he warns, because you can't count on the quality of the product you're getting. Even if you get the real thing and not a counterfeit, the shoplifters may not be handling and storing merchandise properly to avoid spoilage, says LaRocca.

The NRF recently added several products, including Alli weight-loss pills, to its watch list of items consumers should avoid buying at auction websites. The NRF list includes a variety of items popular with thieves, including over-the-counter remedies, testing kits, razor blades, Dyson vacuum cleaners, high-end liquors and Red Bull energy drinks.

Crime-Fighting Technology Is Costly

Some technologies can help curb what stores diplomatically call "inventory shrinkage," but retailers don't necessarily want to spend on them while fighting for every cent of profit, says Dilip Sarangan, industry analyst for security at consulting firm Frost & Sullivan.

"A lot of retailers don't see the value...a lot of retailers don't think there's much they can do," to stop shoplifters, he says.

Sarangan mentioned digital video surveillance as one useful tool for both catching and prosecuting shoplifters. In fact, experts say a zero-tolerance policy on prosecuting shoplifters can be a good deterrent in the case of your average five-fingered-discount seeker, if not the professionals.

Security specialists also champion radio frequency identification (RFID) tags -- small chips that are attached to products and send out a radio signal -- as both a useful tool for inventory management and security, but cost has has been slowing RFID's adoption.

For now, stores continue to depend mainly on security guards and those big plastic inventory-control tags that have to be removed at checkout. The problem "can be fixed, but it's not something retailers seem to be willing to spend on," Sarangan says. "In an environment when it's all about cost-cutting, it's hard."
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