This Christmas, the risk posed to retailers’ margins from theft is greater than ever before. According to the LodgIC Intelligence Centre, the escalated threat results from three factors: increased activity by organised criminal gangs, reduced security staffing resulting from the hike in the Minimum Wage and a decline in the response to shoplifting by the police (who may be unwilling to respond to the theft of items worth less than £200).
Close to 80% of retail losses from crime are the result of organised retail crime committed by some 140 criminal gangs currently operating nationally. This is according to analysis at the LodgIC Intelligence Centre, which is operated by security consultant Lodge Service.
Gangs feel they can operate almost with impunity at Christmas. Their activities are hidden by large crowds in busy stores and Shopping Centres. Retail staff are often distracted and many of the temporary personnel hired for the season can be poorly trained in detecting and preventing the threat posed by shoplifters.
Few retailers are aware of the scale of the problem from organised retail crime. Often, this is because seemingly small and isolated incidents are in fact related. Criminals keep coming back to what they see as a soft target and then head off to another branch, perhaps in another city, in order to avoid detection.
To counter gang activity, analysts at the LodgIC Intelligence Centre are using data mining systems, working with a given retailer’s on-site and headquarters teams to investigate losses and track patterns of criminal behaviour. They can then link incidents to identified thieves, who usually have a string of aliases. The analysts look back at all suspect transactions to check names, addresses, dates, card details, locations and a host of other statistics.
This data is then used together with national crime reports, ‘whistleblower’ reports and other sources such that it can be anticipated where the criminal gangs are most likely to strike next.
The LodgIC Intelligence Centre then deploys store detectives on a daily basis to anticipate and stop crimes. Teams are trained to work undercover to identify criminals and undermine each threat to a store, Shopping Centre or logistics chain and then initiate a police arrest.
Self-service tills: ‘Help Yourself’
Britons are stealing £3.2 billion worth of goods from self-service tills each year. Unmanned self-service checkouts are a recipe for shoppers to help themselves. Almost 25% of people sampled in one survey admitted to stealing at least one item without paying. Another study shows that theft from unmanned checkouts has more than doubled in the past four years.
Significantly, 40% of those who admitted to stealing said the reason was that they knew they could ‘get away with it’. With domestic budgets squeezed this Christmas, it’s no surprise that there’s a sharp increase in such incidents.
The technology for detecting scan avoidance is receiving the full attention of the total loss community. This includes systems like Transpeye that links transaction data with video and other systems so that managers on the premises or located remotely receive automatic alerts – supported by filmed evidence – when an ‘exception’ occurs.
However, current technology still might not be enough to protect the retailer facing this type of threat this Christmas. Problems include monitoring a transaction to see if a low value item is scanned, but a higher priced product is bagged and taken from the store. Surveillance and analysis at the Point of Sale to confirm a physical match is a particular challenge.
Protection measures must be proportionate
Any protection has to be proportionate. Losses must be measured against the costs of protection, including having more staff on the premises to either serve customers or observe. This is a key issue in 2018 and beyond given the increase in the Minimum Wage and other inflationary wage costs.
The LodgIC Intelligence Centre’s management team suggests that a further strategy to consider is to train customers to stay honest. Clearly, when people believe that they’re not being observed and unlikely to be stopped and questioned then the likelihood of theft increases. A single incident of theft can develop into a habit for an otherwise honest customer.
Strategies can include managing live transactions remotely, with supervisors monitoring and looking for patterns of behaviour that indicate fraudulent activity at the Point of Sale. With the Transpeye software there is already the capability to do this, with Internet connection of video and data to the LodgIC Intelligence Centre.
Protective measures might also feature further changes to store layouts and use of a range of behavioural cues and signals to increase the customer’s sense of being observed. The remedy might not be in time for Christmas this year, but perhaps it should be included within a New Year’s ‘Wish List’ for retailers.