On Thursday, former Home Depot CEO Bob Nardelli likened the current and spreading rash of retail theft to the virus that, it could be argued it, caused it.
“Today, this thing is an epidemic. It’s spreading faster than Covid,” Nardelli told Fox Business. “The degree of severity now, it’s not just theft, it’s smash and grab. There’s an entitlement out there that if you have it, you’ve worked hard to earn it. I want it. I’m just going to take it.”
His alarm was tied to the news coming out of Walmart, which earlier in the week said it may have to close some of its more than 4,000 stores nationwide because the amount and degree of theft.
It’s jarring to hear that the nation’s largest retailer would so capitulate to the threat of shoplifting that it would consider such a retreat, but John Hassard, a loss prevention and security expert with Robson Forensic, takes a more pragmatic approach.
“Walmart wants what any company wants—to make money and not have to work too hard to do it,” Hassard told Sourcing Journal. “This is [Walmart’s] business model, and if the crime in this area is too much, we’ll close this one and open another somewhere down the road without significantly changing revenue.”
Hassard began working in loss prevention in 1990. Since then, the tactics and technology used by security and thieves alike have changed considerably, but, he says, the psychology and intention of perpetrators really hasn’t.
“There’s basically three kinds of shoplifters—kids who do it for the dare, then regular customers who occasionally swipe something, and the third kind,” he said. “The current term for them is organized retail crime and these are people who shoplift as a form of income. They look at it not unlike you and I… They do what they do to make money in the most efficient way possible. They treat it like a job and put some thought and effort into it.”
Retailers are so concerned about the rise in sophistication of these professional shoplifting rings that the National Retail Federation declared Oct. 26 to be Fight Retail Crime, a day of collective lobbying for the industry to get Congress to do whatever it can to help.
NRF said it celebrated the inaugural occasion by sending more than 800 message to 220 members of Congress, including Rep. Young Kim (R-Calif.), who introduced the Federal Investigations of Organized Retail Crime Act.
“In my district, we see another business victimized nearly every week,” Kim said. “People want safe communities to help address these crimes and I will keep working hard to support our entrepreneurs chasing their dream, creating jobs and strengthening our local economies.”
Some experts believe a tough-on-crime approach, from the federal level on down, is the only way to curb this crimewave that is already forcing businesses to raise prices on all consumers to cover the shrink.
“We need to pass better laws with stiffer penalties and we need all prosecutors to utilize severe penalties for anyone caught committing retail theft,” said Dr. Harry Porter, professor at Mississippi College, which offers masters degrees in loss prevention management. “In essence, retail theft crimes occur today primarily because no one fears getting caught or the penalty for committing retail theft crimes. Punishments should be swift, uniform, and severe to have any possible chance of reducing the kind of organized retail theft we are seeing in society today.”
When Hassard got into the business 32 years ago, the standard operating procedure for stores was to confront shoplifters, detain when possible and call in the authorities. He saw that begin to change in the 1990s as retailers made the calculation that not risking liability from confrontation was the wiser path to indemnity.
“When I started in the industry, the job was to catch shoplifters. We pursued them and we used force to catch them. That’s just what you did,” Hassard said. “But the end of the day it’s about money, so if while you apprehend shoplifters there are injuries, that costs money, whether it’s your employee, a bystander or the shoplifter that gets injured—that’s expensive.”
Hassard said the average shoplifter today walks out with between $100 and $200 of merchandise, which of course varies by each subsector of retail.
“Why are you going to risk somebody getting injured trying to recover $150 from a shoplifter? The math just makes sense,” he said. “The concept [is that] people are more valuable than whatever we sell.”
Hassard said that litigation avoidance strategy coupled with difficulties in maintaining staff that were an issue before the pandemic has forced many retailers rethink loss prevention and to essentially deputize all staff as loss protection agents in a far less aggressive way.
“You train employees what kind of behavior to look for and what to do about it. You don’t want them tackling anybody or chas[ing] them across the parking lot to get hit by a car, but what we can do is give extremely good customer service,” Hassard said. “Shoplifters are looking to steal as much as they can per hour. If you’re a shoplifter and there’s an annoying salesperson giving you good customer service, you’ll go to another store where they’re not going to be doing that.”
Hassard added that gathering data, reviewing security footage and maintaining a good relationship with local law enforcement are also tools that can help a retailer reduce loss, but, by far, the best thing a store can do to protect itself is provide excellent customer service.
“If they’re shoplifting, try to sell them something—kill them with kindness,” he said. “Don’t stand there and give them the evil eye—that’s 1970s security. Try to sell them something; they’ll go someplace else.”
But if store employees know their orders are not to confront or physically prevent a shoplifter from walking out with merchandise, don’t the shoplifters know that too?
Doesn’t that make the entire effort mere security theater?
“Yes, but a visual deterrent has some value,” Hassard said. “Look at Walmart with the door greeters. Whether it’s a big muscle guy with a shirt that says ‘Loss Prevention’ or an older guy with a cane, that has loss prevention value. Walmart has the volume to do an incredible amount of testing and they’ve been doing door greeters for how long now? It may not be a real strong, physically confrontational guy, but it’s still somebody there and you’ve gotta assume it’s pretty effective. They’re very smart, data management masters.”
Hassard said if better customer service doesn’t do the trick, it might behoove a retailer to pay an off-duty police officer to hang around the store.
Porter remembers the days of store operators being more proactive in their own defense.
“When I once worked as a police officer, one retail store in my town had two Dobermans let loose in the store when he closed up to keep people from breaking in the store during the night,” Porter recalled. “Funny, he never had a break-in at his store, but again, the cost today would keep most store owners from using this method of protecting their assets in the store.”
Porter differs from Hassard’s take that security theater and excellent customer service are about all that can be done to curb retail’s theft problem. And the fact that thieves as well as store employees know the softer rules of engagement will only make the problem worsen.
“Criminals are at their best when they know they will not get caught or stopped while committing their crimes and if caught they will not suffer any serious consequences,” Porter said. “Every retail store owner cannot afford to pay security to watch over their stores and so the cost of doing business is costing the customers who pay for goods that are sold.”
Hassard though recalls his early days in loss prevention, when confrontation was the policy and those who got injured were usually the employees.
“We would have meetings with the staff in the loss prevention department and I say, ‘raise your hand if you’ve been to a walk-in clinic this month,’ and all but two raised their hands,” he said. “Injuries… that’s not free.”
The stakes in the struggle to reduce theft may be the very existence of in-person shopping in the future.
“We’re still figuring out what brick and mortar in a digital world is going to look like,” Hassard said. “Most people have realized brick and mortar is not dead, so that’s just going to continue changing and retail loss prevention will as well. I don’t see organized retail crime going away, but I’m sure it will shift in the coming decade.”