The latest National Retail Security Survey shows U.S. retailers lost more than $13.2 billion from just employee theft last year and $29 billion overall. Employee theft was up 2%.
For supermarket operators, specifically, the Food Marketing Institute's latest Security and Loss Prevention Issues Survey cites shoplifting, worthless checks and employee theft as problems.
"Shoplifting is still among the most common and costly losses in the supermarket industry. Worthless checks continue to be a loss prevention concern and employee theft also remains a serious problem," states the FMI survey.
According to the latest statistics from FMI, the typical supermarket catches 29 shoplifters a year who take, on average, $33.03 of merchandise. It catches 3.42 employees stealing an average of $528.44 per incident, and accepts, on average, 467 worthless checks for $70.25 each.
However, while theft is on the rise, so are loss prevention apprehensions, thanks to a whole host of new technological advances that are helping supermarket operators police their aisles and front ends.
And, source tagging, or electronic article surveillance (EAS) of products, making it harder to remove merchandise from the store without it being deactivated by a cashier scan. Merchandise that isn't deactivated will set off an alarm system.
Jack Brown, chairman, president and chief executive officer of the 155-store, Colton, Ca.-based Stater Brothers Markets, said the new technology has made it easier to prosecute those he can catch.
Brown said Stater Brothers' use of CCTV, for instance, made it easier to convict those he caught. "Our apprehension rate is up," Brown said. "When you take a video into a court room, there is no discussion. There it is on tape. It's an open-and-shut case."
Brown said that over the course of the past two years, Stater Brothers has systematically incorporated the use of CCTV in almost all of its stores.
At the 1,192-store Food Lion chain based in Salisbury, N.C., EAS came in very handy when it came to tagging one of the most shoplifted categories of food: meat. Food Lion is a division of Delhaize America, Salisbury.
According to published reports, Food Lion is using an EAS system developed by Sensormatic and PaperPak. Using the Universal Product Protection system, anti-theft sensor labels are tucked between the absorbent soaker pads under meat, fish and poultry, invisible to the potential perpetrator, yet able to signal an alarm should the package leave the store before a cashier disarms it.
Meanwhile, the Landover, Md.-based, 173-store Giant Food (a division of Ahold USA, Chantilly, Va.) is using an EAS system developed by Sensormatic, Boca Raton, Fla., too.
In published reports, Nick Barilla, Giant's director of loss prevention, said, "We expect to save big money. Shoplifting is a significant problem. Officials at Giant anticipated slashing shoplifting losses by 30% by using EAS.
"The groundswell of support for source tagging among retailers is tremendous," said Dave Shoemaker, group vice president, strategic marketing, Checkpoint Systems, Thorofare, N.J. Checkpoint and Sensormatic are two of the leading providers of source-tagging technology.
Mark Doyle, vice president of the Fruitland Park, Fla.-based Jack L. Hayes International, a loss prevention consulting group, said EAS as well as exception transaction monitoring of cashiers has greatly improved loss-prevention techniques.
Doyle said the monitoring of a cashier's transactions to spot oddities that may indicate some irregularities is a trend that has been adopted by a number of supermarket operators.
"Its been out for a couple of years, but right now, more and more retailers are getting into it," Doyle said.
By using exception monitoring, supermarket operators can now, from the corporate offices, monitor and spot cashiers who may be creating fraudulent voids and returns and pocketing the money.
Doyle said that exception monitoring, by closely analyzing all of a cashier's transactions, becomes extremely effective when combined with using CCTV to take an even closer look at what an employee is doing.
Moreover, Doyle said in the coming years supermarkets will also be making greater use of digital storage of all images captured via CCTV. He said the new digital systems, in limited use right now, make it possible for supermarket operators to retrieve, from a remote location, any image from any particular date and time very quickly.