Retail loss prevention

[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?

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

Or what happens when you were in the pool?

[Big John]

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.

or soil shrinkage on roadway construction projects.

[vdeane]

Yikes with respect to those exit gates.  What happens if you don't find what you want to buy?  You have to buy something you don't want/need just to have a receipt to scan?

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 Neither can be easily repealed.

Like a lot of other things that people who hold those views tend to espouse, this can be summed up with "did not think things through".  If people are stealing everything from the store, then when you need something it might not be available.  But just like with preferring shortages to higher prices, I also wonder if they even care, since they consider anyone who has money to buy things to be "rich" in the first place.

[kkt]

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

A Safeway grocery store here rearranged the store to put the frequently stolen products in a store-within-a-store, with its own checkouts and low shelves so the customers can be observed.  (However having to check out twice will be an annoyance to many customers.)

[Max Rockatansky]

Regarding the "social moral"  I would refer to my comments above about things being much worse even two decades ago.  In the past, it was easier to steal with impunity and not likely to be caught on any sort of CCTV surveillance system.  In fact, when I first started working in Loss Prevention we only had eight cameras in the entire store and had to floor walk all day.  The cases back then were just common and routine, even the most economically well off areas that I worked in.  EAS took a huge chunk out of that shoplift pie followed by enhancements to CCTV, market investigations, increased passive deterrent measures and exception reporting.

Worth noting, I recall my first boss telling me about his heyday of working at Mervyn's in Oakland.  Apparently during the 1970s when 800 shoplift apprehensions was just the average year for the Loss Prevention department.  That number always blew me away back then given it probably meant there was 5-7 people who got away for each caught.  The most I ever caught in one single year by myself was at Dillard's in downtown Scottsdale and that was only about 70.  We had about 200 in total for the year in a 350,000 square foot store. 

[kalvado]

Regarding the "social moral"  I would refer to my comments above about things being much worse even two decades ago.  In the past, it was easier to steal with impunity and not likely to be caught on any sort of CCTV surveillance system.  In fact, when I first started working in Loss Prevention we only had eight cameras in the entire store and had to floor walk all day.  The cases back then were just common and routine, even the most economically well off areas that I worked in.  EAS took a huge chunk out of that shoplift pie followed by enhancements to CCTV, market investigations, increased passive deterrent measures and exception reporting.

Worth noting, I recall my first boss telling me about his heyday of working at Mervyn's in Oakland.  Apparently during the 1970s when 800 shoplift apprehensions was just the average year for the Loss Prevention department.  That number always blew me away back then given it probably meant there was 5-7 people who got away for each caught.  The most I ever caught in one single year by myself was at Dillard's in downtown Scottsdale and that was only about 70.  We had about 200 in total for the year in a 350,000 square foot store.

Didn't you say apprehension isn't done any more?
And I wonder what the shrinkage %% were back then.

[Max Rockatansky]

Regarding the "social moral"  I would refer to my comments above about things being much worse even two decades ago.  In the past, it was easier to steal with impunity and not likely to be caught on any sort of CCTV surveillance system.  In fact, when I first started working in Loss Prevention we only had eight cameras in the entire store and had to floor walk all day.  The cases back then were just common and routine, even the most economically well off areas that I worked in.  EAS took a huge chunk out of that shoplift pie followed by enhancements to CCTV, market investigations, increased passive deterrent measures and exception reporting.

Worth noting, I recall my first boss telling me about his heyday of working at Mervyn's in Oakland.  Apparently during the 1970s when 800 shoplift apprehensions was just the average year for the Loss Prevention department.  That number always blew me away back then given it probably meant there was 5-7 people who got away for each caught.  The most I ever caught in one single year by myself was at Dillard's in downtown Scottsdale and that was only about 70.  We had about 200 in total for the year in a 350,000 square foot store.

Didn't you say apprehension isn't done any more?
And I wonder what the shrinkage %% were back then.

No, they are definitely still done.  What's changed is the amount of them and how willing retailers are to allow hands apprehension techniques.  The National Retail Foundation typically estimates industry shrink related directly to shoplifting somewhere between 33-37%.  The lowest estimate I think that I've ever seen was 31% in the early 2010s?

Regarding overall shrink I recall when 1.5-1.8% in was considered a good shrink result.  Nowadays that number tends to be from what I've seen 1.2% or lower. 

For those that don't know, retail inventory shrink percentage is calculated by dividing the overall shrink dollar loss into retail net sales.  Stuff like services related sales, vendor owner merchandise or consignment goods doesn't factor into inventory shrink given they are not merchandise owned by the retailer.  Generally retailers assign a "shrink reserve"  at the beginning of each Fiscal Year based off the three-five year history of shrink trends.  If the overall shrink dollar number is lower than the reserve then it becomes income on the applicable store Profit & Loss statement.

[Scott5114]

Generally retailers assign a "shrink reserve"  at the beginning of each Fiscal Year based off the three-five year history of shrink trends.  If the overall shrink dollar number is lower than the reserve then it becomes income on the applicable store Profit & Loss statement.

...That follows GAAP?!

[Max Rockatansky]

Generally retailers assign a "shrink reserve"  at the beginning of each Fiscal Year based off the three-five year history of shrink trends.  If the overall shrink dollar number is lower than the reserve then it becomes income on the applicable store Profit & Loss statement.

...That follows GAAP?!

Heh, it certainly is a retail industry practice.  Similarly, there usually is a reserve dollar amount usually set aside for WC/GL claims on retail P&L statements.

My thought on the topic is that the purpose of "reserves" is to make the money associated with things like shrink and claims real to the management on the store level.  When I first became an LP Manager at Sears back in 2005 it was just me and General Manager who were reviewed on shrink/claims dollars.  Nowadays I've noticed these both tend to be a review criterion for pretty much any exempt retail manager.  Personally, I can get behind trying to push making a store profitable by operating correcting.  In the past most retail store managers cared only about their department sales, even they were bleeding via poor net profit. 

[bwana39]

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).

Some of the stores in Louisiana  have the same look. WalMart...

[Scott5114]

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).

Some of the stores in Louisiana  have the same look. WalMart...

I remember deciding not to buy Pokémon cards from Walmart any more when I was a kid because the one in Norman kept them locked up and I was too socially anxious to approach a store employee to unlock them for me. Around 2013 or so, I made the same choice with Hobby Lobby and its Copic markers because it was too much of a pain in the ass to track someone down when I didn't have to do that at Michaels. So it's certainly not a new or an only-in-California thing.

[Max Rockatansky]

The amusing thing is that Pokémon cards have consistently been one of the most (if not the most) commonly stolen items in all the years I've been involved in Loss Prevention.  One of my first shoplift cases I ever had involved a bunch of stolen Pokémon cards at Target in early 2002.  The thefts became so frequent that I set up a special partition to watch the card display that used to be behind the last register at every Target.  Every time one of my investigators gets a case involving Pokémon cards I get the strangest sense of nostalgia. 

[ZLoth]

Regarding overall shrink I recall when 1.5-1.8% in was considered a good shrink result.  Nowadays that number tends to be from what I've seen 1.2% or lower.

I sincerely doubt that San Francisco/Oakland shrink rate is as low as 1.8%. Also, some store security guards there are quite helpless as they are prevented from going after the perpetrator per management decision. The fact that Walgreens, from the KTVU story I posted above, only wants the merchandise back and doesn't even want to press charges says something.

The amusing thing is that Pokémon cards have consistently been one of the most (if not the most) commonly stolen items in all the years I've been involved in Loss Prevention.  One of my first shoplift cases I ever had involved a bunch of stolen Pokémon cards at Target in early 2002.  The thefts became so frequent that I set up a special partition to watch the card display that used to be behind the last register at every Target.  Every time one of my investigators gets a case involving Pokémon cards I get the strangest sense of nostalgia.

Actually, I'm not that terribly surprised. The small size of the item makes it really easily to slip into a pocket or purse. That's why some small items, such as pocket knives, end up being packaged in large clamshell packages. I once witnessed a discussionbetween employees where there was only the VHS box, but no tape. The thief had cut open the bottom of the case, stretched open the plastic case if it was a childrens movie, then put the box back on the shelf. Both Sam's Club and Cosco discontinued the sales of tobacco products several years ago because those products had to be caged because theft was just too high. Not directly related, but some suppliers of parts such as processors or memory sticks require that the each item be shipped separately, especially if you ordered two or three pairs of memory sticks. While it appears wasteful in packaging, they probably had one-too-many claims where "I ordered two sets of memory sticks, but only one set arrived".

I know that if I stole something while growing up, even if it was a minor item like a candy bar, I know that I would experience the fire and brimstone of my parents. Yet, there are many people who work, take advantage, or exploit the system and take advantage of every loophole available. California's proposition 47 classifying theft under $950 as a misdemeanor, plus the reluctance of prosecutors to follow through on those theft reports, plus the leanings of those judges, results in retailers not bothering to file a police report. Thus, the exploit.

Actions have consequences. Sometimes, those consequences are unplanned, unintended, and unexpected, yet can last for years, decades, or an entire lifetime.

[Brandon]

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

Sometimes, it's the State's Attorneys' (District Attorneys') willingness to prosecute.

It isn't just California.  Things are bad enough in Chicago that Walgreens introduced a new store type in the South Loop.

https://blockclubchicago.org/2023/06/02/at-new-chicago-walgreens-you-can-only-browse-two-aisles-the-rest-of-the-store-is-locked-away/

The new design at the Walgreens, 2 E. Roosevelt Road, places most of the merchandise in aisles behind staffed counters, with two interior aisles – covered by anti-theft detectors – where customers can browse and grab items themselves.

The store still has self-checkout stations for groceries, bandages, allergy and pain medication and other lower-cost products, and it has a pharmacy in the back.

But several regulars who shopped Thursday said they think the new design is an attempt to deter theft. There were 19 reported thefts at convenience or drug stores in the 100 block of East Roosevelt Road in 2022, according to police data.

[1995hoo]

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).

Some of the stores in Louisiana  have the same look. WalMart...

I remember deciding not to buy Pokémon cards from Walmart any more when I was a kid because the one in Norman kept them locked up and I was too socially anxious to approach a store employee to unlock them for me. Around 2013 or so, I made the same choice with Hobby Lobby and its Copic markers because it was too much of a pain in the ass to track someone down when I didn't have to do that at Michaels. So it's certainly not a new or an only-in-California thing.

This comment is reminding me of the time a guy in my first-year dorm was talking about "exercising the right to buy nudie magazines" for the first time and hoping the checkout clerk wouldn't be a girl he knew. Makes me wonder how he did the first time he bought rubbers.

[hotdogPi]

Some stores have Magic: the Gathering cards underneath the employee desk, but not all. That said, starting around 2019, there are "collector boosters" that go for about $25 and regular boosters of compilation sets that go for around $15 in addition to the normal $4-5 sets. (Collector boosters of "Double Masters 2022" went for $89, but you can typically only get those at stores that also host game events.)

[Max Rockatansky]

Yugioh cards in the early 2000s were also a hot theft item.  I haven't seen even an empty package on one of those in years lately though.

[Scott5114]

The new design at the Walgreens, 2 E. Roosevelt Road, places most of the merchandise in aisles behind staffed counters, with two interior aisles – covered by anti-theft detectors – where customers can browse and grab items themselves.

This is just how every store was 110 years ago. Piggly Wiggly is credited for establishing the first store where the customers could take merchandise off the shelf in 1916.

[jeffandnicole]

The new design at the Walgreens, 2 E. Roosevelt Road, places most of the merchandise in aisles behind staffed counters, with two interior aisles – covered by anti-theft detectors – where customers can browse and grab items themselves.

This is just how every store was 110 years ago. Piggly Wiggly is credited for establishing the first store where the customers could take merchandise off the shelf in 1916.

What's? So I have to go into a store and do the employee's job?  Why don't they pay me to take items off the shelf? I'm only going to stores where the employees get the items for me.

Notice the similarities to self serve checkout complaints...

[Max Rockatansky]

Regarding overall shrink I recall when 1.5-1.8% in was considered a good shrink result.  Nowadays that number tends to be from what I've seen 1.2% or lower.

I sincerely doubt that San Francisco/Oakland shrink rate is as low as 1.8%. Also, some store security guards there are quite helpless as they are prevented from going after the perpetrator per management decision. The fact that Walgreens, from the KTVU story I posted above, only wants the merchandise back and doesn't even want to press charges says something.

The amusing thing is that Pokémon cards have consistently been one of the most (if not the most) commonly stolen items in all the years I've been involved in Loss Prevention.  One of my first shoplift cases I ever had involved a bunch of stolen Pokémon cards at Target in early 2002.  The thefts became so frequent that I set up a special partition to watch the card display that used to be behind the last register at every Target.  Every time one of my investigators gets a case involving Pokémon cards I get the strangest sense of nostalgia.

Actually, I'm not that terribly surprised. The small size of the item makes it really easily to slip into a pocket or purse. That's why some small items, such as pocket knives, end up being packaged in large clamshell packages. I once witnessed a discussionbetween employees where there was only the VHS box, but no tape. The thief had cut open the bottom of the case, stretched open the plastic case if it was a childrens movie, then put the box back on the shelf. Both Sam's Club and Cosco discontinued the sales of tobacco products several years ago because those products had to be caged because theft was just too high. Not directly related, but some suppliers of parts such as processors or memory sticks require that the each item be shipped separately, especially if you ordered two or three pairs of memory sticks. While it appears wasteful in packaging, they probably had one-too-many claims where "I ordered two sets of memory sticks, but only one set arrived".

I know that if I stole something while growing up, even if it was a minor item like a candy bar, I know that I would experience the fire and brimstone of my parents. Yet, there are many people who work, take advantage, or exploit the system and take advantage of every loophole available. California's proposition 47 classifying theft under $950 as a misdemeanor, plus the reluctance of prosecutors to follow through on those theft reports, plus the leanings of those judges, results in retailers not bothering to file a police report. Thus, the exploit.

Actions have consequences. Sometimes, those consequences are unplanned, unintended, and unexpected, yet can last for years, decades, or an entire lifetime.

Actually, I would be surprised if a major retail chain is operating in San Francisco and coming out with a shrink approaching 2%.  The retailers that were having trouble largely have closed up shop already and moved on.  The National Retail Foundation was pushing the city of San Francisco hard to increase enforcement of shoplifting offenses.  I can't really comment fully given I don't work in the city and only know one person who does, but I would imagine the recent recall of the DA might have been of some help. 

Regarding security guards, what do you mean by that exactly?  A lot of stores have actual security guards that act as a visual deterrent and aren't really true LP in that they can't apprehend anyone.  Target was posting door guards (Target Protection Specialists) for decades and they had no authority to apprehend anyone.  Most LP is plain clothes and not uniformed, most states don't classify them as "true" security either.  For example, LP investigators in Arizona were not required to get DPS guard cards. 

The thing with Pokemon cards is that they have remained popular with younger more crime prone demographics for a quarter century.  That coupled with the fact that they are generally not secured due to being low value is why they are often a hot theft item.  The strange phenomenon to me now is that late 20s/early 30s types are usually buying up the Pokemon cards before anyone can steal them.

Regarding Prop 47, please refer to my comments regarding ARS 13-1805 in Arizona.  Felony shoplifting has been $1,000 in Arizona my entire 22-year career, Prop 47 is more in the norm for felony shoplift classification and not really an outlier.  The trouble you have in cities like San Francisco is an unwilling DA and Police Department to charge for property crimes in general.  I've given a couple examples already of past instances where cities in other states have held similar stances. 

[hotdogPi]

Shrink in the health/beauty department section at my local Stop & Shop before it closed was about 9%.

[Max Rockatansky]

Yeah that would do it.  When I was a district LP manager at Beale's Outlet there was about a half dozen stores that had over shrink of 4-7%.  None of them lasted three years before closed up.  Some we decided it was cheaper to eat the remaining lease and close early.  When I started the average shrink in my stores was 2.9%.  It went down to about 1.7% by the time moved on three years later.

[kalvado]

Yeah that would do it.  When I was a district LP manager at Beale's Outlet there was about a half dozen stores that had over shrink of 4-7%.  None of them lasted three years before closed up.  Some we decided it was cheaper to eat the remaining lease and close early.  When I started the average shrink in my stores was 2.9%.  It went down to about 1.7% by the time moved on three years later.

To bring that 8nto perspective... Published operations margin for major retailers is in 1.5-3% range. Pretty comparable to shrink
I wonder if profit reduction due to online competition is the reason shoplifting became more of an issue

[Max Rockatansky]

Yeah that would do it.  When I was a district LP manager at Beale's Outlet there was about a half dozen stores that had over shrink of 4-7%.  None of them lasted three years before closed up.  Some we decided it was cheaper to eat the remaining lease and close early.  When I started the average shrink in my stores was 2.9%.  It went down to about 1.7% by the time moved on three years later.

To bring that 8nto perspective... Published operations margin for major retailers is in 1.5-3% range. Pretty comparable to shrink
I wonder if profit reduction due to online competition is the reason shoplifting became more of an issue

With Beale's the problem was the stores were usually operated poorly and put in bad locations out west.  Given they kind of were going for that Ross/TJ Maxx type customer in the Outlet stores online competition wasn't much of a problem.  Shoplifting was a major problem, but it was also the tip of a massive iceberg of other shrink driving issues.  The big hook Beale's had compared to the other Outlet style stores was the discount days for senior citizens.  Worth noting my time at Beale's was circa 2010-2013 after I left a collapsing Sears.   

[Scott5114]

Is there any other kind of Sears?