Shoplifting... A Biggest Challenge for Retailers


By

Prof. Kavita Sharma
Sr. Lecturer
Institute of Business Management & Research
Ahmedabad
 


Introduction:

Retail is India's largest industry, accounting for over 10% of country's GDP and around 8% of employment. Due to increased global competitive pressure, use of advanced information technology and changing demographics of workforce, retailing in India is gradually moving towards the next boom industry. But the path is not so easy. This growth is bringing along lots of issues and challenges, which the retailers have to overcome to survive and grow in this highly competitive industry.

'Shoplifting' is one of the biggest issues faced by most the retailers. The Indian retail industry suffered a total loss of staggering Rs. 9,691 crore due to shoplifting and waste in 2007. As the Indian retail sector booms with international retail giants gearing up for their Indian market foray, a study found that the average shrinkage rate (stock loss from crime or waste expressed as a percentage of retail sales) for India is 2.90 per cent of sales.

Objectives of the study:

"Shoplifting "is one of the major concerns of retail malls. Estimates show it to be the primary cause of one-third of all small-business bankruptcies. The paper is an effort to depict certain aspects of shoplifting. The main aspects covered in the paper are as follows:

* Meaning of 'Shoplifting'
* Types of shoplifters
* Reasons that lure people to shoplift
* Shoplifting techniques
* Steps retailers can take to prevent shoplifting

Research Methodology:

The paper is based on extensive literature review. The information has been sourced from secondary data using various books, magazines and journals. A range of online databases was searched to get an insight into various aspects of shoplifting.

What is shoplifting?

Priya and Pooja always enjoyed hanging out at the mall. But one Saturday, after shopping for jeans, Priya pulled a new shirt out of her bag. Pooja didn't remember seeing her buy it. "I didn't," Priya told her. "I lifted it." Pooja was upset and puzzled. Stealing didn't seem like something Priya would do.

Shoplifting is the act of stealing goods that are on display in a store. Is it a need, or is it greed or is it something entirely different that tempts approximately 23 million people to steal from retail stores each year. Except for the drug addicts and hardened professionals who steal for resale and profit as a business, most shoplifters are decent people who are otherwise law-abiding citizens. The vast majority of adult offenders have no idea about how or why they become a thief, or why they continue to shoplift, even after getting caught. Losses in retail prove to be hazardous for retailers as it results in a pure loss to the organization. The people involved in this activity could vary from the actual thieves, to the organizers, diverters and sales personnel who get the merchandise back out to the market.

One of the studies threw some interesting facts about the nature of shoplifters and their interests across continents. While Asia Pacific loves stealing alcohol the most like the Europeans, North Americans prefer stealing cosmetics and skincare products. Ladies apparel seems to be the preferred choice across the world as it is in almost equal demand among the shoplifters in Asia Pacific, Europe and North America. Indian retailers apprehended 74,540 retail thieves and 93.3 per cent of them were customers and North American retailers apprehended the largest number of employee thieves while the majority of customer thieves (3,481,490) were caught in Europe. Malls are easy targets and favorite destination for shoplifters.

Types of shoplifters:

People who steal from stores can be of any age, race, gender and social and economic background. Shoplifters generally fall into following categories:

1. Professional shoplifters: These people usually steal expensive items, like clothing and jewelry that they can resell easily.

2. Amateur shoplifters: They are the casual shoplifters who don't usually go into a store with the intention of stealing they simply see the opportunity to take something and do.

3. Addictive shoplifters:
They are also found to be addicted to certain things such as drugs, shopping, drinking, overeating, gambling, etc. They do shoplifting just to loose out their repressed negative emotions like anger or frustration. They generally indulge in this crime for others and have careless attitude towards themselves.

4. Needy shoplifters: There are certain people who steal because of the lack of resources with them. Their preference is generally for items of basic necessities like food, toiletries, diapers, etc.

5. Thrill seeking shoplifters: Such shoplifters generally do shoplifting in groups. The age group of such shoplifters is generally teenagers. They steal to satisfy their urge of thrill and excitement, they get a sense of victory when they do so.

6. Absent minded shoplifters: Sometimes people don't do it deliberately, either they are in a hurry or due to effect of some medicines they have memory loss whereby they forget to pay for the item.

Why people shoplift?

A person might shoplift for any reason. But there's no way around the fact that shoplifting is stealing; and in most places there are heavy penalties for it, including being arrested and possibly charged with a crime. Following are some of the reasons that lure people to shoplift:

* Temptation: Many people have a desire to get something for nothing. But they don't want to pay money for it and so get indulged into shoplifting. If they are not caught, they don't get the feeling of guilt or moral fear.
* Justification: Some shoplifters feel that there is nothing wrong in shoplifting and give justifications to defend their act.
* Motivation: The primary motivation for shoplifters is that no body is watching them and their act will not produce any negative or harmful result.

These are some of the reasons that lure people to shoplift as they feel that they are not hurting any body by indulging in such an act. But they fail to understand that shoplifting rarely affects the store as much as it affects the people who shop there.

Shoplifting techniques:

Shoplifters use various techniques to steal the item/s from the stores. Some of them are as follows:

* Palming: Concealing the item in the palm and hiding them out of the store
* Booster devices: Booster coats, pants and shirts with large pockets sewn inside
* Wearing items out: A customer will try on clothing in the dressing room, taking several items with him/her. Once in the dressing room they will layer the stolen clothing under their regular clothing and move out of the store
* Strollers: Many a times people push the strollers through the stores concealing certain items and when confronted they generally give justification that the child must have put the item in the stroller by mistake
* Consumption of goods on the premises itself before coming to the checkout counter

Concerns for retailers

* Shoplifters tend to steal luxury items such as cigarettes and alcohol. The most common items taken by shoplifters are electronics, jewelry, cosmetics and clothing.

Management should focus on three major areas to prevent shoplifting.

1. Educating and training the employees:

* The employees should be trained to be assertive, confident and aware. Sales staff should serve all customers as quickly as possible. Even when the store is busy, customers should be acknowledged as soon as they come into the store. This alerts potential shoplifters that you know they are there.
* Ensure adequate number of employees working all the time because shoplifters generally target the shop when the staffing is low
* Employees should watch for customers who carry accessories or concealment tools and should also offer assistance with baggage, shopping and a place to store the bags that they carry while entering into the store
* Train the employees to identify customers
who linger in one area, near stock rooms, restricted areas, and/or wander through the store.
* Cashiers should be trained to watch for switched price labels/tags and inspect containers, which can conceal stolen items.

2. Physical security measures to raise the deterrence level:

* Eliminate blind spots in the store by rearranging racks and counters
* Display small items in case that can be locked
* T
he items should be kept in an orderly fashion.  This will make it easier to spot whether an item is missing.
* Don't display expensive clothing or merchandise in the front of the store or near entrances or exits unless they are secured
* Unused checkout aisles should be closed and blocked off

3. Use protective equipments:

* Protective devices such as two-way mirrors, closed-circuit television, and covert cameras should be installed.  These protective devices will be costly, but the cost for stolen merchandise is costlier. 
* Tamper-
proof gummed labels, multiple price tickets concealed on items, hard-to-break plastic rings, unique punch patterns on price tags, and a special staple are several ways stores can deter ticket-switching by shoplifters.
* Security tags should be attached to all the items so that an alarm will raise   if a customer leaves the shop without screening of the item

The losses incurred in retail through shoplifting prove to be hazardous as it results in a pure loss for the organization. The ability to track losses at the SKU level during inventory periods will help determine if a specific item is being targeted.

Conclusion:

Every year retail stores lose billions of dollars to shoplifters.  The offense of shoplifting is estimated to be a two billion dollar a year industry in itself. It continues to be a year-round activity, perpetrated by almost anyone at any hour of the day and night. Retailers should create a strong antitheft policy and publicize it among customers and employees alike. In addition, retailers must be familiar with the shoplifting laws in their states. Shoplifting techniques are as varied as people imaginations. Training employees to detect and prevent shoplifting should be a continued effort. The countries with highest shrinkage rates are India, Thailand and U.S. while Austria, Switzerland and Iceland boast of the lowest rates.

Though Indian shrinkage rate has fallen down from 3.20% in 2006 to 2.90% in 2007, the retailers should train their employees to be vigilant of people who indulge themselves in such an act and build in policies to punish the crime of shoplifting.

Bibliography

David Gilbert, Retail Marketing Management, Pearson Education, 2001

Suja Nair, Consumer Behavior in Indian Perspective, Himalaya Publishing House, 2003

Suja Nair, Retail Management, Himalaya Publishing House, 2006

http://www.extension.missouri.edu/explore/miscpubs/mp0658.html

http://www.questia.com/library/sociology-and-anthropology/shoplifting.jsp

http://www.safetycops.com

http://www.diogenesllc.com/reduceshoplifting.pdf

http://www.rediff.com/money/2007/nov/14retail.html

http://www.shopliftersanonymous.com/types.html

http://www.kidshealth.org/teen/school_jobs/good_friends/shoplifting.html
 


Prof. Kavita Sharma
Sr. Lecturer
Institute of Business Management & Research
Ahmedabad
 

Source: E-mail August 14, 2008

           

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