Retail loss prevention

[ZLoth]

YouTube just suggested on my YouTube feed a series of videos about closed stores in San Francisco, including several from Metal Leo. One example is from Market Street and Powell:

I disagree with the assertion that eCommerce site Amazon killing off the business. It's more like the effects of Proposition 47 which changed certain crimes from felonies to misdomeniors, such as shoplifting, grand theft, receiving stolen property, forgery, fraud, and/or writing a bad check where the value does not exceed $950. Combine that with the reluctance of prosecutors to pursue such low-value cases combined with the increased cost of business insurance, and look what we get.

[Max Rockatansky]

The shoplift pushback in big cities in California isn't new, nor is it exclusive to California.  When I worked market investigations at Sears Grand (2007-2010) in SoCal most of the larger cities didn't want to take our Booster cases unless they had a huge dollar value attached them (usually 10k or higher).  That wasn't dissimilar to some cities in Arizona (Scottsdale mostly) which were also in my market.  Mesa PD used to give my investigators crap about anything under $200 in value.  The only big city that I really recall being super willing to prosecute shoplifters at any case value was Orlando. 

The threshold I used to recommend closing stores was if a location exceeded 2% shrink for three years in a row and wasn't generating a net profit.  Industry standard right now is about 1.3% inventory shrink.  I did have a store once in Desert Hot Springs that was at 4.99% shrink when I took into my area at Beale's Outlet.  That was probably the easiest closure recommendation I ever made.

[ZLoth]

Was the shoplifting to the point where even low-value items were locked behind cases requiring employees to unlock? Or that some alcohol products were behind in-store "fences"? (I observed this personally during a visit to California two months ago).

[Max Rockatansky]

The Sears Grand store in East Los Angeles was so bad that our employees had to park in a specific place not to get their cars broken into.  That was the same store that also had someone drive through the front door overnight to do a smash and grab.  The further back in time you go, the more shoplifting was prevalent.  I'd argue a large part of that was due to less high shrink items not being locked up. 

Several things contributed to a downward trend in shoplift cases over the last two decades:

-  CCTV improving greatly.  Gone are the days of stores having floor walking LP and giant voids in camera coverage. 
-  EAS devices emerging and eventually being source tagged from vendors. 
-  Retail buyers being more inclined to lock up/protect high risk merchandise.  Two decades ago, almost everything aside from high end electronics wasn't locked up.
-  The emergence of Point of Sale exception reporting software.
-  Big retailers are more selective regarding where they put stores.  The trend used to be to chase cheap rent or low real estate value. 
-  Most big retailers have departments now that investigate Booster groups (Organized Retail Crime).
-  Freight RFID is far more common and industry standard nowadays.

[Max Rockatansky]

Worth noting, I've been working in the retail Loss Prevention field since 2001.  What I was doing during 2001 has little in common with that I do now.  Back in 2001 almost all LP work was about catching a quota of shoplifters and employee theft cases.  We had little to do with inventory shrink management, profit protection or even safety. 

The big trend with theft nowadays is the protective measures I described above.  It's far more cost effective now to protect merchandise on the front end than try to apprehend an endless supply of shoplifters.  Retailers on the whole are far more hesitant to let their staff go after low dollar/low value cases and usually have some sort of dollar limit threshold.  I only know of a few retailers that allow hands-on apprehensions nowadays.  Having giant fights with shoplifters turns out is bad for business (from a claims, liability and perception standpoint).

Most of what I do now is shrink mitigation, profit protection and safety mitigation.  If retail LP is to remain viable it has to continue to evolve and be more than just about busting $20 shoplift cases that local authorities don't want to prosecute. 

[mgk920]

Some places seem to be going back to the REEEEALLY old school model of the neighborhood corner grocery store where the owner/clerk would get the list from the customer at the front counter and take the items off of the shelf that was behind him.  This model went out shortly after WWII ended.

Mike

[jamess]

I disagree with the assertion that eCommerce site Amazon killing off the business. It's more like the effects of Proposition 47 which changed certain crimes from felonies to misdomeniors, such as shoplifting, grand theft, receiving stolen property, forgery, fraud, and/or writing a bad check where the value does not exceed $950. Combine that with the reluctance of prosecutors to pursue such low-value cases combined with the increased cost of business insurance, and look what we get.

California at $950 is actually one of the lowest meaning one of the easiest to prosecute.

https://worldpopulationreview.com/state-rankings/felony-theft-amount-by-state

Texas has the highest limit at $2,500

[fhmiii]

Some places seem to be going back to the REEEEALLY old school model of the neighborhood corner grocery store where the owner/clerk would get the list from the customer at the front counter and take the items off of the shelf that was behind him.  This model went out shortly after WWII ended.

Mike

There's a lot of efficiency to be gained by this model, especially in a culture that increasingly embraces food delivery services.  I can easily see a model where perhaps you pick your own produce and there's still a meat/deli counter and bakery, but all your dry and frozen goods are selected on a kiosk or even in an app before you arrive.  Smaller footprint and less labor gets spent on restocking shelves.

[GaryV]

Some places seem to be going back to the REEEEALLY old school model of the neighborhood corner grocery store where the owner/clerk would get the list from the customer at the front counter and take the items off of the shelf that was behind him.  This model went out shortly after WWII ended.

Mike

There's a lot of efficiency to be gained by this model, especially in a culture that increasingly embraces food delivery services.  I can easily see a model where perhaps you pick your own produce and there's still a meat/deli counter and bakery, but all your dry and frozen goods are selected on a kiosk or even in an app before you arrive.  Smaller footprint and less labor gets spent on restocking shelves.

But it would eliminate all the impulse buying when people don't see the items on the shelf as they pass by. They'd only buy what was on their list. Stores would probably not care for that.

[skluth]

Some places seem to be going back to the REEEEALLY old school model of the neighborhood corner grocery store where the owner/clerk would get the list from the customer at the front counter and take the items off of the shelf that was behind him.  This model went out shortly after WWII ended.

Mike

There's a lot of efficiency to be gained by this model, especially in a culture that increasingly embraces food delivery services.  I can easily see a model where perhaps you pick your own produce and there's still a meat/deli counter and bakery, but all your dry and frozen goods are selected on a kiosk or even in an app before you arrive.  Smaller footprint and less labor gets spent on restocking shelves.

But it would eliminate all the impulse buying when people don't see the items on the shelf as they pass by. They'd only buy what was on their list. Stores would probably not care for that.

Maybe the clerk could be like Amazon and say "3 other customers who bought Ersatz Dill Pickles also bought Fee Fie Faux Mustard." Or more likely there's a flat screen run by an AI that overhears the customer and flashes recommendations on the screen behind the clerk.

[SectorZ]

Some places seem to be going back to the REEEEALLY old school model of the neighborhood corner grocery store where the owner/clerk would get the list from the customer at the front counter and take the items off of the shelf that was behind him.  This model went out shortly after WWII ended.

Mike

There's a lot of efficiency to be gained by this model, especially in a culture that increasingly embraces food delivery services.  I can easily see a model where perhaps you pick your own produce and there's still a meat/deli counter and bakery, but all your dry and frozen goods are selected on a kiosk or even in an app before you arrive.  Smaller footprint and less labor gets spent on restocking shelves.

But it would eliminate all the impulse buying when people don't see the items on the shelf as they pass by. They'd only buy what was on their list. Stores would probably not care for that.

Maybe the clerk could be like Amazon and say "3 other customers who bought Ersatz Dill Pickles also bought Fee Fie Faux Mustard." Or more likely there's a flat screen run by an AI that overhears the customer and flashes recommendations on the screen behind the clerk.

Telescreens, brought to you by Amazon.

[Scott5114]

Some places seem to be going back to the REEEEALLY old school model of the neighborhood corner grocery store where the owner/clerk would get the list from the customer at the front counter and take the items off of the shelf that was behind him.  This model went out shortly after WWII ended.

Mike

There's a lot of efficiency to be gained by this model, especially in a culture that increasingly embraces food delivery services.  I can easily see a model where perhaps you pick your own produce and there's still a meat/deli counter and bakery, but all your dry and frozen goods are selected on a kiosk or even in an app before you arrive.  Smaller footprint and less labor gets spent on restocking shelves.

But it would eliminate all the impulse buying when people don't see the items on the shelf as they pass by. They'd only buy what was on their list. Stores would probably not care for that.

OKC has a startup chain called Jack Be where you do all the shopping on an app, then go to the store and they bring the whole order out to your car.

I'd imagine the small amount lost on impulse purchases is more than made up for by algorithmic product recommendations and overhead saved on not having to maintain the facility beyond the warehouse level, as well as not having to provide staff to field the "where's the ____?" sort of queries and get burger meat a customer decided they didn't want out of the baby food aisle where they left it. Also, shrink is probably way lower.

[fhmiii]

Some places seem to be going back to the REEEEALLY old school model of the neighborhood corner grocery store where the owner/clerk would get the list from the customer at the front counter and take the items off of the shelf that was behind him.  This model went out shortly after WWII ended.

Mike

There's a lot of efficiency to be gained by this model, especially in a culture that increasingly embraces food delivery services.  I can easily see a model where perhaps you pick your own produce and there's still a meat/deli counter and bakery, but all your dry and frozen goods are selected on a kiosk or even in an app before you arrive.  Smaller footprint and less labor gets spent on restocking shelves.

But it would eliminate all the impulse buying when people don't see the items on the shelf as they pass by. They'd only buy what was on their list. Stores would probably not care for that.

OKC has a startup chain called Jack Be where you do all the shopping on an app, then go to the store and they bring the whole order out to your car.

I'd imagine the small amount lost on impulse purchases is more than made up for by algorithmic product recommendations and overhead saved on not having to maintain the facility beyond the warehouse level, as well as not having to provide staff to field the "where's the ____?" sort of queries and get burger meat a customer decided they didn't want out of the baby food aisle where they left it. Also, shrink is probably way lower.

Amazon has "others who bought this also bought," as well as various recommendations and sponsored items when you're searching for whatever you're trying to find.  So does the app for my local grocery store.  You won't have in-store displays, but you'd still have stuff to generate an impulse buy.  Plus Point-Of-Sale displays (Cokes, M&Ms, chips, etc.) when you go in to collect your groceries or under the canopy when you're waiting for them to load you, which I'm certain can all be easily added to your existing order.

[ZLoth]

 

[Max Rockatansky]

Exit gates like those have gotten me mixed into so many unnecessary fights with shoplifters.  Target experimented with those in the early 2000s and it didn't exactly go great.  It was ultimately just easier to try to sneak up on shoplifters or just stop them in the exterior of the exit. 

But the chain with padlocks, yeah that's an odd one. 

[bing101]

It's not just in San Francisco but happening in parts of California. Note this segment focuses on Safeways NorCal outlets getting a security system like the one seen here. Sure some of this is that the homeless is not a San Francisco, Oakland and Berkeley issue but also spreading to suburban areas. I know there are issues of homeless staying around Supermarkets for resource reasons. Wait until Austin, DFW, Houston and San Antonio has the same issues in a few decades

[Max Rockatansky]

The only place in the Central Valley  I've seen controlled exits in general goods retail store is the Kings Canyon Road Walmart east of downtown Fresno.  They were using turnstiles that could look for awhile but since went back to just manning them with receipt checkers.

Strangely the Vons on Kings Canyon Road has their batteries in a lockup.  I happened to run into a department manager I know at the store and asked about it.  Apparently they popped high on their previous physical inventory and that ended up being part of the shrink action plan (these are actual things retailers do).  No other store in the immediate vicinity locks their batteries up. 

[mgk920]

How long before there is a serious push to repeal Pop. 47?

Mike

[kalvado]

How long before there is a serious push to repeal Pop. 47?

Mike

And would that change anything? Previous threshold for felony was $400, and probably was about the same back then when inflation is considered.

What is the threshold for sending someone to jail should be? They used to hang kids for a loaf of bread back in middle ages. Should that come back? Is there enough prosecutors and judges to manage punitive approach, or money to pay for imprisoned - and that isn't cheap as well?

What really changed is a social moral, when stealing from the big corporation or from rich in general isn't a bad thing any more.  Cancel rent is on the same page, I would say. Neither can be easily repealed.

[Max Rockatansky]

What would end up happening is that the felony cases more often than not would just get plead down to misdemeanors.  That was standard practice in my first two stints in California and really everywhere else I've worked.  Usually you have to get around 5k to get a police department and DA interested in felony prosecution for shoplifting. 

There has been numerous times in the past where I've been subpoenaed to testify if felony shoplift cases.  In almost every instance the case ends up getting pled down to a misdemeanor as the court date approaches.  A lot of DA's like to use that as a carrot to avoid having to devote resources for shoplift court cases.

Also worth noting, Felony 6 shoplifting in Arizona began at $1,000 when I worked in the state circa 2001-2013.  While it's easy to point fingers at California's legislature, the fact is that the felony thresholds for shoplifting in a lot of states is probably higher than what is being estimated in this thread.  A couple of friends who worked for MCSO actually got in trouble (chewed out) for trying to cite $1,000 shoplift cases as Felony 6.  The Maricopa County District Attorney's Office was not big on felony shoplifting cases.

Edit: Apparently ARS 13-1805 still hasn't changed this past decade:

https://azleg.gov/ars/13/01805.htm

I'd argue PC 495.5 as written is nominally more strict than ARS 13-1805.

https://www.shouselaw.com/ca/defense/penal-code/459-5/

[Max Rockatansky]

Mods, might it be better to split or duplicate this retail Loss Prevention stuff into a new thread?  Much of what has been discussed isn't exclusive to California but retail in general.

[J N Winkler]

Mods, might it be better to split or duplicate this retail Loss Prevention stuff into a new thread?  Much of what has been discussed isn't exclusive to California but retail in general.

Now done.

[J N Winkler]

What would end up happening is that the felony cases more often than not would just get plead down to misdemeanors.  That was standard practice in my first two stints in California and really everywhere else I've worked.  Usually you have to get around 5k to get a police department and DA interested in felony prosecution for shoplifting.

If I understand correctly what you have said here and elsewhere about your loss prevention work, it occurs in a military setting.  Does access to Article 15 sanctions make it easier to control shrinkage than would be the case in the civilian world?

[Max Rockatansky]

What would end up happening is that the felony cases more often than not would just get plead down to misdemeanors.  That was standard practice in my first two stints in California and really everywhere else I've worked.  Usually you have to get around 5k to get a police department and DA interested in felony prosecution for shoplifting.

If I understand correctly what you have said here and elsewhere about your loss prevention work, it occurs in a military setting.  Does access to Article 15 sanctions make it easier to control shrinkage than would be the case in the civilian world?

Most definitely, but that shouldn't be all that surprising.  The UCMJ tends to be very strict with enforcement and punishment.  That said, I don't think something like the UCMJ is something that a would work in the Civilian world.  That's not to say crime and shoplifting doesn't exist, it just is in lesser amounts. 

[Road Hog]

What would end up happening is that the felony cases more often than not would just get plead down to misdemeanors.  That was standard practice in my first two stints in California and really everywhere else I've worked.  Usually you have to get around 5k to get a police department and DA interested in felony prosecution for shoplifting.

If I understand correctly what you have said here and elsewhere about your loss prevention work, it occurs in a military setting.  Does access to Article 15 sanctions make it easier to control shrinkage than would be the case in the civilian world?

Sorry, one of my pet peeves. The proper retail term is "shrink." "Shrinkage" is what happens when you jump in Lake Superior in January.