Minimize Theft - Information
Information
Page Number
Critical Aspects
Key Terms and Concepts
2
2
Apply Routine Store Security
Introduction
Shrinkage
Theft and Thieves
Risk Minimization
3
4
5
6
Customer Fraud
Credit card Procedures
Cheque handling procedures
8
8
Theft
Employee theft
Vendor theft
Armed and unarmed hold-ups
Cash handling
9
9
10
10
Minimize Theft
Introduction
Respond to and Report Theft
Anti-Theft Equipment
11
11
12
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Minimise Theft
This unit encompasses the competencies necessary to maintain a secure workplace.
Critical aspects of assessment
Evidence of the following knowledge and skills is considered essential to demonstrate competence in this unit.
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Consistently applying store policies and procedures and industry codes of practice in regard to store
security and theft prevention.
Consistently applying store policies and procedures in regard to following security procedures and for
reporting theft/suspicious behaviour to relevant personnel.
Monitoring stock, work area, customers and staff to minimise opportunities for theft.
Key terms and concepts
Authorization
This is provided by the credit card organisation to approve a customer’s purchase when it exceeds the store’s limit.
Cash Handling
The procedure of receiving, changing, safely storing and issuing cash through POS (point of sale) equipment.
Code of Practice
These are a set of recommendations and guidelines set down and agreed to by the parties involved.
External theft
Theft by somebody from outside the business or organisation, eg customers.
Internal theft
Theft by someone within the business or organisation, eg. cleaning staff.
Security system
Procedures or equipment designed to reduce the incidence of theft.
Shrinkage
The term used to describe the difference between what stock you should have according to records and what stock
you actually have.
Vendor theft
Theft by the supplier or deliverer.
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Apply Routine Store Security
Introduction
When we think of theft in the retail industry we automatically think of customers. However, there is a lot more to
losses in the retail industry than just those caused by customers.
These costs are enormous, not only socially but also financially.
Employees in the retail industry can directly affect the amount of shrinkage that occurs in their stores.
Why is it important to me?
The hidden costs of shop stealing
Higher costs of items so consumers pay more
Added burden on police and courts
Inconvenience of security measures in stores
The added concern about crime and public safety
Communities as a whole suffer when a business fails
Why is loss prevention so important?
A 2 to 3 percent loss of sales due to shop stealing can amount to a 25% loss in profit
It is estimated that shop theft in Australia amounts to $1.5 billion a year
Why is shop stealing on the increase?
Economic and social reasons such as unemployment may contribute to shop stealing
The increase of self-service and low-service retail encourages theft
It is psychologically easier to steal from a retail shop than from a person. Shop stealing is often seen as a
victimless crime
Merchandising for impulse buying encourages theft
‘Shoplifting’ to ‘shop stealing’ – a change of name. WHY??
There is generally a high level of tolerance by the general community towards stealing, and retailers as an
industry are trying to raise the awareness of the severity of the crime and its impact on society
The word ‘stealing’ is a stronger word, associated with a crime, whereas ‘shoplifting’ reinforces the public
perception of a misdemeanour
So why should I care?
If 2–5% of the stock is stolen from stores each year, imagine what this would mean if you could add that same
amount to your salary
Let’s see………..
$500 per week equals $10 to $25 per week extra, or $520 to $1300 per year
What can I do?
Provide good customer service. It is harder to steal if the customer service is good
Be aware of what is happening
Practise good housekeeping
Be conscientious and do your job properly at all times
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What is shrinkage?
Shrinkage is the difference between what stock you should have and what you actually have.
Causes of shrinkage
Error
Incorrect pricing
Incorrect change
Poor stock control management, eg.
deliveries not checked
Waste
Not maintaining stock
Not rotating stock or employing
FIFO principles.
Poor handling causing breakages
Poor merchandising, eg. displays
falling down
Theft
Customer theft
Employee theft
Vendor theft
Armed hold-ups and robberies
Error and waste are often two factors of loss and shrinkage that are overlooked in day-to-day practice in the retail
industry. Yet their contribution to loss is significant. With good work practices and employee care and knowledge
this type of loss and shrinkage can easily be reduced and in some cases prevented.
Shrinkage can be either known or unknown.
Known shrinkage is where the retailer can identify and record what happened to the goods.
Unknown shrinkage is unrecorded loss, generally where theft is the major contributor.
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Theft and thieves
Who are the shop stealers?
There is no stereotype of a thief. All types of people may steal. It is normal to pre-judge people on appearance, but
it is important to try to ignore these feelings as potential shop stealers use these prejudices to their advantage.
The latest research has found that middle-aged, middle-class women are more likely to shop steal than any other
group.
Why do people steal?
People steal for a variety of reasons, including:
 need
 peer group pressure
 habit
 upbringing
 thrill
 opportunity (some retailers make it easy to steal)
For theft to occur a person must have:
1) Desire 2) Ability 3) Opportunity
What can be done to minimise theft?
To minimise theft, the store must control the desire and ability of potential shop stealers and limit their opportunity.
This can be achieved by:
 balancing the desire for the product with some obvious security controls when merchandising a product.
 reducing the ability for people to steal by making the risk of getting caught very high. This is particularly
effective with MAMS.
 when merchandising, considering how and where products are placed to minimize the opportunities.
What are the different types of theft?
The broad term theft can be divided into 4 types.
 customer theft and fraud
 employee theft
 vendor theft
 armed and un-armed hold-ups
Customer theft
There are a number of categories that shop stealers can be divided into. Broadly these are:
 professional
 amateur
 opportunist
Aside from the opportunist shop stealer who has acted on an impulse or from peer pressure, most thieves are well
prepared and know the store and what opportunities it offers.
This is seen in the statistics on shop stealing. Thursday, Saturday and Sunday are the worst days. This could be
partially due to the larger number of people in the stores and higher level of younger casual staff. The times where
the incidents are higher also coincide with lunch times and the end of the day, when staff numbers are reduced and
staff attention may not be so focused.
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Styles and methods of shop theft
1. Palming
 This is very difficult to detect.
 The item is kept in the hand and placed in bag or pocket.
 It is often aided by use of a handkerchief, scarf or package.
 The person can be aided by an accomplice who will stand in the way to screen them.
2. Hiding on person
Women can hide items in their hand, shopping bag, down the front of clothing or under full skirts.
Men can hide items in pockets or down the front of clothing.
3. Bags from other stores, umbrellas, books, prams etc (anything in which stolen goods can be hidden)
Many shoppers will carry bags, but will also hold their wallet in their hand. This means that when they approach
the checkout they do not need to open their bag to remove their wallet, and risk revealing stolen goods.
4. Placing a bag on top of the shopping trolley
Goods can be transferred from the top tray of a shopping trolley into the bag while unobserved.
5. Shoppers wearing or carrying loose or bulky clothing
Goods can be hidden inside pockets or under clothing draped over the arm.
Clothing can also be placed over goods inside bags and baskets in order to conceal them.
6. People trying on items for effect
Example: jewellery can be unclasped and allowed to drop within the neckline. Clothing or shoes can be tried on for
effect, then conveniently ‘forgotten’ and worn out of the store.
Thieves may even leave their old clothing or footwear behind, walking out of the store wearing the stolen
merchandise.
7. Price tag swapping
Thieves my swap price tags, putting a lower priced tag on a more expensive item.
8. Working in teams
Shop stealers can work in pairs or as a team, by covering each other’s movements and passing stolen goods
between them.
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Risk Minimization
The best approach to minimizing loss is through prevention. However, retail staff should also be aware of
procedures and what to look for in customers (detection). Apprehension should only be used when there is no
doubt that the person has stolen an item.
Prevention
The following things will help to prevent shop stealing:
 providing good customer service
 maintaining good housekeeping
 reducing opportunities to steal by effective store layouts
 being well informed about stock levels
 being constantly aware of what is happening
 following store procedures properly, eg bag checks.
Detection
Watch for customers who:
 spend excessive time ‘looking’
 carry oversized bags
 refuse service
 display agitated body language.
Apprehension
 A customer suspect ed of shop stealing should never be out of sight
 A customer should never be accused of shop stealing by any staff other than security staff
 A suspect should never be searched by any other staff than security staff
 A suspect should never be physically detained by any other staff other than security staff
 The nominated security staff/personnel should always be approached
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Customer Fraud
Customer fraud is where customers deceive the retailer by misrepresenting who they are for the purpose of obtaining
goods or money.
Providing good customer service and following store procedures can help prevent customer fraud. Although customers are
always discovering new scams, being aware and observant of your customers will help reduce the opportunity (prevention)
and enable you to detect any attempts to misrepresent. Bad cheques and credit cards are the most common forms of fraud.
Be wary of the customers who:
 act unusually
 are in a hurry (eg. want you to move quickly because they have a taxi waiting) or nervous
 seem to have no concern over the number or size of their purchases
 have no other forms of identification
 have bandaged hands and say they can’t sign the slips properly (Always ask for a second form of identification).
Credit card procedures
Most credit card transactions are now done using electronic terminals and not on manual machines, so some of the checks,
particularly the lost or stolen check, is done automatically. However, there are still times when a manual credit card purchase
needs to be put through and it is essential to understand the security implications.
When you get the card look at the front and check:
 is it damaged
 is its expiry date valid
 is the embossing unaltered
 is the hologram unaltered or damaged
 is the number listed on the warning bulletins?
When you verify the signature check:
 that the back of the card is signed
 that the signature strip is unaltered
 that the signature on the slip and the card match.
When using an electronic terminal check:
 that the card details and the receipt are the same
 that the magnetic strip is not damaged if the terminal doesn’t respond.
What to do if you are unsure of the card or cardholder:
 ask for photo identification, such as a driver’s license, and check that the details on the card match.
 call for a supervisor who will probably contact the card company for authorization.
Cheque handling procedures
Cheques are not as common a form of payment as they once were. This opens an opportunity for fraud as shop assistants may
not be fully aware of procedures. Each retail store will have their own specific policy when it comes to cashing and receiving
cheques, but the following points illustrate the essential checks that must be made.
The cheque should be:
 Signed in front of the sales person or supervisor. Never accept a pre-signed check.
 Made out to your business. Do not accept a cash cheque.
 From an Australian bank.
 The date on the transaction should be the same day as the sale. Do not accept a cheque that is pre or post-dated.
 Check that the worded amount matches the numbered amount.
 Always ask for additional identification and check the signature.
 Have the customer print their name, address and phone number on the back of the cheque. Write the form of
identification used and, if it is a driver’s license, record the number and the expiry date on the back of the cheque.
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Employee Theft
Employee theft is a form of internal theft and employers often overlook its significance. Research suggests that
employee theft is a significant part of the overall shrinkage losses of a retail store and may be as high as 41% of
total loss. Employees include cleaners, stores people, security personnel or any other person employed within the
store.
While most staff are honest, given the opportunity, many people will take advantage of their employer. In many
cases the activity is not viewed as stealing but as a ‘perk’ of the job. Store policies that deal with theft issues
clearly and are well communicated to staff are a very effective way of reducing this type of shrinkage.
Below is a list of some of the ways employees may contribute to store losses. There may be others which are not
listed here.
 Removing cash from POS terminals
 Undercharging friends or family on sales made
 Altering documentation
 Deliberately damaging stock so it can be bought on staff discount
 Reducing or changing prices on stock for personal gain
 Putting through extra items on sales undeclared
 Falsifying refunds
 Eating items from stock and not paying
 Giving staff discount to friends
 Removing stock after closing time.
Vendor Theft
“A vendor is a person who delivers or supplies goods to a retail store”
Much vendor theft, which is theft by a supplier or delivery person, occurs through mistakes in paperwork or stock
count. These mistakes may be deliberate or accidental on the part of the vendor or delivery person. Thorough stock
control procedures in the storeroom and loading bay areas will reduce the chance of this type of loss.
Staff should be aware of the following:
 deliveries which are always made at the busiest times when employees are rushed and have limited time to
check arriving stock
 vendors who wish to stack incoming stock themselves
 poor paperwork
 open boxes which may have some of their contents missing
Staff should not:
 be rushed by vendors. Set procedures in regard to checking stock should be followed.
 allow delivery personnel into storerooms or loading areas unsupervised
 accept broken or damaged boxes as the contents may also be damaged.
Staff should check:
 all accompanying documentation. Invoices need to be complete with product codes, descriptions and cost of
individual items
 cost prices, and query any changes from recorded prices
 the contents of each box and mark them off as they go. This may be a random check so that the vendor is
unsure of when it may occur.
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Armed and unarmed hold-ups
The majority of robbers are on the lookout for premises that are isolated, easy to enter and leave and where the
cashier will offer the least resistance.
Although a hold-up takes less than 90 seconds on average, the robber will usually take the time to check out the
exterior and interior of premises prior to the crime.
Staff should be aware of people coming into the shop and browsing at length and then purchasing a cheap and
obvious item from the counter. They should also look out for a car driving slowly past more than once. In small
premises it is important that signs and shelves do not obstruct the view of the footpath and road in front of the
shop.
Under Occupational Health and Safety legislation employers have a duty of care to provide a safe
workplace. This extends to taking reasonable steps to minimize the likelihood of armed hold-ups
and the trauma that results from a hold-up.
Cash handling
Cash control is a very important part of minimizing theft. As with all other forms of risk minimization, correctly
following the set procedures is essential.
Security procedures can include:
 not allowing a register to fill with cash. Excess cash should be moved from registers frequently and at
random intervals.
 never counting cash out in the open or in front of customers
 never allowing unauthorised people behind the counter
 never discussing security arrangements with people outside the business.
Cash handling procedures
Staff should:
1. total the sale and inform the customer of the total amount
2. inform the customer of the amount of cash he or she has tendered
3. place the note tendered on top of the register drawer
4. take the correct amount of change from the register
5. count back the change to the customer
6. place the amount tendered into the register drawer and close.
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Minimize Theft
Introduction
The idea of minimizing theft means using various methods to make it more difficult for both internal and external
theft to occur.
These methods may range from relatively simple display practices, such as putting fewer items on display and
placing stickers on products showing the retailer’s name, to sophisticated electronic surveillance mechanisms.
Improved surveillance by natural means (lower display racks, convex mirrors and wider aisles) as well as
electronic means (closed circuit security cameras) all contribute to making theft more difficult.
The Australian Institute of Criminology reported that technology constantly allows new ways of tagging stock to
inhibit shop theft. The use of ink tags, which damage clothing with ink stains if not removed by the correct device,
has the advantage of being non electronic, thus reducing the cost and the need for maintenance. Ink tags have been
found to be far more effective than the use of detection tags, which more sophisticated offenders have learnt to
overcome.
The Australian Institute of Criminology’s report however, gave a warning that reliance on security devices may
generate a sense of complacency, which may leave businesses more vulnerable to the more professional offenders
who work out ways of overcoming whatever obstacles are placed before them.
The report emphasizes the need for security managers to take advantage of a number of methods, including welltrained floor staff. Technology works best when reinforced by motivated people and supported by community
standards. The random, unpredictable behaviour of store personnel makes them most effective in interfering with
shop thieves’ strategies.
Respond to and Report Theft
Apprehension is the last line of defence in minimizing theft and reducing loss. There is a number of guidelines that
should be remembered.
Having observed these guidelines, staff will be in a position where they are required to make a report and should
use the following points as a guide. Each store will have its own policy on handling these matters, but they
generally include points such as:
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never accusing a thief
not exaggerating or moralising a situation
not using discriminatory language
keeping answers and statements simple
giving clear and accurate descriptions of the goods stolen
describing the facts as:
what was seen
where the incident happened
when it happened
what staff did
what happened next.
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Anti theft equipment used in the retail industry
Video Surveillance
The video surveillance system consists of a series of cameras connected to a monitor and video player.
As video surveillance can be personally intrusive, eg in staff common rooms or customer change rooms, care needs
to be taken in its use.
Overt cameras are visible cameras that are not covered by any
legislation in NSW so the ARA (Australian Retail Association)
has developed a recommended Code of Practice for its
members which protects the rights of retailers, their employees,
customers, suppliers and others visiting the retail outlet. The
Code of Practice recommends that the business advertise its use
of cameras through signs and other means so that everyone is
aware that, on entering the business, they will be under video
surveillance.
Covert cameras are hidden cameras and are covered by the
Workplace Surveillance Act of 1998 and cannot be put in place
without applying for permission from a magistrate.
Electronic Article Surveillance (EAS)
Electronic article surveillance
equipment protects merchandise by
sounding an alarm when tagged
items are removed from the store
without the tag being deactivated or
removed.
Pedestal examples
Security tag examples
EAS equipment provides a deterrent
through both visible and hidden
means. It involves the use of
pedestals, tags and labels.
Label examples
Accessories
Mirrors
Valuable items can be hidden by partitions or shelving and
become easy targets for theft.
Mirrors allow staff to see over shelving and obstacles and
into tight corners.
Mirrors come in various sizes and shapes to suit all
situations.
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