Skinny wallets, sticky fingers: Retailers fight theft

Bogus travelers’ checks. Hidden pockets bulging with Blu-ray discs. Mad dashes out the door with shopping carts full of unpaid merchandise.

Not only have retailers taken a hit from decreased consumer spending, they’re also dealing with losses from increased criminal activity, including shoplifting, employee theft and vendor fraud, as well as employee error.  

Business crime historically picks up during bad economic times, and the trend is playing out nationally and locally.

But the culprits are not necessarily moms and dads trying to put food on the table. Habitual thieves and white collar opportunists appear to be using the troubled economy as an excuse to shoplift and embezzle and are resorting to brazen tactics, experts say.

“We’ve been seeing increases in incidents, but it doesn’t look like people desperate for food. Mostly it’s people stealing stuff to sell — they may steal 20 DVDs of the same title or cart loads of steaks and seafood,” said Lee Lamer, asset protection coordinator for the Wal-Mart store on East Platte Avenue.

Local retailers and law enforcement say they’re fighting back. Along with surveillance cameras and plain-clothes security staff in stores, a local retailer-network alert system and posted photos of shoplifters are helping catch lawbreakers.

The bad guys are out in full force, said about 20 people who attended this month’s Colorado Springs Retail Security Association meeting. Law enforcement officials and security staff from big box, grocery and department stores have been swapping information through the association since it formed in 1998. Participants share photos and descriptions of recent pilferers. They also call, e-mail and fax tips to each other. The intent: identify organized theft rings and be on the lookout for repeat offenders.

There’s  no doubt the technique works, said financial crimes Detective Josh Bliss of the Colorado Springs Police Department.

Although the security association no longer compiles statistics, a study the group conducted from 1998 to 2001 showed a 25 percent decrease in shoplifting citywide, which was attributed to its efforts. 

“This group has a clear and decisive impact,” Bliss said. “Members help identify suspects, which is very effective, and their networking is invaluable.”

Locally, shoplifting reports were up 6 percent last year over 2007 for a total of 2,407, according to the police department. Still the total number is down from 2,775 shoplifting incidents reported in 1999, when the city was smaller, which Bliss attributes to the work of the security association.

Nationally, retail theft losses amounted to $36.5 billion last year, up from $34.8 billion in 2007, according to a National Retail Security survey released in June. Losses averaged 1.52 percent of retail sales in 2008, up from 1.44 percent the previous year. Lamer said local loss percentages tend to parallel national numbers.

Loss prevention employees from local stores told similar stories at the latest security association meeting. Several hundred dollars worth of clothing was lifted from a Kohl’s in June. A thief’s front waist band held $400 worth of video games from a Target. A $747 television was carted out an emergency exit of a Wal-Mart.

More blatant tactics: Thieves are asking to see iPods or jewelry from locked cases, then snatching them from clerks and running out the door, or buying Xbox game consoles, then returning them without the necessary disc, or cutting items off locked peg hooks.

“While the economy plays a role in the amount of shoplifting around the country, these crimes are mostly the case of greed instead of need,” said Joe LaRocca, senior asset protection advisor with the National Retail Federation, a retail trade association.

Other favorite items to steal from local retailers: DVDs, CDs, electronic games, jewelry, perfume, meat, seafood, vitamins, diapers and baby formula, according to security workers.

Technology has made shoplifting more sophisticated and quicker, Bliss said, and methamphetamine use has fueled an increase in organized retail crime.

Nationally, nine out of 10 retailers said their companies were victims of organized retail crime in the past year, according to the National Retail Federation’s Organized Retail Crime survey, also released in June.

Tactics local stores are seeing include thieves making fraudulent returns of items, using credit card numbers stolen from someone else’s account, trying to cash invalid payroll checks and flashing phony cash register receipts as proof of purchase.

“We’re not getting a lot of what we’d call onesies or twosies. We’re dealing with the habitual criminals that grow from shoplifting into ID theft, credit card skimming and resale networks,” Bliss said.

A recent study by Walgreen Drug Stores showed organized shoplifting follows a basic business model, said Detective Ed Bjorkvist. The lower tier of participants steal large quantities of formula or baby food or diapers and sell the merchandise to a second-tier buyer, who sells it wholesale or online in bulk — often back to retailers. Or, they ship the goods to Mexico, where they are sold for four times the original value, he said.
 
Staff reductions at retailers also may be a factor in the uptick.

“A lot of companies have cut back on their asset protection people because we’re not a money maker for the store, but we retain what’s there, and layoffs increase the shrinkage,” said Wal-Mart’s Lamer, who heads the Pikes Peak Security Retail Association.

And shoplifting isn’t confined to large retailers. Will Lachapele, owner of Paul’s Liquors east of downtown, said while shoplifting isn’t normally a big problem at his neighborhood store, he’s had more attempts recently. In 2008, about $18,000 worth of liquor was stolen in Colorado Springs, compared to about $12,000 worth in 2007, according to police. 

Lachapele helped police nab one thief who walked out with a $50 bottle of liquor after he posted the bandit’s photo captured from a store video camera at the front counter. Two days later, the shoplifter’s buddies came into the store, recognized the man and gave Lachapele his information. Lachapele went to the police, who arrested the man.

The thief’s picture remains hanging in the store, as a warning.

“It’s a pretty good deterrent,” Lachapele said. “We do what we can to combat theft because it costs us business owners — no ifs, ands or buts about it. That guy cost me a day’s pay.”

But it’s not just company owners who get stung by thieves. Wal-Mart Stores Inc. has a bonus plan for employees, and “anything that’s stolen comes out of our profits, which affects everyone who works in our stores,” Lamer said.

“We hear people say they’re taking from a big company, so it’s not really stealing. No, you’re taking from the people who work here.”

And if a shoplifter is just trying to put food on the table, Lamer said, the offender will be arrested, but Wal-Mart staff also will supply a list of local agencies that give away free food legitimately.