BUSINESS LOSS PREVENTION TECHNIQUES
By D. J. (Skip) Lamoureaux, President
ABD FDEDERAL INVESTIGATION AGENCY, INC.
Loss prevention in the retail industry is concerned with the
disappearance of merchandise and currency. Most retail
establishments take a physical inventory annually, while some
do it semiannually. When the count is completed, the difference
between the actual inventory on hand and what it should be
according to purchase and sales records is called shrinkage.
The causes of shrinkage are recognized as employee theft,
shoplifting, and paperwork error. Other reasons for business
losses, such as robbery, burglary, and vandalism, are separate
problems. Shoplifting and internal theft are actually untold
numbers of separate incidents of larceny adding up to billions
of dollars of losses which are not listed in crime reports, except
for the relatively few cases where arrests are made.
Even though shoplifting is more often publicized than employee
theft, security experts are of the opinion that the in-house
thief is responsible for at least 50% of the shrinkage.
~ INTERNAL THEFT
The retail industry attracts many unskilled people who work for
minimum wages. Whatever the motivation, a fair percentage of
workers succumb to temptation and steal. Many of these employees
can be persuaded or prevented from stealing. Positive programs
of employee relations built around fair compensation, proper
surroundings, and employer-sponsored activities can improve morale
and concern for the success of a company. The only way to reach
some employees is through a highly visible security program and
a rigid company policy of prosecuting any employee caught stealing
Prevention of theft requires simple but sophisticated systems for
handling merchandise and currency, which not only deter but
which leave a trail of documents when any stealing takes place.
One important step that industry can take to prevent or reduce
internal theft is to avoid hiring the potential thief or problem
employee to the outset.
~ PRE-EMPLOYMENT SCREENING
When applying for a new job most people are requested to provide
some details about their education and work experience. It is at
this state, before an individual is hired, that industry must
make the effort to determine whether or not the applicant may
pose future problems, including dishonesty. Pre-Employment
Investigations are very important and highly recommed.
The Civil Rights Act of 1964 and other laws aimed at guaranteeing
equal employment opportunities for everyone have directly affected
the amount of information that an employer may request from a job
applicant. Questions about age, health, marital status, arrests,
religion, and race cannot be asked. While it is permissible to
ask about criminal convictions, it may be discriminatory if the
criminal activity in question is totally unrelated to the job
environment and if the conviction itself is an absolute bar to
~ CRIMINAL RECORDS
Such background information is usually not available to employers.
Most police departments are prohibited by law from disseminating
such information outside of official channels. Federal law
prohibits any criminal justice agency that receives federal funds
from supplying such information. In spite of the foregoing, such
data very often does "leak out." Many Private Investigators
access may supply this information with a consent release form.
~ FORMER EMPLOYERS
It is standard procedure to make inquiry from previous employers
regarding the job applicant. Since it is rare to get other than
positive responses, the reliability of such information is to be
suspected and weighed as a factor with other sources.
~ BACKGROUND CHECKS
A background check may be done in-house or through an outside
agency. However, since the job applicant is not required to
supply very much personal information these days, it may be
necessary to seek other sources. There are extensive accumulations
of private information about individuals who have credit cards,
bank accounts, hospital records, former employment, or paid taxes.
Obtaining such data may present problems with accuracy and
invasions of privacy. Many firms consider it foolish and useless
to pursue these sources, relying instead on the frankness of
personal references supplied by the candidate, which is not a very
good way to run any business.
~ CREDIT BUREAUS
Financial information about any individual is ordinarily not
supposed to be disseminated except in connection with credit
applications. Since the credit standing of anyone is a good
indicator of stability and other traits, there is no doubt that
such information is often sought as part of the screening
process. In our metropolitan areas, the major retailers have
for many years participated in mutual protective associations
where they maintain central records of their shoplifting and
dishonest employee cases. These files are used by the member stores
as part of the screening of new employees, as well as a background
source when deciding the course to pursue with an apprehended
shoplifter. Since these files fall within the jurisdiction of the
Fair Credit Reporting Act, they must be continuously purged of
any data that is over 7 years old.
Retailing is one industry that uses the polygraph to a significant
extent both for screening applicants and investigating suspected
crimes. The continued use of the polygraph in industry has
come under attack in the U.S. Congress and state legislative
bodies during recent years. Today, some 15 states either limit
or entirely restrict such testing. Conversely there are 19
states which officially recognize the polygraph as a necessary
tool for commercial purposes, and they have enacted licensing
and regulatory laws.
Herewith listed are some of the arguments that have been advanced
by both sides in the controversy over the polygraph:
1. The value of the polygraph
a.Reasonalbe to administer
c.Licensing generates confidence in examiners and in credibility
d.Dependable findings in most instances
2. Obstacles to use of polygraphs
a. Claims that it is self-incriminating
b. Violates right of privacy
c. Unions oppose and advise members not to sumbit to testing
~ OTHER LIE-DETECTION DEVICES AND TESTS
In recent years voice-stress measuring devices have been used
with success in that they have shown strong correlation with the
polygraph in their results. Opponents of lie-detection devices
have been active in opposing the use of such instruments on the
grounds that they are particularly incriminating, since they can
test for stress in the voice without the subject being aware
of it. This stress is the result of physiological changes in
the voice. The results are unlike voice prints, which are used for
other purposes. There are also a number of paper-and-pencil
tests available which are designed to predict or measure
trustworthiness and stability. The continued increase in the
rate of employee dishonesty has created a vast market for any
form of test that can offer reliability in spotting poor-risk
applicants for jobs, But remember some states restrict testing.
~ PREVENTION OF MERCHANDISE THEFT
The extent of employee theft can only be approximated since
inventory shrinkage reflects the losses from all causes. There
are so many ways that merchandise can be stolen by employees
that the imagination is the limit. The most successful way to
combat such theft is to prevent or discourage it. A concerned
company must have thorough systems of control and accountability
over merchandise from the moment it is received through the
various stages of preparing it for sale, displaying it to shoppers,
and finally handing it over to delivering it to the purchaser.
Rigid adherence to these controls requires dedication by executives,
supervision by middle management, interest and concern by staff
employees, and some security presence as a form of insurance.
Measures that should be taken to prevent some of the common means
that employees use to steal merchandise are mentioned later. Some
of these measurers require the employment of security personnel,
and oftentimes their use results in direct observation of attempts
~ EMPLOYEES' ENTRANCE
Wherever possible, employees should be required to use a
designated entrance when coming to or leaving work. In large
establishments this is usually the case. Locker, cafeteria, and
lounge facilities should be located in close proximity to the
entrance. The time-clock area should be set up between these
facilities and the store proper. A security person should be
posted here. Personal parcels and overcoats, and so on, should
not be carried into the selling or stock areas. Anything that
is carried through the time-clock area should be subject to
inspection. Female employees may be supplied with a clear
plastic purse for personal articles they wish to have with them
at work. Employees should be encouraged to keep small valuables
and money on their person. The right to frisk and even search
may be reserved by a company under certain conditions. The
employment application should so state, the requirement should
be publicized and fully explained, and this practice must be
enforced in a nondiscriminatory manner. The rule should also
apply to repair workers, contractors, salespersons, and others
who enter the store through this area.
Maintenance people and porters who must work within the store
during non business hours should be accompanied by security people.
Plainclothes detectives should occasionally be assigned to conduct
observations of such work.
A favorite method of theft is to hide merchandise among the
refuse before it is removed from the store. This material must
be carefully inspected before it is removed.
Employees can find remote corners to idle time away or to hide
stolen merchandise on their persons. Very often they will discard
their own articles of clothing and wear the pilfered items in
their place. Once the price tickets have been removed, unless
there is a direct observation, proof of theft is difficult to
establish. Whenever possible the stockrooms should be kept locked
as a security precaution and as a means of keeping employees on
the selling floor to improve customer service. Employees should
request identification of any persons entering stock areas who
are not readily recognized.
~ KEYS AND LOCKS
All doors should be equipped with strong tamper-resistant locks.
Where there are many doors within a structure a master key system
with changeable cores is recommended. Access to various areas
can be provided on an individual basis according to job require-
ments. Employees should be cautioned to safeguard their keys. In
the event of a lost key it may be necessary to change some cores.
This is relatively inexpensive when compared the changing locks or
cylinders. All keys should be collected and accounted for at the
end of the working day, except for those which are used to close
and open the premises. There are many keyless access control
systems available today which offer computer-related features
~ STASHING MERCHANDISE
Boxes, packages, and bundles of merchandise may be placed in various
places to be later taken away by the employee or a friend. Such
packages may be found in secure places on the selling floor. If
refuse is not thoroughly checked, the garbage containers may
become frequently used for such thefts. When such caches are
discovered, the recommended procedure is to establish surveillance
over the suspected packages.
~ UNAUTHORIZED MARKDOWNS
A favorite method of "theft" that most employees regard as
practically guiltless is to purchase articles at self-determined
discounts. Marking down the price of merchandise at the proper
time is an important factor in successful retailing. When
markdowns are taken, various records must be adjusted to reflect
the lower value in the inventory records lest a fictitious
shortage be created. Those employees who desire an item at the
height of the season, and certainly before discounts are in order,
create their own price changes in one way or another. One way
to discourage such activity is to frequently inspect goods that
are held or laid away for employees. Alert sales people or
cashiers may spot such price changes, but it may not be practical
to expect them to deny the markdown to coworkers.
~ RECEIVING AND SHIPPING
Platform and shipping employees can falsify the various receiving
and delivery documents. Sometimes this is done in conspiracy
with truck drivers. Incoming shipments should be physically
counted and verified against the accompanying documents. Receipts
given to delivery people should indicate any shortages found.
Shipments should be verified again for completeness when they are
unpacked and processed for the selling department. Valuable or
easily concealable items should be transferred in security bins
or racks. Test counts can be done randomly as a security
measure. The documents which match the merchandise must be checked
for detail, particularly as to retail price. Incorrect ticketing
will create shortage whether it is mistakenly or deliberately done.
Large companies may have one or more warehouses where incoming
merchandise is received for storage and transshipment to retail
outlets. Sometimes the ticketing operations are done in such
warehouses. Theoretically, a warehouse should be easier to control
than a store from a security viewpoint, since the environment is
closed to the public. Truck drivers should not be permitted
within the warehouse. Separate facilities should be maintained
for them outside the perimeter, where feasible. Receiving
platforms and shipping platforms should be physically separated.
Cargo documents and purchase orders should be matched, so that
proper bookkeeping is ensured. Cargo areas of trucks should be
locked and sealed when transporting merchandise. Drivers should
not have access to the goods. It is a good idea to inspect the
trucks from time to time to ensure that they are sound. Within
the warehouse there should be separate storage facilities for
merchandise which is most often or easily stolen. Such areas
may be specially safeguarded with locks, alarms, or even closed
circuit television. If possible, management should reserve the
right to search packages and persons. Typical warehouse
environments are conducive to such activities as organized
gambling or narcotics selling. These practices can easily lead
to necessity for theft. If the pushers and bookies can be
singled out, efforts should be made to discharge them. This type
of problem is never permanently solved. If management does not
stay alert, it will shortly return.
~ THEFT OF CASH
The theft of cash also presents a major problem to the retailer.
The case thieves are ordinarily those persons whose jobs require
them to handle money.
~ HOW CASHIERS STEAL
Without a program of prevention, there are numerous opportunities
for cashier theft, among them the following;
- 1. Helping self to cash from common drawer register
- 2. Failing to give receipt to customer and voiding the sale after
- customer leaves.
- 3. Avoiding ringing the sale; pocketing the cash
- 4. Under-ringing the sale; pocketing the difference
- 5. Failing to close register drawer after each sale
- 6. Imprinting more than one charge on a credit card transaction;
- exchanging surplus charge slip for cash
- 7. Allowing accomplice to remove cash; reporting the theft later
- 8. Raising the amount of a check taken from a purchaser;
- pocketing the difference
- 9. Accepting bad checks from accomplice
- 10. Selling to friends at discount
~ INVESTIGATION OF CASH THEFT
Proper and adequate investigation is hampered by frequent
employee turnover in retailing. Very often, by the time a
particular pattern of shortage is detected, the guilty individual
is gone. Some investigative procedures which may be used
according to modus operandi follow:
- 1. If shortages exist in common drawer registers, switch cashiers
- daily and keep "over and short" records to track
- 2. Frequent voids, no sales, or reports of till tapping should
- initiate surveillance of suspect at work. Results may be
- obtained by polygraph examination.
- 3. Spot checks of cashier's funds during working day
- 4. Integrity shopping
~ INTEGRITY SHOPPING
The integrity of cashiers can be tested by means of "honesty
shopping." These tests are conducted by specially trained people
who pose as customers. Shoppers may be in-house or contracted
from an outside service. Shoppers operate in different ways
according to the type of registers in use and the way a store may
conduct cashiering operations. One method is to shop as many
cashiers as possible with the expectation that dishonesty will
be detected. Another approach is to select as targets principally
those cashiers who may be suspected for one reason or another.
For example, many stores maintain ongoing records relating to
individual cashier performance. Those cashiers who are consistently
over in cash may be creating the surplus so it can be pocketed.
Additionally, shoppers may be given leads by supervisors or
other store personnel.
~ SHOPPING TEST PROCEDURES
The basic test in any integrity shipping operation is the "even
money buy." All other tests are built around this one. The
shopper selects an item and pays for it with the exact amount
plus the tax. The idea is to afford the employee who takes the
cash an opportunity to pocket it. Therefore the shopper must be
in a rush and have no time to wait for a receipt or normal
wrapping. In stores where the cashier function is separate from
the sales function, an "even Buy" is a bit more difficult
accomplish. An element of successful shopping is the ability
to later identify the documentation of the "buys" on the register
tapes or other sales records. This is accomplished in several
ways. The sale previous to the "buy" may be observed by another
shopper. Sometimes and "identification buy" is made after
test buy, but only if the cashier has done something irregular
The "uneven buy" requires that the cashier make change. This
buy is made by shopper number two whose principal function is
to observe how the money from the "even buy" is handled.
"even buy" may be part of a "double buy," wherein
on being handed the change from an "uneven buy," suddenly
decides to make an additional purchase. The shopper suggest
putting the item in the same bag, hands over even money, and
leaves. There can be many variations of these buys. In an
"exchange buy" the shopper hesitates in selecting between
items. Finally, the cheaper one is chosen and paid for, but at
the transaction is completed the shopper changes to the expensive
one, pays the difference and leaves. Shoppers should mark their
"buy" money or record the serial numbers in advance so that
proper identification can be made of the evidence later on.
~ MONEY ROOMS
A special area for handling and storing cash may be necessary in
large stores. Cashiers are usually supplied with working funds
which are turned back at the end of a shift along with money
received from purchases. The constant counting, disbursing, and
receipt of cash often creates shortages that are temporary
or permanent. While error in these operations may be common,
the theft of money by the employees is not rare. Money rooms
should be well constructed and burglar-resistant, if not
burglarproof. Alarms should protect the perimeter, the inside
area, and the safes. Holdup buttons should be strategically
situated. Routine operations should require at least two
employees in the room. Premployment screening should be
particularly thorough for such employees.
~ INVESTIGATION OF MONEY ROOM SHORTAGES
Following are some procedures for solving shortages originating
in the money room.
- 1. Thoroughly audit the entire room
- 2. Create deliberate error or shortage to test for reaction
- 3. Compare individual working schedules against times when
- shortages occur
- 4. Determine life-styles of employees
- 5. Since these shortages may be substantial, do not overlook
- possibility of recovering losses from insurance company.
Most retail stores have a fairly liberal policy of allowing
merchandise to be returned and of refunding the purchase price
by either cash or check. In some stores the refunding is done
through the selling department, where the merchandise, the price
ticket, and the sales receipt are examined and authenticated.
An authorization for the refund is issued at that point and given
to the customer, who presents it at a service desk where the
approval is issued and payment made. If price tickets or
receipts are not presented with the refund request in such
centralized operations, the customer is usually directed to the
selling department for verification of correct price. There
must be at least two employees directly involved in any refund,
one for examination of merchandise and approval and a second to
make the payout. Procedures must be established to constantly
monitor payouts against related documents and merchandise.
Deviations from these systems may be indicators of dishonest
employees. Price tickets should be found properly attached to
merchandise according to company practices. Data on these
tickets should match the merchandise being returned. Many
people switch to higher price tickets when seeking refunds.
Employees, in particular, can do this in comparative safety,
since they usually know what sort of information will be
accepted as legitimate for certain merchandise. It is advisable
to maintain records of refund activity for each employee for
possible detection of abuses of the system. Computers can
provide such facts to auditors and security departments at
There is an ongoing problem with safeguarding small items of high
value from employee pilferage between point of refund and return to
selling departments. Control records must be maintained for such
items and special locked storage facilities provided. Supervisors
must make daily inspections of records and facilities and see
to the secure in-store transfer of the items. Since the refund
operations are particularly vulnerable to employee dishonesty,
particular care should be taken in personnel selection. Temporary
vacancies due to illness or vacation should not be haphazardly
filled. Proper and adequate training of all employees involved
in the refund procedure should be rigid company policy.
~ DETAINING SUSPECTED EMPLOYEES
It is necessary to adhere strictly to legal requirements when
detaining an employee suspected of theft. Hiding money or
merchandise within the store or on the person is reasonable
evidence of intent to steal. Very often, however, the suspect
may offer some farfetched excuse for so doing, and the prosecutor
or the court may be of the opinion that a reasonable doubt exists.
The safest course of action is to wait until an attempt is made
to remove the property from the premises. The arresting employee
should be an eyewitness to the actual commission of the crime.
A rigid policy of prosecuting all employees caught stealing
usually has a deterrent effect on others. Once an employee has
been detained and accused of theft, the situation should be
construed as an arrest. If there is no intention to prosecute,
the investigation should be conducted without delay in an efficient
manner. The investigation should terminate with a signed confession
and a release against the company and its employees. The suspect may
be frisked or searched in order to recover the stolen property.
If the complaining employee has done the proper job of witnessing
the theft, the recovery of the evidence should not pose a problem.
If the detained employee is to be prosecuted, the police should
be notified at once and the investigation conducted and completed
without delay. In some jurisdictions the arrest process is
delegated to store security employees who deliver the necessary
paperwork to the police. Most states have passed legislation to
protect the retailer in the event of false arrest claims arising
out of detentions to determine the ownership of merchandise, provided
that there was reasonable cause to act and that the investigation
was conducted in a reasonable manner.
Cash shortages, failure to ring up sales, and failure to give
receipts are not proof of theft. Prosecution is not recommended
unless there is a direct observation of stealing and recovery
of some tangible evidence in merchandise or money. Identifiable
cash recovered from the person of the suspect is the best kind of
evidence. This is often referred to as a "pocket case."
questioning based on observation of highly suspicious actions
can often result in admissions of theft. Without further evidence,
the best course of action is to explore the feasibility of
obtaining restitution. Oftentimes, the employee admits to
frequent thefts going back over a period of weeks or months.
The amount of money involved can be significant. Very often
restitution can be ordered and arranged through the courts. It
is unwise to seek restitution without legal advice.
~ UNDERCOVER INVESTIGATION
Undercover investigation has long been used for providing
intelligence information and is no less applicable to retailing.
With sophisticated retail security, improved training and
techniques, and the utilization of modern technology's latest
advances in equipment and devices, the value and effectiveness
of undercover investigation cannot be minimized. As a loss
prevention tool, it can provide information to security and other
management that is not easily obtainable by any other means.
In practice, investigators posing as employees are placed within
a firm. This effects their "cover" and should be done through
normal placement procedures, with as few people "in the know"
possible during the term of the investigation. Resulting
meaningful information is then accurately conveyed, as quickly as
possible, to those executives who can put it to work. Once
placed, these investigators then blend and mingle, developing
relationships with their associates for the purpose of locating and
identifying employee dishonesty. This is the primary objective
under most circumstances and one which cannot generally be
accomplished by in-house security personnel, because of known
identities, techniques and so on. Additionally, relationships
which are fruitful are evolved over a period of time and require
patience and planning in developing the confidence of targets or
other coworkers. While some information comes from occasional
observation of isolated spontaneous thefts, the major portion of
criminal information is developed over a longer period, after
purposeful planning of the operative's approach to acceptance,
and effective performance. Most information is developed through
confidential conversation, initially with the use of comments
and remarks specifically designed to elicit a response. This, of
course, must always remain within legal boundaries regarding
entrapment. The loss prevention aspects of undercover investigation
apply not only to criminal loss, but also to loss by other means.
Loss and exposure to loss in operational areas can be pinpointed
through monitoring of adherence to policy and procedures,
conditions conducive to costly casualty loss, supervisory
inadequacies, systemic deviations, and so on. Also, loss
prevention can apply to loss of personnel. Here, loss is generally
insidious but can have devastating financial effects. This also
applies to loss, occasional and isolated as it may be, of public
esteem because of poor customer service or other reasons. All
of these factors contribute to loss, larcenous or otherwise.
Loss prevention is vital in each area to insure profitable
operation and to increase the "bottom line." Undercover
investigation can be effective in accomplishing this. Ordinarily
the information from undercover is used to develop cases in an
independent manner, so as to avoid exposing the original source.
When the information is deemed critical and there appears to be
little or no chance to proceed in another way, the cover may be
blown. Causes of business losses, other than employee-related,
may be due to shoplifting, robbery, burglary, bad checks, stolen
credit cards, vandalism bombings, and arson. Techniques for
prevention and investigation of the most prevalent of these crimes
are included in this section.
~ PREVENTION OF SHOPLIFTING AND OTHER CRIMES
The most efficient way to deal with the problem of crime is to
take necessary steps to prevent it from taking place. Although
it is unrealistic to expect to eliminate all crime, the proper use
of people and equipment will have some effect in reducing the
total incidence of theft and destructive acts. Some ideas are:
- 1. Security Guards
- 2. Plainclothes Detectives / Private Investigators
- 3. Fitting-Room Attendants
- 4. Shopping Services
- 5. CCTV Servaillance Systems
- 6. Employee Incentive Programs
~ SECURITY INVOLVEMENT BY STAFF
The successful security program is expected to prevent theft.
Since the commission of crime cannot be wiped out, recovery of
merchandise is equally desired. There are many retail stores that
do not have a security staff per se. In such companies the
security effort depends on sales help, cashiers, stock persons,
and others. Even where a security staff does exist, the total
security effort will be more effective if the other employees are
involved too. They must be trained to spot shoplifters and
taught the action to take to prevent the loss of merchandise.
Ordinarily, these clerks and salespeople are not expected to
apprehend wrongdoers. However, if specially trained and instructed,
anyone may be expected to take necessary action, including detaining
shoplifters. The actual apprehension of a person attempting to
steal merchandise from a store requires knowledge of penal statutes
and codes which must be strictly obeyed. lest civil and criminal
charges result from wrongful actions. The safest policy to
follow with all employees, except those specifically employed
in a security role, is to design programs aimed at preventing theft.
~ AWARDS AND BONUSES
Many employees perform better if there is an incentive program
that encourages interest and participation. When a bonus is given
to a salesclerk who pointed out a shoplifter, other employees
sit up and take notice. While it is reasonable to expect wide
participation in combating shoplifting, the average worker will
hesitate before turning in a fellow employee. Although cash
awards for such information are usually larger than shoplifter
awards, such incentives are not very successful. Some firms
pay bonus money to security people also, since this usually keeps
productivity at a high level. However, this practice has been
criticized as a bounty system leading to over zealousness and false
~ LOSS PREVENTION PROCEDURES
Although some shoplifting is inevitable, there are things that can
be done to keep it to a minimum. All employees must be committed
to enforcing those of the following procedures that are adopted
by the establishment.
- 1. Articles of high value and easily pilfered should be safeguarded
- under glass or locked away.
- 2. Article surveillance or chains should be properly used.
- 3. Merchandise should be returned to stock after showing it to
- 4. Displays should be set up so that they do not clock easy
- viewing by employees.
- 5. Before being handed over to purchasers, contents of preboxed
- merchandise should be inspected.
- 6. ID should be requested of any strangers in nonselling areas.
- 7. Price tags should not be loose or easily removed.
- 8. Prompt attention should be paid to customers, always.
- 9. Salespeople should not to turn their backs to customers.
- 10. Legitimate purchases should be easily differentiated from
- other packages.
- 11. All discarded sales receipts found on floor or anywhere else
- should be picked up.
- 12. Salespeople should be alert to the fact that luggage, when
- purchased, may be filled with stolen merchandise.
- 13. Frequent inventories of expensive or desirable merchandise
- should be taken to detect the existence of a problem, so that
- immediate measures can be invoked.
- 14. Premises should not become a hangout. Employees should be
- alert to possibility of mass shoplifting.
- 15. There should be frequent inspections for empty boxes or
- containers. The foregoing procedures are but a sampling of
- many steps that can be taken to combat losses. Other parts
- this chapter on loss prevention offer additional recommendations.
Shoplifters come from all walks of life, and they may be of any
age and either sex. Shoplifters may be classified according
to several categories: professional, amateur, juvenile, addict,
and kleptomaniac. Many people who steal for the first time
do so on impulse, and if they are caught, there is a good
possibility that they will quit. On the other hand, those who
get away with theft will most likely steal again, since it
becomes easier to pilfer each succeeding time. Shoplifting is
similar to many other crimes in that the lawbreaker will tend
to return to the same place where he or she was previously
~ SHOPLIFTING METHODS
Following are some of the multitude of ways in which shoplifters
- 1. Merchandise is concealed in boxes, bags or purses. Professionals
- may carry booster boxes.
- 2. Merchandise is concealed in clothing. Professionals may wear
- garments fitted with large pockets or hooks. Oversized garments
- may be worn to afford easy concealment.
- 3. Stolen garments are worn in plain sight and out of the store.
- 4. Merchandise is carried between thighs and hidden by long
- skirt or overcoat.
- 5. Professionals wrap garments around the legs and tuck them
- into tops of socks.
- 6. Small articles may be carried out hidden in the palm of the
- 7. Some thieves snatch articles and run out of the store.
~ INDICATIONS OF POSSIBLE SHOPLIFTING
Store personnel should be alert to the following signs that should
cause suspicion of shoplifting.
- 1. People wearing overcoats out of season, or raincoats on a
- clear day.
- 2. People carrying boxes, bags, or umbrellas which could be
- used to conceal merchandise.
- 3. Nervous-looking people who are constantly touching the backs
- of their heads, tugging at sleeves, or adjusting socks.
- 4. Exceptionally fussy people who cannot seem to make up their
- minds about a purchase, or do not appear interested in purchasing
- an article that they have been examining.
- 5. People who walk around and constantly keep one hand in a pocket.
- 6. People who come back to the same area of a store several times.
- 7. People who are busy looking about, rather than at merchandise.
- People who appear to be nervous.
- 8. People who walk into stockrooms or behind counters and have
- no business in such places.
- 9. Men who carry shopping bags.
~ APPREHENSION OF SHOPLIFTERS
Many states have enacted laws specifically aimed at shoplifting.
Otherwise the crime of shoplifting is covered by the larceny
statutes. Generally, once it has become evident that the intent
of the individual is to steal the article, the crime has been
committed. If the suspect secretes the merchandise inside a
shirt or under a dress, it may not be necessary to wait until
the person exits from the store. However, there are jurisdictions
and there are individual judges who do not agree on this point,
hiding that unless the suspect has gone past the last possible
cash register where payment could be made, the intent is not
clear and it can be rebutted. Therefore, unless the statute is
extremely clear on this point, the safest course of action is to
make the first contact with the shoplifter at the exit. The
store detective should attempt to keep the apprehension as low
key as possible. There is less chance of disturbing other
shoppers or of creating a physical confrontation when this is
done properly. Store personnel must be alert and watch for the
unexpected. The shoplifter may attempt to run, may assault the
employee, or may even pull a weapon. The training of the security
staff is the key to ensure proper action in accordance with
developing circumstances. When guards are posted at or near
exits, they should assist in apprehensions if requested.
Ordinarily, the suspect will come along quietly when asked. If
the detective has made proper observations, the recovery of stolen
articles should be uncomplicated. Suspects should be frisked for
weapons and, when necessary, a complete search may be made. The
use of handcuffs is recommended when appropriate.
A significant portion of retail sales is transacted by personal
checks. To many thieves, there is less risk in passing a bad
check than in shoplifting. Unless there are meaningful controls
that are adhered to by employees who accept these checks, the
losses can become staggering. The following guidelines will help
to promote caution in accepting checks.
- 1. Examples of bad checks
- a. Drawn on a nonexistent or closed account.
- b. A forged check drawn on a legitimate account.
- c. A counterfeit check.
- 2. Acceptance procedures
- a. Accept only personal checks payable to the store.
- b. Inspect the check:
- 1. No postdated or undated checks
- 2. If out-of-town bank, use extra care.
- 3. Must be written in ink; no erasures or corrections.
- 4. Numerical amount and written amount must agree.
- 5. Should be for exact amount of purchase.
- 6. Be careful of "starter" checks.
- 7. Be careful when customer appears unconcerned about price.
- 8. Company should maintain a listing of previous bad check
- passers; consult list
- 9. Call bank if amount is over a predetermined amount or
- 10. If bank is closed, suggest delivery of merchandise.
- 11. Do not be pressured into accepting check too fast.
- 12. Require valid identification.
- 13. Compare signature and photograph.
- 14. Record all information on back of check.
- 3. Acceptable identification
- a. Two forms of ID should be required.
- b. Legitimate driver's license.
- c. Licenses (pistol, and so on), permits or ID cards with
- d. Local Bank Card.
- e. Medicare cards for elderly customers who do not have
- drivers licenses.
Unacceptable identification includes: social security cards,
bankbooks, utility bills, library cards, birth certificates,
learners' permits, or membership cards.
~ INVESTIGATION OF BAD CHECKS
If a bad check is inadvertently accepted, the following procedures
should be instituted:
- 1. Insufficient funds
- a. Re deposit and notify maker.
- b. If still insufficient, request immediate payment; turn over
- to collection agency, or debt recovery service.
- c. Final alternative is prosecution.
- d. Check with police on local practice and procedure.
- 2. Closed accounts and forgeries
- a. Identify the check passer. This may be difficult or
- impossible because the check may have been stolen or the clerk
- may not recall the individual
- b. police reports and notification to banks, motor vehicle
- bureau, credit card companies tend to verify the depositor's
- statements in connection with the whereabouts of the check.
- c. Interview cashiers to get leads.
- d. Publicize current names or aliases being used.
- e. Communicate with other retailers and the police.
- f. Alert refund departments.
- g. Prosecute when absolute identification has been made.
~ CREDIT CARDS
Losses due to acceptance of lost or stolen credit cards are on the
increase. Suggested procedures which help cut such losses are:
- 1. Examine card for authenticity; expiration date. Imprinted
- name and signature must match.
- 2. Use terminal or telephone to obtain authorization.
- 3. Follow instructions according to code. If "hot card,"
- if possible. If above floor limit, may need additional ID.
- Customer may be advised "cash only".
- 4. Be aware that lost or stolen cards issued by out-of-state
- banks experience unusual time lag in appearing on "hot list".
- 5. Examine ID carefully; compare signatures.
- 6. Be wary of customers who appear unconcerned about price of
- 7. Watch out for customers in a hurry, particularly at closing
~ MISCELLANEOUS CASHIER GUIDELINES
In addition to adhering to acceptance procedures with checks and
credit cards, employees who handle sales transactions must be
constantly alert to render efficient service, pay attention to
prices, and safeguard the contents of registers. Training and
instructions such as the following should cover potential problems:
- 1. Know the merchandise; prices; number of pieces.
- 2. Do not turn away from an open register drawer; keep it closed
- between transactions.
- 3. Do not count the contents of register on the selling floor.
- 4. Do not leave register unlocked; take the key.
- 5. If unusual amount of cash has been taken in, request it be
- 6. If customer claims to be shortchanged, request assistance.
- 7. Allow only properly identified persons behind showcases and
- 8. Be alert to detect counterfeit bills.
- a. Portrait appears lifeless and background lines not distinct.
- b. Treasury seal may have uneven points.
- c. Border lines are not clear and distinct.
- d. May be printed on bond paper without red and blue fibers;
- or printed with red and blue lines to resemble fibers.
- e. Strip in $10, 20,50, 100.
- 9. Be alert for till tappers.
- a. They create confusion, drop change, start an argument,
- divert attention while accomplice steals from register.
- b. On any suspicion, close the drawer.
~ REFUND OPERATORS
Some shoplifters find it more lucrative to refund stolen goods
than sell them. Very often items that have been purchased with
bad checks are converted into cash this way, especially by
professionals. Some thieves find it less risky to seek a refund
for stolen merchandise without ever leaving the store. Some
policies which may be established to combat these practices
- 1. Make refunds payable by check in the mail.
- 2. Insist on price tickets and sales receipts.
- 3. Verify merchandise and price in appropriate selling department.
- 4. Examine documents for alterations or erasures.
- 5. If purchase was made by check, allow time to clear.
- 6. Make refunds on credit card purchases through account.
- 7. Steal an item of merchandise, return same item for a refund
- sales slip.
Shrinkage is an insidious illness which does not cure itself.
Proper systems will contribute toward prevention of losses, but
there must be constant follow-up and reevaluation to ensure that
what was adequate yesterday is still applicable today. Crime is
on the march, and new schemes are constantly being devised.
Expertise i loss prevention is as essential in today's retail world
as fashion and salesmanship. The merchant has recognized and
accepted the fact the money spent to protect company assets does
its share in providing profits.
Mr. Lamoureaux has contucted and supervised many retail undercover
operations for some of the largest retail chain stores within the
United States. Should you have any questions contact ABD Federal
Investigative Agency, Inc. @ (407) 777-2878 or E-Mail Compuserve
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