As theft rises, stores step up anti-crime efforts
Stores are running online stings and sending security guards onto sales floors posing as customers. The FBI helped create a database for trading notes on suspects and their methods. Minneapolis-based Target Corp. even has a forensic lab and tracks video feed from its 1,700 stores at regional hubs.
"In light of today's economy and the expense pressure, it is an investment that shows good return," said Brad Brekke, a former FBI special agent who heads assets protection for Target. "There is definitely economic pressure generating more activity across the board — fraud, theft, cyber crime. The intensity has gone up as the economy has gone down."
The National Retail Federation, a trade group, says nearly half of 115 retailers it surveyed are spending more on crime-fighting — some companies spend more than $1 million a year just on personnel hired to stop crime rings. The NRF, which opens a loss prevention conference Monday in Los Angeles, says 92 percent of the surveyed retailers were victims of organized theft teams last year, an 8 percent increase, even as many saw slumping sales.
More individuals are shoplifting, as in several steak-stealing incidents in Kroger Co. grocery stores across the country this year. But retailers say the vast majority of their losses are from thefts by organized rings that usually send in a small group including a getaway driver, an in-store lookout and several "shoppers."
Joe LaRocca, a senior adviser for the retail federation, said it only makes sense to cooperate with competitors to fight the problem, which officials peg at $35 billion a year and rising.
"You know you're getting hit and your neighbor is getting hit and, by working together, you have a much better rate of identification and prevention," LaRocca said.
Wal-Mart Stores Inc., Saks Inc., Ann Taylor Stores Corp. and others share information in the 2-year-old national database with the hope of stopping organized teams that take medicines, popular-brand clothes, video games and electronics — items that can be quickly resold in small shops, flea markets and online.
"I'm even amazed sometimes at what these guys do," said Jerry Biggs, who heads anti-organized crime efforts for the Walgreen Co. drugstore chain. "They're in and out in four minutes. They can go from store to store, do this all day long."
In what Florida authorities dubbed "Operation Hot Milk," 21 people were arrested in March in connection with a multimillion-dollar baby formula theft ring. Generally, men acted as lookouts and getaway drivers while women slipped cans of powdered formula worth about $25 each into their bags. Polk County Sheriff's deputies began investigating in late 2008 after finding stolen baby formula during a traffic stop.
Biggs said the rings know more households are looking harder for bargains — often online, where many high-volume thefts are fenced, or in flea markets and small shops — during the recession.
"It's created a larger demand for product at lower price," he said. "People just think they're getting good deals."
Stores are trying to slow the theft rings with new packaging, less-accessible display cases, and electronic gizmos. But how many precautions to take is a delicate issue for retailers, who risk alienating customers by making them wait while items are retrieved from locked cases or embarrassing them when exit alarms go off. Customers could also be turned off by increasingly intense surveillance.
"You've got to balance the value you get from that," said Michael Brown, a retail strategist for the consulting firm Kurt Salmon Associates. "You don't want your loss prevention department to become your sales prevention department."
Art Wulfeck, director of loss prevention for Cincinnati-based Kroger, says it trains employees to be regularly engaging customers around the store — asking whether they need help or have questions — which also reduces theft opportunities.
Some Kroger stores have begun using the "Lane Hawk," a shopping-cart electronic device that alerts cashiers to items on the bottom, avoiding accidental or intentional failure to ring them up. Wulfeck said Kroger is experimenting with a display rack for selling infant formula that has an automatic delay before another item can be removed — so a thief can't quickly grab several cans.
"The typical shopper isn't there to buy 10 cans of formula," he said.
Shopper Pat Girod, whose son-in-law is a police officer, knows the crime prevention efforts are all around, seen and unseen, in her Kroger store in central Ohio.
She chuckled about the Lane Hawk: "It's a great idea ... I wish they had that in the parking lot, too, so I don't forget to load something in my car."