Does Shoplifter Profiling Exist?

Do retail store loss prevention personnel use profiling tactics as a means of determining which customers are most likely to shoplift? The answer is, undeniably, yes. Shoplifter profiling is a loss prevention technique that many retailers are practicing silently in an effort to reduce inventory losses. Does that seem shocking? It shouldn’t. Large marketing firms and national advertising media use profiling every day as a means to improve their efficiency of being able to predict future behavior of consumers.

Can You Judge a Book by Its Cover?

If you think about it, the art of profiling people is part of our daily lives. It is how we judge who is friendly, who is dangerous, who is honest, and who is compatible with our values. The personal attributes of appearance and personality are definitely intertwined in our decision-making process for how we first perceive the image of people we meet. Usually, our initial impression of people changes once we get more information about them. It’s easy to be fooled by first impressions. People know how to dress for success and present a positive image when necessary. Similarly, most people have experience being treated differently when dressed up in nice clothes compared to when they looked unkempt. The critics of shoplifter profiling complain that first impressions gained by appearance alone may be incorrect or blinded by a biased stereotype.

Profiling as a Matter of Policy

Most corporate legal and human resource departments fear any mention of the words “shoplifter profiling,” let alone the practice of it. They are more likely to issue a policy prohibiting the use of customer profiling and forbid discussion of its benefits in training materials. To many in those protective professions, “shoplifter profiling” is synonymous with the words “bias” and “discrimination.” Although this fear is largely baseless, it is not totally unfounded. There have been some high-profile cases where misguided store security officers used poor judgment by harassing shoppers seemingly because of their race. In the past decade alone, several national retailers were embarrassed in the media after accusations of racial profiling were alleged by those wrongfully detained for shoplifting. These retailers further suffered from a series of multimillion dollar lawsuits alleging civil rights violations, false arrest, and negligence claims. After all this negative exposure, you would think that shoplifter profiling is dead … it isn’t.

Profiling Is a Naturally Occurring Act

All of us naturally profile the people we meet every day. We constantly make subliminal judgments about people based on their appearance, personality, and conduct. Refusing to talk about it or forbidding the practice in a corporate policy is a futile attempt to mask the exercise of human nature. There is no harm caused from the silent opinions that we all form or the judgments that we make about people we meet. The concept of customer profiling sounds like a valuable tool that every retail loss prevention professional should learn to hone. After all, profiling is a proven tactic used everyday by law enforcement as an efficient method for quickly identifying persons or places likely to be involved in crime. Virtually all investigative agencies use criminal profiling to narrow the field of possible suspects. Why shouldn’t retail loss prevention professionals be able to do the same?

Profiling by Another Name

Store inventory control is a common retail store practice used to capture data to track merchandise movement from receiving to sales. This includes a computer-aided system of monitoring physical inventory with point-of-sale and purchasing cross-checks that will keep a progressive store manager ahead of the shrinkage curve. We call this “inventory” and “sales analysis” rather than “inventory loss profiling.” These data, when analyzed, provide both a quantitative and qualitative basis for determining where, when, and how inventory shrinkage has occurred and provide a clue where to focus preventive efforts to curb future losses. So what’s wrong with loss prevention professionals applying a similar business profiling strategy to prevent shoplifting?

Shoplifter Profiling as a Strategy

Retail loss prevention professionals should be thoroughly familiar with store inventory loss data, as well as knowledge of shoplifter demographic data. Upon request, the best loss prevention professionals can tell you, with a good degree of accuracy, where the high-theft areas are located, what product lines are targeted, on what days of the week, the most active times of day, and who is committing the crime. In addition to objective data, experienced loss prevention agents have developed shoplifter profiles. This includes a list of shoplifters’ favorite theft tools of the trade, theft locations, and methods of operation. Profiling shoplifters in a business-like manner makes perfect sense. Without an organized plan, store security personnel will wander the store hoping to randomly spot a shoplifter in the act. This approach is not only highly inefficient, but it also puts pressure on the security officer to be productive. Undue pressure to make arrest quotas is what contributes to bad judgment and bad stops. As you can imagine, profiling shoplifters based on an objective business model using actual incident loss data is preferable to relying on unschooled officer instinct and emotional pre-judgment.

For shoplifter profiling to be used as a business model, store security officers should be trained to look beyond shopper appearance alone and focus on shoplifter behavior. Shoplifter profiles can be effective when compared to the behavior of other shoplifters observed in the past in similar circumstances. Obviously, the life experiences of the observer have an effect on his perception of the conduct of people with different backgrounds. Growing up or working in a prejudiced environment can color one’s perception of reality. An observer with more training and experience coupled with a more diverse background is more likely to categorize people broadly based on conduct rather than narrowly based on a single characteristic such as race.

You Can’t Manage What You Don’t Measure

Like anything else, the practice of shoplifter profiling can be abused by biased store security personnel, especially when exercising their power and authority to detain customers based merely on suspicion. For example, it should be considered a red flag if the store shoplifter photo gallery consists only of people of color or only of one sex or only of one age group. A prejudiced security officer might focus surveillance habitually on the race of a customer as an indicator of suspicion. When this occurs, there is a probability of having unreported bad stops as well. In the eyes of the law, racial profiling is considered disparate treatment of the public and can be the basis for a civil rights lawsuit alleging racial discrimination.

Racial profiling is the illegitimate practice that demands justification by store loss prevention agents who focus on ethnic appearance rather than conduct. During litigation or corporate investigation, a retail store might be required to justify a pattern of ethnic shoplifter detentions. This is usually done by studying prior incident reports, videotapes, and customer demographic data in an effort to prove or disprove that irregularities occurred. During this process, some retail store chains have been surprised to learn that their incident records and video surveillance tapes were either incomplete or corroborated the alleged discriminatory acts. In either case, the finding will prove that supervisors are not reviewing incident reports with a trained or unbiased eye. Mark Twain once said, “It ain’t what you don’t know that hurts you, it’s the things you think you know that really ain’t true.” Since store loss prevention departments are not considered profit centers, security departments may not be required to produce detailed incident reports and statistics for management scrutiny. It is a business reality that you can’t manage what you don’t measure. It is a litigation reality that you can’t defend what you are unable to prove.

Exclude Out as Well as Include In

Shoplifter profiling can further be enhanced and solidified by studying store apprehension demographics and inventory loss data. Armed with this knowledge, a loss prevention specialist can scan the store more efficiently by excluding possible theft suspects, certain store locations, under certain conditions, and behavior patterns. For example, one shoplifter profile suggests that people rarely shoplift while in the presence of their spouse, significant other, or parents. After these persons and their environment are scanned, their conduct might suggest that they have no intention of being dishonest.

Shoplifting is a crime of opportunity and desire. Trained loss prevention staff will spend most of their time observing those customers who demonstrate conduct where they ignore perfectly good opportunities to be dishonest. These customers would be excluded from consideration for the time being. However, a customer standing alone in a remote aisle, carrying a large shopping bag, and looking from side to side would be immediately suspicious until his conduct proves otherwise. Some areas of the store may never yield a theft due to high visibility, high traffic, or undesirable product lines. On the other hand, remote areas of the store may be very active theft locations as items are transported from other areas of the store. A customer walking in this area with a small concealable item may fit the profile of a potential shoplifter regardless of other traits.

A customer wearing tattered shoes might appear suspicious in a self-service shoe department until his conduct disproves a lack of desire to steal. A customer walking across a store carrying a small electronic item partially concealed in the palm of his hand might seem suspicious until several opportunities pass to conceal the product. In contrast, a customer wearing tailored shorts and a t-shirt may demonstrate the desire to steal but has no opportunity to conceal a large item under those clothes. Based on profiling and shopper conduct, the professional plainclothes security officer will scan thousands of customers a day and determine that 99% of them are legitimate shoppers. During this silent surveillance and profiling process, no customers are injured or wrongfully accused.

Surveillance Cannot Be Done Crudely

If trained loss prevention professionals perform shoplifter surveillance properly, most customers will never realize that they were being watched. Merchants don’t like monitoring their customers to prevent theft, but it is a matter of economic survival. The retail industry loses over $12 billion a year to shoplifters, and sometimes customer surveillance measures must be employed. No one likes being watched or made to feel untrustworthy. Knowing that you are under surveillance is an uneasy feeling and exacerbates customer relations. A problem arises when untrained store security staff undertake the task of customer surveillance and do so crudely. Common customer complaints about retail store security have to do with the perception of being stalked throughout the store in an effort to intimidate them.

Racial Profiling

Racial profiling is an improper and illegal practice based on the mistaken belief that certain ethnic minority groups are more likely to shoplift than others. Because of this misguided belief, store employees will focus their surveillance on the color of a customer rather than their conduct. Racial bias can blind store personnel and cause them to monitor only the ethic minorities and ignore the real source of inventory losses. Racial profiling eventually leads to a pattern of false theft accusations, wrongful detentions, and harassment when no real probable cause exists. The result is that a particular ethnic group will be made to feel as though they can’t be trusted and are unwelcome in the store. African Americans and Latinos have called it “shopping while black or brown.” Unless management corrects the wrongful conduct, civil rights violations will occur, and false arrest lawsuits will follow, along with the damaged reputation of the retailer.

Most retail inventory loss statistics have shown that the majority of shoplifters are of the Caucasian race. To concentrate surveillance on minority customers is not only improper, but also is an ineffective method of controlling shoplifting losses at most locations. The thought of racial profiling is distasteful. A 1999 Gallup poll confirmed that 81% of Americans disapprove of the practice. Despite this belief, the same poll indicated that &5% of African-American men said they had been victims of racial profiling while shopping. These polls and other media reports are what give the term “profiling” such a negative connotation. In some circles, any mention of the term “profiling” is tainted from the onset with distrust.

Written Policy May Not Be Enough

Most major retailers have published broad policies against discriminatory acts, but few have specifically addressed shoplifter racial profiling by its security personnel. Not surprisingly, incidents are occurring, which begs the question of how much racial profiling exists in retail stores? For example, in one major department store the security staff used radio codes (code-3) as an alert any time a Black shopper came into a sales area. In another store, 90% of the shoplifting apprehensions were of ethnic customers where the store demographic reports showed only a 15% minority customer base. And in still another store, security officers told sales associates to call them any time a minority shopper entered the sales area. Antidiscrimination policy needs to be put into practice and enforced at the security officer level for it to be effective.

Hiring, Training, and Supervision Are Critical

The only way to eliminate the illegal practice of racial profiling is to prohibit it from the top level of management. Retail stores need to have clearly defined and articulated policies to guide security staffers away from practicing racial profiling and must have a zero tolerance for abuse. The hiring process is a good time to screen out poor candidates who seem predisposed to prejudice. Comprehensive retail security training is absolutely necessary to assure that employees know how to perform the job objectively, lawfully, and with due care. Off-duty police officers working as store security need training too. You can’t assume that they understand the mechanics of shoplifting or that they will act appropriately and fairly toward all customers in the retail setting. Off-duty police officers must follow store rules when on the clock and not resort to conflicting street tactics when dealing with retail customer transactions. During the training phase, new loss prevention personnel should be taught how to observe customer conduct, use store loss data, and not base surveillance decisions solely on the race of the customer. Supervisors should always be on the lookout for signs of prejudice in day-to-day conversation and in written reports. Misconduct should be addressed swiftly. If racial profiling becomes routine in shoplifter surveillance and detentions, then it is because store management didn’t care enough to correct the problem or instead chose to ratify the behavior.

Conclusion

The concept of shoplifter profiling is a valuable tool that every retail loss prevention professional should learn to hone. Profiling shoplifters is not an evil undertaking in the hands of trained professionals. Shoplifter profiling can be an efficient way to focus on the sources of inventory shrinkage using a store business model that is supported by actual loss data, incident reports, and based on the behavior of other shoplifters observed in similar circumstances. Maintaining accurate business records will allow supervisors to monitor success. These same records will provide an adequate basis to investigate or defend claims of alleged misconduct.

Management Attitudes Toward Shrinkage

We support the prevention-over-apprehension philosophy but recognize that some on-going level of shoplifting is inevitable, despite all preventative efforts. In those instances, the staff must be aware of company policy on how to deal with persons seen shoplifting. Company policy can follow one of a number of options:

Option 3 carries with it the necessity to make the detention legal to avoid potential civil liability and also presents a variety and/or combination of possible actions after the detention, including

The necessity to make a legal detention cannot be overstated! Significant potential legal liability inures if a shoplifter suspect is wrongfully or improperly detained. The guidelines for meeting the legal requirements are contained in state criminal laws commonly known as “Merchants Detention Statutes.” These statutes, which vary from state to state, generally provide civil liability protection to the merchant if the merchant has what is legally known as “probable cause” for believing the person detained has, or has attempted to, illegally take the merchant’s property. These statutes also set other requirements and/or restrictions on the merchant’s behavior.

What Is Probable (Reasonable) Cause?

Probable cause is best defined as existing when the facts and circumstances (known to the arresting person) are sufficient in themselves to warrant a reasonable person to believe that an offense has been committed or is being committed by the person to be arrested. How can the merchant or his loss prevention operative establish probable cause? Does any degree of suspicion rise to the probable cause level? Is second-hand information sufficient to establish probable cause?

In an effort to make establishing probable cause uniform within the retail industry and remove individual interpretations and/or definitions of a complex legal concept, the industry has generally accepted the “six steps” as the standard for assuring that, to the extent humanly possible, the probable cause requirement has been met when the six steps have all been met. While the steps are not a legal requirement for establishing probable cause, they do provide an understandable, objective, and easily articulated standard easily understood by LP personnel, leaving no room for creativity in determining if probable cause exists and minimizing situations which may put the retailer at civil risk.

The “six steps” are

The establishment of probable cause does not mean the retailer is now out of the woods when detaining shoplifters. Merchant detention statutes, while permitting detention on probable cause of shoplifting, also set requirements for the conduct of the retailer after the detention is made. A breach of these requirements, or other conduct which is injurious to the suspect, also makes the retailer vulnerable to a civil suit for damages. What are these restrictions on the retailer’s conduct?

Merchant detention statutes generally permit detention for the purpose of conducting an investigation into the ownership of the merchandise in question, and such investigation must be conducted in a reasonable manner and for a reasonable time. The merchant’s ability to search the suspect for stolen property is either prohibited or limited by these statutes, as may be the retailer’s ability to photograph and/or positively identify the suspect.

With regard to the arrest of the suspect, once it has been positively established a shoplift has occurred, we suggest you consult the appropriate state law and/or an attorney. Some states permit a “citizen’s arrest” under these circumstances, whereas others permit only detaining the shoplifter until the arrival of the police, who actually make the arrest.

There are still more areas of potential grief for the retailer when detaining shoplifters, including committing (either intentionally or unintentionally) the following torts (civil wrongs):

In torts, the element of “reasonableness” is a key factor. Just what is this concept of reasonableness? Essentially, actions which are reasonable are those which a hypothetically prudent, reasonably intelligent person would consider to meet the judgment that society requires of its members for the protection of their own interests and the interests of others. Conversely, actions which outrage, vex, appear malicious or excessive, or tend to make a person angry when considering the alternatives available may be considered “unreasonable.”

Since the test of negligence or appropriate behavior when reviewing intentional torts is reasonableness, the ability to avoid unreasonableness is essential. How does someone avoid being unreasonable? Since the question of reasonable behavior is one of fact for a jury to decide, no black-and-white answer can be given. However, if a person knows the concept and limits his behavior to actions that are demonstratively necessary and prudent, and which do not exceed the bounds of propriety, and which would not be offensive to the average person under the circumstances, then chances are those actions, if reviewed, will be considered reasonable.

Malice, as mentioned earlier, is something done solely to annoy or vex; something that is done out of ill will with no justification and in wanton and willful disregard of the likelihood that harm will result. Malicious acts can never be reasonable.

May we suggest that, for a fuller understanding of the implications of these legal aspects of a shoplifting detention, you review the section “Legal Considerations” for more details.

As stated elsewhere, what may appear to be a simple process (catching a shoplifter) is really quite legally complex. After probable cause for the detention is established and all the requirements (or prohibitions) of investigating the incident are met, properly executing other actions not specified in statutes is also essential to a subsequent successful prosecution. For example, the collection, documentation, and preservation of any evidence (e.g., the stolen merchandise) is extremely important. If the collection or preservation of evidence does not meet accepted legal standards, it may be excluded from admission into evidence at the criminal trial, resulting in the dismissal of the charges against the suspect, opening the door to a possible civil suit for false arrest or malicious prosecution. Careless publication of a suspect’s arrest may violate his privacy rights; the use of excessive force may negate an otherwise totally justified arrest and result in being sued.

Because the process of dealing with a shoplifter is fraught with so many dangers unless adroitly handled, documenting the details of how it was handled takes on a vital role. An unbiased, accurate, and detailed written report of all phases of a reasonably conducted detention/arrest is the retailer’s best friend if challenged as to the propriety of his actions. A well-written, complete report is a best friend to the defense of a civil suit.

Anything else which requires mention regarding shoplifting? You bet; we’re not quite finished yet.

Consider “questionable” stops (sometimes referred to as “bad stops” or a variety of euphemisms such as NPD or nonproductive detention). However they are referred to, they are shoplift detentions where no stolen merchandise is found. Such situations are invitations for civil suits for false arrest/imprisonment unless properly and adroitly handled. Questionable detentions may result from an agent’s carelessness in simply ignoring the six-step requirement or from a “customer” who intentionally sets up a situation to appear like a shoplift, hoping the store will make a detention and set the stage for a civil suit. In either event, how such situations are handled will go a long way toward determining the eventual outcome.

We suggest that. in questionable detention situations, the following rules be followed:

The store will normally know shortly after the event whether it will result in further action by the offended customer. We suggest that the store take the initiative after such an event and contact the customer, apologize again, and see what action the store might take to set the matter right. Perhaps sending a dozen red roses or offering to send a gift certificate (in an amount which is not overly large but which will also not offend by its meagerness). Letters of apology for the inconvenience caused the customer, if sincerely and properly written, are also often helpful. Remember, the objective is to avoid getting attorneys involved and to forestall the filing of a lawsuit.

A final note on the subject of potential lawsuits: Whenever a complaint is made against loss prevention personnel or the handling by them of a specific incident, it is incumbent on store management to thoroughly investigate that complaint. One would hope that by reviewing written reports and interviewing percipient witnesses, the complaint will be shown to be unfounded. Occasionally, however, a complaint will be determined to have merit. When this is the case, it is vital that not only is appropriate disciplinary action taken against offending personnel, but that every effort be made, within reason, to satisfy the aggrieved party.

See the index for “Litigation Control”; covered elsewhere herein is the use of civil remedy or civil demand.

Senior Management Sets the Tone

The tools that have generally been accepted by retailers to reduce shrinkage losses, such as EAS and CCTV, are widely available and extensively deployed. Likewise, the formation of a loss prevention or assets protection division charged with the establishment and execution of shrinkage reduction initiatives is a very common aspect of any retailer’s organizational chart. If you accept these statements as accurate, then a question is necessarily raised regarding how the wide variances in shrinkage losses between one retailer and another can be explained. If the same solutions are applied, how can the results achieved be so dissimilar? As is true with any particular aspect of a successful business enterprise, the level of involvement and support that senior management gives to the control of shrinkage is critical to the success of those efforts. Losses attributable to shrinkage, if not closely monitored and controlled, will have a significantly negative impact on the profitability and sustainability of any company in much the same way as declining revenues or escalating expenses will. Each element must be continuously evaluated with appropriate actions taken whenever results do not match expectations.

You would be hard pressed to find any member of senior management who would not respond in the affirmative if asked whether the control of shrinkage losses was critical to their business. Likewise, most would feel that their level of involvement in these efforts was adequate to establish the priority level needed to achieve the expected results. Unfortunately, this many times is simply not the case.

The key role of senior management, as relates to shrinkage, is threefold. First of all, they must be well versed in the current shrinkage trends, as well as understand the overall elements and objectives of the shrinkage reduction program. Second, they must be seen as advocates of the process. This can be accomplished by their regularly taking the opportunity to discuss specific aspects of the program which may or may not be receiving the required attention or execution level, and offering their assistance if needed. Last, they must acknowledge the results of newly completed store inventories, both positive and negative, and provide the leadership required to reestablish the commitment to necessary programs and goals.

This personal involvement by senior management in the process will place the control of shrinkage losses in its proper place along with the other challenges facing the business and clearly demonstrate that it is a priority for the management group as a whole.

Communicate Results: Both Successes and Failures

Retailers generally perform store inventories on a cycle basis between the months of January through October. This process provides the best opportunity to communicate the results of those during each of the weeks in which inventories are taken. Exactly how this communication takes place depends on each individual company.

Many companies have regularly scheduled weekly meetings which are attended by operations, merchandising, and other headquarters personnel. While the main purpose of these meetings will generally be sales and sales-related topics, they also offer the best opportunity to review both weekly and year-to-date shrinkage results, as well as analyze specific shrinkage issues and solutions. Properly formatted, each week’s inventory results can be summarized to provide a clear understanding of overall loss trends as compared to previous years. Depending on the level of detail provided by the physical inventory process itself, similar trends could possibly also be reviewed for key merchandise departments or even specific items (SKUs).

Presentations of the type described will inevitably generate comments and discussions among those present and provide an excellent opportunity for senior management and others to weigh in on the progress being made in the shrinkage effort, or the lack of it. While this type of discussion will certainly generate some level of discomfort during the meetings, it will also squarely establish shrinkage reduction as an important goal which everyone is expected to be attentive to. Where the meeting process described here is not available, the information should be provided in a report format and distributed at the end of each week. In this circumstance, consideration must be given to providing a summary (2 pages maximum) which is both informative and actionable. The first page of the summary might include bullet points of specific highlights from that week’s results. Copies of the report should be forwarded to executive management and all department heads. Executives wishing more information on specific inventories shown in this summary can then refer to the more detailed reports available. Again, this provides senior management with an opportunity to acknowledge positive results or raise questions regarding results which did not meet goals.

While the benefits of regularly communicating inventory results are fairly obvious, there is another major benefit that is not. A weekly analysis of shrinkage results, against last year, provides a continuous measurement of the effectiveness of current shrinkage initiatives. As a result, the opportunity exists for adjustments to be made where specific parts of the program are not having the desired impact, or where areas of shrinkage are identified which are not addressed by the current program. It will generally fall to the loss prevention/assets protection group to identify these opportunities and appropriate solutions. Along with this will come the need for LP/AP to coordinate with other areas of the company (such as operations or ISD) and secure their support and participation in the new initiatives.

Shrinkage—Controllable Versus Noncontrollable

Shrinkage losses for any retail organization will ultimately become a line item on the company’s Profit and Loss (P&L) statement. While these losses clearly represent an expense, they are unlike most other expense categories which can usually be tracked and monitored on a daily basis. There would be little disagreement that some shrinkage loss occurs each day during the normal course of business. However, the exact amount of that loss can only be known, and properly expensed, following a physical inventory.

Additionally, it is important to recognize that regular and detailed information for other expense items such as payroll allow store management to make appropriate adjustments in the level of spending, and thereby avoid an over-budget result. The reality is that very little can be done to avoid a shrinkage loss which has already occurred by the time it is identified. This circumstance can easily create a sense that shrinkage losses represent an expense which is really noncontrollable. Nothing could be further from the truth.

In a very broad sense, the whole discussion of shrinkage, and a programmed response to it, really starts with a company culture that believes that such losses are completely controllable; furthermore, that the progression of losses must be monitored and dealt with like any other controllable expense on the P&L. If that attitude is part of the belief system within a company, then all the things that would normally be done to keep that expense under control become clearer. If that attitude exists, management at all levels will understand the importance of their daily involvement and their personal accountability for failing to do so. If it is not, then there can be little expectation that any shrinkage reduction program will actually affect the results.

It is here that senior management plays a critical role in establishing the correct thought process.

Know Your Company’s Shrinkage Tolerance Level

It is very unlikely that a member of senior management within any retail organization would state that the company does not have a very low tolerance level for shrinkage losses. This would seem to be especially logical if you consider that losses due to shrinkage represent one of the few P&L line items for which a company receives absolutely no benefit.

At this point, however, if senior management is not setting the tone relative to shrinkage response, if inventory results are not widely communicated, and if it is not made clear whether these losses are considered controllable or noncontrollable, then it will not really matter what is said about the tolerance level. In this situation, what is really communicated is that a low shrinkage is hoped for, but a higher result is understood and tolerated.

To determine what a company’s true level of shrinkage tolerance is, you must merely observe what amount of shrinkage is required before a concern or sense of urgency is expressed. Put another way, what happens when a specific shrinkage goal is not achieved by a store, a district, or a region? In practice, if the stated goal is 1.00%, but specific concerns are voiced only in those instances in which results reach 1.70% or higher, then the true tolerance level is something just under 1.70%. This tolerance level will also more closely represent the actual shrinkage result achieved by the company than either past history or stated goals.

Changing a tolerance level within a company which has previously provided somewhat conflicting messages will require a serious commitment to do so. It is human nature to resist change. To implement a new thought process about something as potentially involved as shrinkage prevention will require an aggressive and determined effort.

Poor Performance Should Require Heightened Effort

Any effective shrinkage reduction program contains a number of elements that generally apply to all operating locations, as well as other key aspects of the business enterprise. These elements represent the basic parts of the program that are proven to reduce shrinkage, and that members of management throughout the company are expected to execute.

However, if you adhere to the business philosophy that 80% of the problems impacting the business are caused by 20% of the operation, then it would follow that those problem aspects should receive more attention than the group as a whole. Another motivation for taking this additional step is that a focus on your biggest opportunities should also provide the largest return on investment (ROI) for your efforts. As sound as this logic appears, the development of specific program elements to address high shrinkage locations and functions is not necessarily a common practice within the retail industry. In fact, it is not at all uncommon to find companies that will continue to approach solving their shrinkage problems in the same way as they always have, but somehow expect different results to occur.

Carrying on with this thought process, it is important to structure a High Shrinkage Response Plan that can be implemented whenever inventory results do not meet goal. While the construction of this plan will depend somewhat on the culture of each company and how things are best accomplished within that environment, an effective plan would normally contain the following elements. While these particular elements relate to a store location, the same thought processes could be used in a distribution center or other operation.

Have Broad Accountability

Like many other aspects of the business, real success in shrinkage reduction is dependent on the concerted effort of a number of different areas of the company—not the least of which is the loss prevention/assets protection division, which plays a critical role that is clearly understood. For the purpose of our discussion here, however, we are going to concentrate on three other key areas: operations, merchandising, and distribution. Senior management must understand the critical role each of these areas plays and ensure that the control of shrinkage is a fundamental part of the thought process employed by each in the daily performance of responsibilities.

Set Higher Expectations Every Year

Just as sales and profits are expected to improve each year, shrinkage losses must also consistently improve. In an environment where this is not the case, it tends to become somewhat of a self-fulfilling prophecy. Following a year of acceptable shrinkage, where the history of a roller-coaster performance exists, it will generally increase the following year. Everyone expects it to happen, so no one is surprised when it does. This, of course, has less to do with bad luck and more to do with a lack of effort and focus. It is widely accepted that shrinkage results will follow effort by as much as 12 months. Therefore, a company which allows its focus and attention on shrinkage to wane following an acceptable year will very likely experience an increase in shrinkage the following year that will not be acceptable. As a result, it is critical to set challenging, yet obtainable, shrinkage goals every year. Senior management staff must remind everyone at the outset of each inventory period what the goal is and what their expectations are for its achievement. A truly effective shrinkage reduction program is one that produces positive results year after year.

Considerations for Cultural Change

In a perfect environment where the culture of your company will embrace the shrinkage reduction ideas described here, the only thing left to do is implement and execute. Where this is not the case, then, more work will need to be done. Where senior management staff are hesitant or unwilling to implement the admittedly aggressive elements of the shrinkage reduction program outlined in this section, then it falls to the loss prevention/asset protection executive to carefully address the concerns and secure the support of those individuals.

The best process to follow to achieve the desired end will vary somewhat depending on what specific concerns have been voiced by senior management. LP/AP must carefully listen to these concerns and establish an overall strategy to address them. Part of that strategy will certainly involve providing detailed information which clearly shows the shrinkage problems that the program is intended to resolve. Management must understand the size of the problem to clearly put into prospective the return on investment that will come from the effort being recommended.

In circumstances such as this, it is generally always appropriate to demonstrate the effectiveness of your program through a test in a specific area prior to requesting its implementation everywhere. Establish criteria that will show the success (i.e., heightened awareness of shrinkage problems and solutions, reduced losses in the test area, etc.) and ensure that these can be assessed during the course of the test. Make certain to keep the decision makers informed relative to preliminary results as the test is progressing and listen carefully for any suggestions as to how the test can be altered or improved. Quickly implement those changes that are right to do. Be prepared to demonstrate an achievable return on investment and be flexible as to how many capital resources are required to perform the test. One consideration should be to identify a member of operations (district manager or regional vice president) who would be willing to support the test within his respective area. It will be important to the success of this test to have the involvement of someone who can help describe the benefits he experienced as a result of his participation. Of special interest will be comments from affected store managers as to the impact of the program on their store employees. Again, did the increased training and awareness relative to shrinkage opportunities have a positive effect on both the overall operation of the store and the reduction of losses?

Always remember to prioritize the things you need in order to accomplish your goals. Effectively demonstrate how those things will add profit and value to the company. Build partnerships based on respect and trust, which can help you in your efforts to implement new processes within the corporation. Work to ensure that you and your group are viewed as students of the entire business, not just of your specific area of responsibility. Above all, enjoy what you do!

Increased Authority

With full police powers, the security staff becomes more than a guard force. Specially licensed security officers may make arrests that ordinary citizens are generally not allowed to make. The difference between the inherent authority of a private or citizen’s arrest and that of the licensed officer usually depends on whether the offense was a felony or misdemeanor.

In many states, citizens may arrest someone whom they have witnessed committing a felony. In some areas, this authority includes arrests based on probable cause if, in fact, the felony was committed.

Generally, a private citizen may not arrest someone who has committed a misdemeanor except where local legislatures have passed special provisions allowing such arrests. The most common example of this law is found in the merchant’s statutes which state that retail merchants or their employees may arrest for shoplifting, generally a misdemeanor offense.

With full police powers, security officers may arrest for felonies committed in their presence, felonies based on probable cause, and certain misdemeanors as provided by statute. In brief, their authority is enhanced considerably to include a wider range of criminal activity.

Authors’ Note: In some states (California, for example), a private person may arrest another for a public offense committed or attempted in their presence. CAS, JHC

Reduced Risk of Liability

Tort liability caused by arrests that are later ruled illegal because the officer did not possess the requisite authority can be reduced. A misdemeanor arrest made consistent with the officer’s special powers would be valid. The same arrest made by an unlicensed private security officer would be invalid and, hence, illegal.

Security Employee Morale

Security personnel who are entrusted with police powers may perceive themselves as being more professional. Although this factor is subjective, security officers who have positive attitudes about their work and employers are more likely to perform better and stay longer with a company. In an industry known for high employee turnover, any corporate action that reduces turnover and improves performance should be considered.

Quality of Staff

When prospective applicants are investigating employment opportunities as a security officer within a private company, they may favor a position that offers the greater level of authority. Further, since increased authority should be synonymous with greater responsibility, the position will, one hopes, pay more.

Relationship with Law Enforcement

If local law enforcement officers do not have to make arrests, conduct investigations, and testify in court for a private company, better relationships may develop between the two. Police officials often complain that their limited resources are burdened by having to handle the crime-related problems of private businesses.

Relations can be further strained when a company decides not to prosecute and instead pursues its own system of justice. Arrests made by police officers that result in dismissals because the company no longer wants to prosecute can cause unnecessary friction. Businesses may be able to operate without police support much of the time, but they will be unlikely to survive a major crime wave, labor dispute, or terrorist attack without police help.

Deterrence to Crime

The reputation of a security department, inside or outside an organization, will affect the level of crime it experiences. If shoplifters know they may be arrested in front of their peers, they may be less inclined to commit the act. If a private company has the reputation of arresting and prosecuting offenders, potential offenders will more likely be deterred.

Conversely, a private company faces a number of potential disadvantages by having a security staff with full police authority. Some of the arguments against private citizens having police powers include the following:

Introduction to the “Supply Chain”

The supply chain … what is it, and how does it affect the retail loss prevention professional? Many in our profession have little or no experience in supply chain security. For many years it has not been a focus of attention. For most retail loss prevention executives, the emphasis has always been on store-line shortage control. The question has always been, “How do we reduce store shrink by implementing physical security controls, procedural controls, and investigative follow-up?” To varying degrees, companies placed some emphasis on distribution center controls, but for the most part these controls paled in comparison to those implemented store-line.

This section will try to bring the retail supply chain to life by showing you how it works, where losses occur, why those losses are important to your company, and last, steps you can take to address those losses and thereby enhance your overall loss prevention program.

Before we can discuss supply chain loss control issues, we must first take a look at the base definition of a supply chain. The International Cargo Security Council defines “supply chain” as follows:

The one thing you must remember is that your supply chain is your company’s lifeline to the products you sell.

As a loss prevention professional, you must remember that addressing the security needs of your supply chain will greatly enhance your overall corporate loss reduction efforts.

Individual companies’ supply chains differ depending on the products they offer for sale. For companies with “private label” merchandise, the supply chain starts at the supplier and manufacturing points. These manufacturing points can be anywhere in the world. A typical supply chain diagram would look like this:

Supplier → Manufacturer → Distribution/Consolidation point → Intermodal Shipping (Marine/Air/Truck/Rail) → Your Distribution Center → Retail Store

Retail companies that exclusively sell third-party goods have a supply chain that is much reduced in scope. For these companies, the control of the goods starts when the merchandise hits the loading docks in their own distribution centers. Their supply chain can be as simple as this:

Intermodal Shipping → Your Distribution Center → Your Retail Stores

The Start of the Supply Chain

The supply chains for companies that produce “private label” or “proprietary products” are more elaborate in that more steps are taken to bring a product to market. The process starts with the design and prototype sample being developed. Once the design is accepted, the product is passed onto the “production” area. The name may vary from company to company, but the function is the same: This department is charged with bringing the product to market. The first step in bringing the product to market is for the production area to source material suppliers. Once they are sourced, factories need to be located that can manufacture the product. Factories are selected based on their production capability, area of specialization, manufacturing cost proposal, and ability to address “social compliance” issues such as pay scale, good work environment, and nonexploitation of children. All companies that utilize overseas manufacturers have some level of “social compliance” regulations and use auditing firms to ensure adherence to those regulations.

Since 9/11, the U.S. government has tightened import controls and added cooperative government/private industry security programs such as Customs Trade Partnership Against Terrorism (C-TPAT). The inception of these types of programs has added an additional security requirement layer on top of the normal “social compliance” regulations standards that overseas factories must maintain. We will talk more about this issue later in this section.

Once a factory is selected and production begins on the “private label” item, the physical supply chain has started and so too has the possibility for losses to occur. When the product is ready for shipping, one of two events will happen, depending on how much product is produced. The ideal situation, from a loss control perspective, is to have enough product manufactured to fill an entire container. This would allow the container to be sealed and locked until the product reaches the United States and (unless it is opened and inspected by Customs) the safety of your own distribution center. If the container is “LTL” (Less than a full load), the container would be brought either to another manufacturer, where it will be opened and more product added; or to a consolidation/distribution point, where the container will be offloaded, temporarily stored, and reloaded with other merchandise to make a full container. Conversely, once an LTL container arrives in the United States, it will again be offloaded and repacked at a third-party consolidation facility for final delivery to your distribution center.

The fewer times merchandise is touched, the less likely it is for loss to occur.

Supply Chain Loss Vulnerabilities

Once the goods leave the point of manufacture, where are the major areas of vulnerability or “choke points” that loss can occur? There are many of them, all of them when the cargo is not in motion. As a general rule, remember this adage “Cargo at Rest is Cargo at Risk.” When merchandise is sitting, whether in a container, truck trailer, or a warehouse, that’s when loss is most likely to occur.

In general, the major supply chain “choke points” of concern for loss prevention professionals are as follows:

Import Flow (vendor to port, port to consolidation center, consolidation center to DC):

Export Flow (DC to Port, Port to Stores)

The Cost of Supply Chain Loss: Insurance and Beyond

The FBI has stated, “The theft of cargo has become so widespread that it constitutes a serious threat to the flow of commerce in the U.S.” These are powerful words; however, we need to dissect them to be able to put them into proper perspective. What is the cost of supply chain theft to the U.S. economy?

Container and Trailer Security

Any supply chain loss control program has to begin with container and trailer security. This is where your cargo spends much of its time while in transit. This is also where your cargo is most vulnerable.

According to statistics from the U.S. Merchant Marine Academy’s Cargo Security School, 60% of all cargo thefts are the result of carton pilferage, 25% from pallet/quantity theft, 10% from hijackings, and 5% from burglary.

Other interesting factoids involving cargo crime highlight why supply chain theft has become such a problem:

The question becomes, “What steps can we take, as retail loss prevention professionals, to prevent and otherwise minimize our losses when our cargo is in route?” The answer is that there any many steps we can take to address this issue. See the following descriptions.

How Break-Ins Occur

Just how do the bad guys do it? How can it be so easy to break into a locked and sealed container or trailer? The answer is simple. As with any other type of crime, professionals study the dynamics of moving cargo, experiment with finding unique ways to defeat the system, and then practice until it becomes a sort of art form.

The professional cargo thief most likely began his career as a professional shoplifter and graduated to cargo crime because it is more lucrative with a lower risk of being caught. Additionally, teams that perpetrate cargo crime may actually still be active in organized retail crime (ORC). It is not uncommon for these professional groups to move their “resources” from one area to another. If a particular group or individual is identified in ORC circles, gang leaders will move that group or individual into the cargo crime sector and vice versa. Although they are polished and adept at the more sophisticated methods of breaking into a container, cargo thieves are no different from other types of criminals in that they always like to go first for “low-hanging fruit.” They will generally opt for an easy score with moderate gains and low risk of detection over the more sophisticated break-in methods. All too often we make it very easy for them to be successful.

Hijackings

Truck hijackings occur everyday in America and around the world. An accurate reporting of hijack statistics within the United States is difficult because statistics on cargo crime have never been kept as a specific UCR code but rather lumped in with all personal property thefts. Additionally, many hijackings go unreported because private companies and cargo haulers do not want this type of negative stigma attached to their companies. Insurance has always been looked upon as the main insulator for the victimized company, but as previously mentioned, that is no longer a given. High-loss deductible thresholds and self-insurance can make many a hijacking a total loss. Where insurance is paid, the company can still be hit with higher premiums.

Seals

Seals … perhaps one of the more boring topics of discussion in the arena of supply chain security. Boring, maybe, but absolutely essential. Understanding the different types of seals and the best application for utilization of each is critical in the development of a well-rounded supply chain security program.

How good are seals at preventing theft from the supply chain? U.S. government tests showed an average defeat time of typically used seals to be 4.3 minutes using tools readily concealed in a pocket or hand. Some were defeated in seconds. This gives cause for concern, but it is important to note that seals are generally not intended to “prevent” theft, but rather to record that an event took place. It is really not a question of whether or not a seal can be defeated, given time and tools, all seals and locks are vulnerable. The real question is “Can it be defeated and tampered with in such a way that it can avoid detection?”

Here, we will discuss some of the major types of seals, the proper application for each type, and how to develop a sound working program for your company.

Distribution Centers

Any review of supply chain security must include a discussion of distribution center security protocols. A company could have extremely tight controls on its supply chain and still have high losses if it ignores its own backyard, the distribution center.

In this section we will examine the distribution center. We will look at some of the many ways losses occur in this environment and the steps we can take to minimize the risk of loss by utilizing physical security controls and auditing protocols.

How Losses Occur

It would take a book dedicated to this subject alone to truly discuss the variety of ways that theft and losses can occur in a distribution center/warehouse environment. Space does not permit such a discussion, so we will look at a few of the more common ways that losses can occur.

As in all sectors of the retail business, internal dishonesty poses a huge challenge for the loss prevention professional. These risks can be even more pronounced than those encountered on a store-line level due to a different set of circumstances. Distribution centers and warehouses are large facilities with many unsecured locations where theft can take place in relative seclusion. Cameras can’t be placed everywhere, and security officer resources are generally limited, which leaves plenty of secluded areas where loss can occur.

One of the biggest differences that separates store-line and distribution center theft is the growing trend by many companies to outsource their warehouse operations. “Outsourcing” is when a company hires a third party to run its day-to-day warehouse operations. The workers are employees of the third-party company, not the retail company. Outsourcing may be beneficial to the company in that often it reduces operating expenses, but it also reduces an important mitigating factor that can help reduce a company’s vulnerability to loss: That factor is company loyalty.

All companies want “quality” personnel to work in their facility. The quality of the workers goes a long way toward determining productivity and how efficiently the warehouse operates. When a company hires its own workers, it controls the quality issue. When the company outsources, it loses that control. When a company decides to outsource, generally the reason is that it wants to reduce expenses. As a normal course of events, the final selection of a service provider comes through a bidding process. All too often, the low bidder is awarded the contract. To be profitable, the third-party provider needs to keep its expenses as low as possible. Because its main expense is in worker salaries, these tend to be lower paying jobs. Even in union environments, the salary structure and benefits of the contract workers are generally well below what the company that contracted for the services would have paid to its own proprietary staff. To keep costs down, the company does not perform any type of background check on employee candidates. Companies could add that as a contractual requirement before awarding a bid to a third-party provider but seldom do because that would drive up the cost of service and reduce the realized operating expense savings. All this helps drive down the common denominator of “worker quality.” When the quality goes down, exposure and risk of loss goes up.

Most outsource companies do not utilize the same hiring practices as the companies that hired them. Screening processes are brief, with an “any warm body will do” mentality. The workforce fluctuates in size depending on the workload, so layoffs are frequent and sudden. Workers know this and act accordingly. The combination of low wages, poor benefits, and uncertain term of employment can add up to trouble for loss prevention personnel. Combine this with the temptation of the merchandise itself and the opportunities for theft afforded by a large distribution center, and you have a formula for real shortage issues.

Understanding how thefts occur means you also need to understand the makeup of your workforce. Just as gangs can “attack” a retail store, they also can attack a distribution center. The difference is the gangs that attack a retail store usually come from the outside, as opposed to the distribution center, where the gangs are part of the actual workforce. It is not unusual for multiple gangs to be working in a single location. The “gangs” that operate in a warehouse, however, differ somewhat from the usual image that the term “gang” normally brings to mind. We are not talking about violent street gangs such as the Bloods and Crips, but rather groupings of individuals who work together in a planned manner to steal merchandise. Often these groups are ethnically or racially bound. These “gangs” know of the existence of the other gangs, but they do not generally operate in a cooperative effort, but rather divide up the distribution center by “turf.” Traditionally, they recognize each other’s turf and will steal merchandise only from their own areas. Each gang will have a leader who is generally a longer term employee who “knows the ropes.” The leader will direct his operatives, collect the stolen items, and arrange compensation for the other gang members.

“Muling” is a term associated with theft of small amounts of merchandise, from the warehouse, on a continual basis over a long period of time. In this method, an individual gang member (the “mule”) would hide one or two items of merchandise on his person every time he physically leaves the facility. Body straps are used around the midriff or upper leg, which is a common area where merchandise can be hidden. Restrooms or hidden corners are the prime areas where merchandise is taken, and just as in a retail store, a “lookout” is almost always utilized. These items are then brought to a central collection area manned by a gang leader. The gang leaders are responsible for disposing of the merchandise, either through fencing operations or operation of their own store. The leaders will compensate the “mules” by the piece. Compensation can take the form of either money or goods.

“Short-ship” is a term denoting a shipment from the warehouse that arrives at a destination location missing pieces. All too often, short-ships are not merely mistakes. More and more retailers are reducing store-line staff, leaving fewer people to do the same amount of work. One of the areas that companies look at when they want to reduce in-store work requirements is in the receiving of goods. Reducing or even eliminating the need to detail receiving has given warehouse gangs the freedom to steal almost at will. On a wholesale level, warehouse gangs have become very adept at knowing which clients do and do not perform detail receiving checks of all incoming goods. Likewise, on an in-house warehouse operation, employees know what the corporate rules are for checking in merchandise. When these checks are reduced or eliminated, warehouse gangs can “short-ship” cartons being prepared for shipping. If an order calls for 12 items, they make pack only 10 or 11. The shortage can go undetected because the paperwork piece count is correct leaving the distribution center, and unless the shortage is noted upon arrival at the destination store, it is the store that will be stuck with the shortage.

In “pallet stuffing” or “carton stuffing” an extra pallet or carton is placed on an outbound trailer. Here, collusion is usually in play. The truck driver, dock supervisor, and possibly security personnel may be working together. The truck pulls away from the warehouse and is followed by another vehicle. The truck diver makes an unauthorized stop, where the “extra merchandise” is then divided up.

Delivery “miscounts” most often occur when the delivering driver has become “friendly” with the dock supervisor who is in charge of accounting for incoming deliveries. Oddly enough, this scenario does not usually involve internal collusion. A delivery driver who frequents specific warehouses can become a “trusted” figure with the dock supervisor. When a rush occurs and the dock becomes a hectic place, this “trusted” figure may “help out” by unloading his own truck. The driver takes advantage of the situation by leaving one or two cartons in the truck. The driver then asks the supervisor to sign the bill of lading. If the supervisor does not double count the cartons, he just bought a shortage. If he does double count and finds the discrepancy, the driver then “double-checks” the truck and conveniently finds the missing cartons. The dock supervisor does not detect any foul play.

Preventing Warehouse Theft

The best way to defeat any the methods previously discussed is to have a plan. As with any preventative plan, the extent of your preventative measures is almost always tied into and controlled by budgetary concerns. This is especially true with physical security control methods. A good plan, however, will be a combination of physical security controls, auditing functions, collusion, and internal theft deterrents. Most of elements require little or no funding. Let’s look at some best practices for each of these areas.

Physical Security Controls

• Use of CCTV: A monitored system utilizing both PTZ and fixed-location technology:

Fixed cameras should be used on those areas that require constant monitoring.

Multiple monitoring stations are needed to maximize efficiency.

Multiplexed or digitally recorded: A 31-day library should be maintained for investigative follow-up.

A video image printer and/or CD burner should be used for event documentation.

An Auto-Tour option on all PTZ locations ensures cameras are always directed at critical areas.

• Use of uniformed security personnel either “contract” or “proprietary.”

• Guard tour controls—both inside and outside the building.

• Use of perimeter fencing.

• Proper exterior yard lighting: 1 to 3 candlepower is generally sufficient.

• Parking controls: Private vehicles should never be allowed to park in or around truck bay door areas.

• Use of yard gates or gate houses.

• Access control: Use of proximity or other card access control system to limit movement liability:

Use of delayed egress/audible crash bars to control fire exits.

Truck driver entry cages to control warehouse access; truck drivers should not be able to walk directly into a warehouse proper.

Barrier lines taped or painted on the loading dock to psychologically limit a driver’s access to the building.

Use of day/screen gates on bay doors for use in warm weather.

Locking of bay doors when not in active use.

Auditing and Inspection Program

• Provide random escorts of containers from entry ports or depots to your warehouse.

• Perform random audits of goods shipped and received:

Have weekly minimum requirements of shipments to be audited.

Use in-house and independent outside auditors.

Document all audits.

• Ensure opening and closing controls for warehouse access; should be a minimum of two people, one a member of security and the other management.

• Set up security inspections to address the following areas:

Key and lock maintenance.

Fire door alarms.

Parking lot/perimeter checks.

Burglar alarms.

CCTV maintenance.

• Maintain cargo container lock/seal program:

Establishment of container/truck locking standards.

Establishment of container seal standards.

Locking of “in transit” trailers/containers.

Use of “king pin” locks on trailers parked in yard.

Logging controls for all incoming and outgoing seals and locks.

Storage and distribution controls for all seals and locks.

• Establish auditing and follow-up controls of all noted discrepancies.

A Post 9/11 World

Like it or not, 9/11 changed the way we will conduct our business for many years to come. Prior to 9/11, security expenditures for securing the supply chain were predicated mainly on financial ROI versus actual cost of losses due to theft. Post 9/11, government regulations and liability concerns were added in as an additional component in determining supply chain security costs. Several available forums enable security professionals to reach out and make connections with their counterparts in the international supply chain community. A global economy and the need for security in the international supply chain creates the need for such forums. Why? Since 9/11, corporate security executives now have

The impact of the 9/11 Commission Report was to create a renewed sense of urgency in the U.S. Congress to adopt many of the Commission’s recommendations:

Over 80 congressional committees have jurisdiction over some aspect of homeland security. This creates funding and turf battles among those committees and among federal agencies. All are trying to do the right thing, but opinions vary. This creates problems for private industry because this segment is never quite certain of what new requirements or regulations may be coming down the pike.

All this poses a real challenge for the retail loss prevention professional. That challenge is how best to balance the cost for loss prevention, security, and safety against the need to conduct day to day business. Most private companies would agree that this is best achieved through voluntary, cooperative efforts between private industry and government rather than mandated regulation. Congress has already authorized several voluntary programs to foster cooperation between private industry and the government. Programs that currently impact U.S. and international cargo security professionals include

The impact of these government initiatives is that importers and transportation carriers are enhancing their security posture and obligating source manufacturers, freight forwarders, and carriers to do likewise. The result has been that many importers have found that the benefits of making the expenditures needed to participate in these programs outweigh the costs because they have enjoyed large reductions in supply chain losses, and at the same time, the government now has thousands of additional soldiers in the war against terrorism.

For retail loss professional executives, all these provide new challenges for the retail community. Many of these challenges come from trying to plan for the unknown:

The United States and other governments recognize these pitfalls and are attempting to reach international security standards that are both reasonable and effective.

The balancing of sometimes-conflicting security requirements of our companies and those of government bodies will always be a challenge. The need to stay involved in supply chain issues is imperative if we are to see the big picture and make informed decisions. The importance of being able to represent our companies’ positions and concerns and making our expertise available without being seen as a threat to other stakeholders cannot be understated if the loss prevention community is to work together to help shape these debates in a way that assures security measures are both appropriate and effective.

We need to be aware of all this if we are to successfully navigate the growing tendency to blend logistics operation, security, cargo theft, loss prevention, and antiterror measures. If we are not careful, we run the risk of misallocating limited resources and ignoring the traditional responsibilities and role of retail loss prevention professionals. Neither serves our companies or our profession well.