ken Web viewThis report provides extensive research about the extent theft affects U.S. businesses, the root causes of theft, case studies of before and after, solutions for

1WHY WOULD TOP MANAGEMENT NOT SUPPORT LOSS PREVENTION MEASURES?

Why Would Management Not Support Loss Prevention Measures

Management Capstone MGMT659-1603A-01

Dr. Bryan Forsyth

Colorado Technical University

August 8, 2016

Kenneth C Holmes


Abstract

Theft is both internal and external, and has many root causes. The extent to which theft

affects U.S. business is staggering. A lack of corporate and management’s understanding of the

extent and effects of the problem, and the absence of, or poorly enforced loss prevention policies,

training, and punishment are major reasons for the continued growth of theft, and the root causes

for management’s lack of action. There are many solutions for reducing or eliminating theft, and

case studies prove that implementing those solutions, not only minimize theft, but act a deterrent.

Arming employees with loss prevention training and strong customer service skills, makes them

part of the solution, and gives them a voice. Admitting there is a problem with theft is the first

step, and creating an action plan to address theft is the next step.

This report provides extensive research about the extent theft affects U.S. businesses, the

root causes of theft, case studies of before and after, solutions for reducing theft, and personal

experiences from the author. Businesses that embrace loss prevention measures, enjoy the

benefits and rewards of an improved financial position, while businesses that ignore loss

prevention measures, will experience a poor financial position, and potentially go bankrupt. It is

the intention of this report to present the facts about theft, and instill the importance of

addressing the problem, before it is too late.


Outline

Problem Identification, Impacts and Consequences (Week 1) Page 5

Problem Identification Page 5

Working Hypothesis Page 6

Problem Statement Page 6

Impact If Issue Is Not Resolved Page 7

How Research Will Be Conducted Page 7

Problem Impact and Findings from Research (Week 2) Page 9

Research Methodology Page 9

Literature Reviews Page 9

Why Do People Steal? - Five Reasons People Shoplift Page 9

Adler Modemarkte RFID Case Study Page 10

The Injured Shoe Thief Case Study Page 11

Theft Ring Case Study Page 12

Disappearing Inventory Case Study Page 13

Nationwide Retailer Seeks Loss Prevention Help Page 14

Theft in the Workplace Page 15

Theft in the Workplace: Informational Material Page 17

What is Loss Prevention? Page 18

Current State of the Problem Page 18

Evaluating Solution Success Page 19

Data Collection and Research Analysis Methods (Week 3) Page 21

Data Collection Page 21


Identification of Needed Data Page21

How Will Data Be Collected Before and After the Solution Page 21

Analysis of Data page 22

Methods of Research Synthesis Page 22

Synthesizing Results Page 22

Discussion of Findings Page 23

Discussion and Conclusion on Approach (Week 4) Page 27

Discussion of Personal Experiences Page 27

The Guilty Cash Office Counter Page 27

Proving Surveillance Systems Work Page 27

Employee Credit Card Fraud Page 28

Caught Red Handed Page 29

Poor Management Attitude Page 29

Excellent Store Manager VS. Poor Corporate Mentality Page 30

Conclusion of Results Page 31

Recommendations Page 32

How Successful the Solution Will be in Resolving theft Page 33

Compilation of Findings, Conclusions, and Recommendations (Week 5) Page 35

Final Plan Proposal Page 35

Contingencies Page 38

Conclusion Page 40

References Page 42


Why Would Top Management Not Support Loss Prevention Measures?

Problem Identification, Impacts and Consequences (week 1)

Problem Identification. MGMT659 requires the creation of a comprehensive research

strategy, plan, and proposal outline, pertaining to a topic chosen by the student, and approved by

the Professor. The topic must deal with a real life management problem, that will be addressed

through comprehensive research, determine the most appropriate research methodology, and a

research design written in professional APA format, and all completed in phases. The research

topic the author has chosen focuses on Management’s role in loss prevention. The research

question the author wishes to answer is: Why would top management not support loss

prevention measures, when top management sets the tone and foundation for all loss

prevention goals, standards, and procedures?

The author chose this topic because of many past experiences witnessed and dealt with in

his many years working in retail. The author found these experiences troublesome, and in some

cases confusing. The author has worked with many retailers that take loss prevention seriously,

and diligently watch for shoplifters, and prosecute, regardless of the attempted stolen amount,

and has worked for retailers that do not take the necessary steps to observe potential shoplifters,

seek to apprehend the shoplifter, nor prosecute.

The author has had numerous personal experiences with theft including: Has worked with

employees who presented themselves as a respectful, and honest individual, and were arrested

for stealing the next day; Worked with a mother of two that paid her bills by stealing credit card

numbers (credit card fraud) and cash. When she was finally questioned, she admitted to some of

her deeds, but not all; Worked for a nationwide department store chain that did not want to pay

for police security, and hired their own security staff, that did not have the training and authority


of police. Whenever someone was caught stealing, the police would be called, but management

usually did not prosecute, so the police told them to stop calling us if you are not going to

prosecute. The issue of theft only grew from there; Worked with a global high-end specialty shop

that was seeking to control theft, without the expense of a security or camera system, and wanted

staff to control the problem through superior customer service; Just to list a few.

Observing these experiences has driven the author to question why this behavior is

tolerated, and in some cases overlooked. The fact is there are many policies and procedures that

work effectively, that when applied and enforced, will minimize or resolve the issue, with

minimal cost. Additionally, there are professional organizations whose only role is to provide

systems and training that address theft, and help their clients reduce, or minimize theft. These

services are available to all industries including retail, hospitality, production, warehousing,

banking and finance, the insurance sector, and so on. With Theft being such a problem in

virtually every industry, it borders on insanity why some organizations tolerate the problem and

hope it goes away, while many will utilize such services, and reduce or minimize the problem.

Working Hypothesis. The author’s working hypothesis is that management’s absence or

lack of leadership in dealing with theft and loss prevention, is based from a lack of understanding

of the dimension of theft, the overall effects of theft, the psychology behind theft, fear of legal

reprisals, costs associated with securing proper legal counsel, or simple indifference.

Problem Statement. Theft has been a problem for retailers of all types since the dawn of

civilization. In the early days of bazaar’s and peddlers shopping cards, theft was a nuisance, and

required the creation of laws prohibiting theft, and the establishment of punishment, which was

often death by hanging and/or torture (Abloy, N.D.). In modern times, theft has become a major

issue for retailers, and has only grown in magnitude as the industry expands both domestically


and internationally. Theft has expanded from the traditional grab and pocket, to cybercrime, and

in many cases has become increasingly difficult to apprehend the perpetrator. Theft has become

a problem that affects every aspect of a business, and requires technological and legal parameters

to address, control, apprehend and punish. In modern society, far too many retailers do not

address the issue sufficiently, out of fear of litigation, high legal costs, time in court, and

corporate policies minimizing loss prevention procedures and applications, which in many cases

ties the hands of management and loss prevention officers, rendering them powerless. This

document addresses the root causes and motivations behind theft, and its implications on the

retail industry.

Impact If Issue Is Not resolved. Far too many people do not realize the extent to which

theft impacts retailers. The fact is theft has a tremendous impact on retailers including: Costing

the retail industry billions of dollars a year in lost revenue; Translates to higher prices for paying

customers, as the profit from missing product must be regained; Reduces inventory levels,

translating to less product to sell to generate revenue and profit, and non-replacement of missing

product for sale; Reduces the number of sales hours because of lost sales opportunities; Reduces

the number and amount of pay increases for both management and employees; Reduces bonuses

because of lost potential sales; Can lead to the closing of the business, when theft is left

uncontrolled or is not monitored; and establishes the reputation among thieves that the retailer

does nothing about it, and will only encourage further theft.

How Research Will Be Conducted. The author will be using secondary research, using

articles from the internet, written by organizations that specialize in professional research and

documentation, and will be using Google Scholar to obtain case studies about the topic, that have

been performed, written, and well documented by professional services that specialize in


industry theft identification and prevention for all industries. Additional research will be

procured from reputable websites that research the psychology of theft, addressing the

motivations behind theft, and how to address the psychological aspects of theft.


Problem Impact and Findings from Research (Week 2)

Research Methodology

Mixed methods methodology, secondary Quantitative and Qualitative research, and

deductive reasoning will be used for this management capstone project. Quantitative research

will provide numerical and statistical data pertaining to industry theft figures, providing patterns

and numerical proof of the extent of theft, and will reinforce the need for managements proactive

involvement in loss prevention measures. Qualitative research will provide detailed articles

providing the psychological reasons or excuses behind theft, and case studies will provide

detailed situations involving internal and external theft, the outcomes of the case studies, and

resolutions to the problem of theft. Deductive reasoning will provide a top down process of

reasoning, to reach a logical certain conclusion. The case studies on theft prove that managers

that do not take a proactive approach to loss prevention measures, have a negative impact on the

business, both financially and morally, and are part of the problem. The problem identification

is: Why would top management not support loss prevention measures, when top

management sets the tone and foundation for all loss prevention goals, standards, and

procedures. Then the author will identify the current state of the problem, evaluating solution

success, and a conclusion based on the articles and case studies findings.

Literature Reviews

Waltham, C. (2013, June 19). Why Do People Steal?- Five Reasons People Shoplift. Retrieved from AustinPUG.org: www.austinpug.org/why-do-people-steal-5-reasons-why-people-shoplift

Why Do People Steal? - Five Reasons People Shoplift. This article debunks the

premise that people steal only because they want something they cannot afford, and provides five

reasons why people shoplift. The reasons are as follows: Depression and emotional problems. In


this case, people will steal for a special occasion, such as a holidays, birthdays or anniversaries to

try and make themselves feel better and happy. Some people are frustrated or angry, and will

steal to release their frustrations, while others steal because they are insecure or are unable to

deal with their problems; Get an emotional high. Some people get a high from stealing, and not

getting caught. The danger in this case is the person becomes addicted to stealing; Kleptomania.

In this case, the person achieves relief for just stealing something, and is commonly associated

with psychological problems such as mood disorders, obsessive-compulsive disorder, or

personality disorders; Peer pressure. Commonly found in adolescents, people will steal for

initiation or acceptance into a certain circle of people. Avoidance of peer pressure can be

achieved by not associating with people who steal; Poverty or lack of funds. In this case, people

steal because they cannot afford their basic necessities including food, clothing and/or

medication. Lack of funds is a major reason why teenagers steal, as their parents cannot afford

what they want or need (Waltham, 2013).

This article provides specific reasons for why people steal, and concludes that the reasons

for theft can be related to medical conditions, peer pressure, lack of funds for basic necessities,

or the person just wants the item but does not want to pay for it.

Adler Modemarkte Fashion: Case Study. (N.D.). Retrieved from nedap retail: www.nedap-retail.com › Solutions › Stock management

Adler Modemarkte RFID Case Study. Adler Modemarkte AG is Germany’s largest

fashion retailer, with 170 stores in Germany, Austria, Luxembourg and Switzerland. Adler

Modemarkte was looking for a system designed to increase sales, stock level accuracy, enable

the tracking of the flow of goods from shipment to the register, provide accurate product

replenishment, and improved customer service. The solution chosen was Nedap’s fixed RIFD

(Radio Frequency Identification Device), which uses radio waves to identify and track inventory


with an encoded microchip, and is used to track merchandise and prevent theft. The readers are

located at each register, the entrances, and all areas between the stockroom and the sales floor.

The system is easy to update from an RF to RFID system, and used the current hardware for the

RF system. The sales increases, theft reductions, increased profits, and improved customer

service paid for the cost of the system by 2015 (Adler Modemarkte Fashion: Case Study, N.D.).

This case study addresses what happens when management is proactively involved in the

loss prevention process, and concludes that product tracking, theft reduction, and customer

service are all dramatically improved when product tracking systems are implemented, and that

solid decision making will have a positive impact on an organization’s bottom line.

Jarana, T. (2006). Case Study: The Injured Shoe Shopper. Retrieved from SUMMIT LOSS PREVENTION: www.summitlossprevention.com/cases.htm

The Injured Shoe Thief Case Study. In this situation, a national retailer had two loss

prevention officer monitoring a female customer in the shoe department, from the LP office on

CCTV. They observed the woman put on a pair of shoes from a box on a shelf, and put the shoes

she came in wearing in the box, then put the box back on the shelf. The LP officers continued to

watch her as she walked over to the appliance department, and placed an inexpensive kitchen

appliance in her cart, then proceeded to the register to pay for the appliance with a check, but not

pay for the shoes. The LP officers waited till she left the store, and approached the woman as she

was trying to enter her car. She denied stealing a pair of shoes, and attempted to get into her car.

The LP officers then attempted to restrain her, she slipped and fell on the icy ground, and was

unconscious. The paramedics were called, and she was rushed to the hospital in a coma. She

regained consciousness some time later, and was diagnosed with partial permanent brain

damage. She then sued the retailer, and the case was settled for over $2,000,000 (Jarana, 2006).


This case study addresses the ramifications of LP officers not following through with LP

guidelines, they end up in physical altercations, and invite litigation, when all they needed to do

was obtain the customer’s identification information from the check she paid with, record the

license plate number from her vehicle, and pull the video tape. It concludes that had they

followed proper procedure, they would have sufficient information to pursue a criminal

investigation, and avoid a lawsuit.

N.A. (2015). CASE STUDIES: THEFT RING STEALS OVER $200,000 OF INVENTORY. Retrieved from Danbee Investigations: www.danbeeinvestigations.com/case-studies/theft-ring

Theft Ring Case Study. In this situation, a group of shipping dock workers discovered a

gap in the company’s procedures for checking outbound product, which happened to be a 90-

minute time lag between the dock supervisor counting outbound product, and the product being

loaded onto the truck. Using the 90-minute gap, the workers would load extra cases onto the

pallets, and load the product on specific trucks. One of the dock workers would call the truck

driver involved, inform the driver of the extra product on the truck, and the next day the driver

would sell the extra product and divide the proceeds with the dock accomplices. Management

suspected their inventory shortages were suspicious, and hired an undercover Danbee Services

investigator to work on the dock, and observe activities. Over time, the investigator witnessed

numerous events of extra product being added to the pre-counted pallets, and when he asked

what was going on, he was told to forget what he just witnessed. The investigator eventually

became friendly enough with the dock workers, was invited into the ring, and was told which

drivers to overload, and the amount he would be paid. The Danbee surveillance team started

monitoring the dishonest drivers, and the investigator documented deliveries to specific

customers on days where there were no scheduled deliveries. The investigation came to a head,


and the members of the ring were apprehended. The surveillance team eliminated the theft ring,

eliminated the theft problem, and increased profits by more than $200,000 a year (N.A., 2015).

This case study clearly shows how employees can use shipping schedules, company

trucks and outside parties, to steal and sell company product for their own profit. It clearly

concludes and proves that management’s involvement in loss prevention measures will not only

reduce or eliminate theft, but that the such measures will quickly pay for themselves, based on

positive results.

N.A. (2015). CASE STUDIES: Disappearing Inventory. Retrieved from Danbee Investigations: www.danbeeinvestigations.com/case-studies/theft-ring

Disappearing Inventory Case Study. In this situation, a warehouse manager, employed

by his company for 12 years, and entrusted with the distribution center keys and alarm codes,

used his warehouse access to enter the facility after hours and steal pallets of company product.

To cover his tracks and make inventory disappear, he falsely claimed specific inbound shipments

were short product, and exaggerated the quantities of damaged inventory that was supposedly

discarded. Following these methods, he was able to reduce system inventory figures and disguise

his theft for over one year. An anonymous tip was received by the Danbee Hotline, two top

company executives decided to proceed with an investigation, and place an undercover

investigator in the warehouse. During the investigation, the undercover agent witnessed the

warehouse manager falsify computer inventory records, and ease dropped on a phone call falsely

reporting delivery shortages regarding a shipment the investigator knew was not short. The

warehouse was placed on 24-hour surveillance, and shortly after the warehouse manager and his

accomplice were caught on tape entering the warehouse, after hours, loading a rented truck with

large quantities of inventory. The warehouse manager was confronted with the evidence, and

admitted to the theft and grand larceny. As a result, the company received full reimbursement


from the insurance company for their losses (N.A., CASE STUDIES: Disappearing Inventory,

2015).

This case study clearly shows how managers can easily steal from their employer, and

cover their tracks by falsifying records. It also concludes and proves that top management’s

actions to monitor and record the actions of the perpetrator will quickly resolve the problem,

recover their losses, and the cost of surveillance will quickly pay for itself, based on results.

N.A. (2016). Nationwide Retailer Seeks Loss Prevention Help. Retrieved from Orion Systems: orionsystem.com/case-studies/case-study-2

Nationwide Retailer Seeks Loss Prevention Help. In this situation, a U.S. retailer with

200 stores, hired personnel based on interviews only, and did not perform background or credit

checks, out of the fear of finding personnel incapable of selling. The company was experiencing

the disappearance of product, that was ultimately found being sold on online bidding sites, and

service fraud, in which employees were claiming rebates for customers that the customers never

received. The company hired Orion Systems to help them alleviate the problem, and Orion

Systems implemented a four-month pilot program, which utilized Orion pre-employment

assessments in just a few stores. The pilot program resulted in: A 7 % reduction in employee

turnover for pilot program stores, while non-pilot stores saw a 1 % increase in turnover; Orion

stores experienced a 17 % increase in sales over non-pilot stores; and Orion stores experienced a

0.1 % inventory loss, compared to 3.7 % for non-pilot stores. The pilot program saved the

company over $1 million during the pilot program experiment (N.A., Nationwide Retailer Seeks

Loss Prevention Help, 2016).


This case study clearly proves how performing background and credit checks on new and

current hires makes a definitive and profitable difference for the retailer. Had the pilot program

not been applied, the company would have lost over $1 million more.

Bianchi, A. (N.D.). Theft in the Workplace: Why Employees Bite the Hand that Feeds Them. Retrieved from The Human Equation: www.thehumanequation.com/.../2006/01_18_Theft_in_the_Workplace.aspx

Theft in The Workplace. The article states four specific factors behind employee theft

including: Financial pressures facing the employee, brought on by gambling and/or credit card

debt; Opportunity and employee perception, enabled by lack of internal controls, weak

disciplinary policy, etc. In this case, the employer provides no negative ramifications for

stealing; Employee justification of theft, based on their principle that it is justifiable and is not a

criminal act; and lastly, Employee dissatisfaction with their job or employer. In this case,

employees may experience what they feel are unfair working conditions, low pay, preferential

treatment to certain employees, etc. (Bianchi, N.D.).

The article continues with practices an organization can implement to detect and prevent

employee theft including (Bianchi, N.D.):

Establishing high moral and ethical standards at all levels of management (top to bottom),

communicate expected standards at all levels, and establish measures that are based on,

and reinforce the standards.

Implement employee criminal and credit checks, for all employees, and especially those

in positions of trust, including company information and funds.

Ensure company policy includes specifics on theft and fraud including: What constitutes

stealing, and clearly states a no tolerance policy.


Establish an Anonymous Tip Hotline for all employees to report illegal or unethical work

activities.

Implement current or latest technology surveillance and monitoring systems to establish

internal and external loss prevention controls.

Conduct routine and spontaneous internal and external audits

Establish theft awareness and investigation procedures training for senior management,

and provide ethical behavior training for all staff.

Ensure that more than one person is responsible for monitoring and controlling company

finances, to reduce or eliminate the possibility of fraud in recording and processing

financial transactions.

Never use a signature stamp to sign checks, and never sign or approve blank checks

Identify and address disgruntled employees, and use routine credit checks to identify

employees in difficult financial situations.

Establish and maintain a work environment that is consistently positive, treat all

employees fairly, always maintain an open communication policy, and recognize

employees that follow company guidelines and are examples of exemplary employees.

Carry sufficient insurance to cover employee crime, theft and computer fraud, and ensure

management has read the policy and is aware of any policy exclusion.

This article stipulates specific reasons or excuses for why employees steal, and provides a

strong list of measures that should be implemented, to eliminate or minimize employee theft.

N.A. (2016). Theft in the Workplace - Informational Material. Retrieved from USDA: Office of Procurement and Property management: www.dm.usda.gov › Main Page › Security Awareness


Theft in The Workplace: Informational Material. This article states recommendations

for reducing theft in the workplace including (N.A., Theft in the Workplace - Informational

Material, 2016):

Never keep your purse under your desk or in the file cabinet, and never put your wallet

and/or checkbook in jacket pockets, briefcases or desks. Keep coat racks away from

entrances and exits. These are all places thieves will look first. Best suggestion, bring

only what you need to work.

Maintain a list of emergency numbers or call list in the event of an emergency, and

ensure all employees are familiar with emergency procedures.

To inhibit theft while away from the desk or out to lunch, always have your calls

forwarded to an office close by, or have calls sent to voice mail or answering machine.

To protect valuables, always keep cash, credit cards, passport, or anything valuable in a

locked desk or cabinet. Additionally, the names of employees responsible for coffee or

office fund should never be posted.

Always report missing or stolen items to the office or building manager, and if necessary

to security and police department.

Ensure people entering and leaving a building or office have proper identification (ID

badge), not just proper uniforms, and never leave repair personnel unattended.

Properly label all office equipment and furniture as “property of company”

Never leave keys unattended or in an unlocked drawer

Always maintain a backup system for unclassified safe combinations or passwords,

meaning write them on a piece of paper, and keep them in a secured and locked drawer,

file cabinet, safe, or on your computer if necessary.

Never use key rings with identification tags, as if they are lost or missing, it makes it easy

for potential thieves to know what they are for.

Never loan your keys out unless it is for a legitimate reason, and to a trusted person, and

make sure the keys are returned promptly.

Establish a notification system with the security company, building management office,

and police department, to provide quick response to thefts in progress.


N.A. (2016). What is Loss Prevention? Retrieved from LPF: Loss Prevention Foundation: losspreventionfoundation.org/___pdfs\careers\WhatIsLP.pdf

What is Loss Prevention? This article addresses every aspect of loss prevention, but for

simplicity, the area used for this report deals with the Modern Loss Prevention Mission. Modern

Loss Prevention mission is about applying quality loss prevention measures geared toward

preventing losses, and not undercover investigations. This translates to sales associates providing

superior customer service, personalized attention to drive sales, promote customer loyalty, and

drive profits. Additionally, this means providing extra attention to suspicious customer, thus

inhibiting their ability to follow through with the intended theft. Since superior customer service

is the cornerstone of every successful loss prevention program, it makes sense to promote and

ensure superior customer service. The problem lies in monitoring product based on risk versus

reward, meaning using product security devices, security cameras, closed cases, and alarms on

high-end product such as Fine Jewelry, and other expensive products, but leaving less expensive

products, such as costume jewelry or low priced accessories on open shelves for customers to

handle and pocket. For the retailer, the cost to secure less expensive products costs more than the

loss of the product, meaning the retailer is accepting a tradeoff between the cost of security

measures, and the losses sustained from those products (N.A., What is Loss Prevention?, 2016).

This article provides insight as to how the retail industry tends to look at loss prevention,

and how loss prevention measures are applied, based on product types and cost. For many

retailers it is a balance between the risk of losing low cost product and the cost of implementing

security measures to prevent or minimize the loss of low cost product.

The Current State of the Problem


The statistics on theft on U.S. businesses are overwhelming. The statistics include: 50

billion ($50,000,000,000) per year stolen by employees, 7% of revenue is lost to theft or fraud,

and 33% of all business bankruptcies are caused by employee theft; 16.8% steal from $10,000 to

$49,999, 28% steal from $100,000 to $499,999, 9.6% steal from $500,000 to $999,999, and 25%

steal $1,000,000 or more; 59.1% of male employees steal, 40.1% of female employees steal,

34% have a high school diploma, 34% have a Bachelor’s degree, and 11% have a Post-Graduate

degree ; 26.3% of theft is reported by employees, 18.8% are caught by chance, 18.8% is found

by internal audits, 11.8% is found by external audits,15.4% are caught by loss prevention staff,

8.8% are reported by customers, and 6.2% are anonymous tips; 37.1% of theft is committed by

managers, and 1 of every 30 employees are arrested for workplace theft; For inventory

shrinkage, 42.7% is from employee theft, 35.6% from shoplifting, 15.4% from administrative

errors, 3.7% from vendor fraud, and 3.9% is unknown (Hayes, 2015).

These figures are staggering, and only grow each year. The statistics prove that education

and gender do not hinder a person from stealing, and that management is just as likely to steal as

hourly employees. In fact, it is easier for management to steal, because management has access

to the facilities and the computer system, providing an ideal outlet for falsifying information,

including both inventory and company funds. Employees have the potential to steal both small

and large sums of product and/or cash, and at least one-third of businesses go bankrupt because

of theft. Essentially, the problem is much bigger than most people realize, reduces company

revenue and profits, causes customers to pay higher prices, and costs companies their business in

closures.

Evaluating Solution Success.


The solutions to reducing employee theft and litigation will prove successful when

business and company profits are increased and restored to expected figures, when inventory

levels are restored and maintained to expected levels, when product reordering is restored and

maintained at expected levels, when Loss Prevention officers follow correct protocols and avoid

creating situations that invite litigation, and when company policies are enforced and employees

fully understand the ramifications of stealing, along with the penalties for stealing.

It is important that management in companies small and large implement and support loss

prevention measures including: Security monitoring systems, pre-hire employee background and

criminal checks, system access authorization background checks, establish appropriate Loss

Prevention policies and protocols, provide employee education regarding the dimension of theft

and encourage employees to use company theft hotline to report suspicious behavior, encourage

customers to call the company theft hotline to report suspicious behavior, and implement product

device solutions that enable the tracking and flow of merchandise throughout the store.

This is not likely to happen overnight, and will require the apprehension of all culprits to

make the point. However, with continued diligence and continuous monitoring of both internal

and external theft, the problem will be minimized, and the costs associated with theft prevention

measures will more than pay for themselves in the long run.


Data Collection and Research Analysis Methods (Week 3)

Data Collection

Identification of Needed Data. The needed data must address the issue of management’s

role in supporting loss prevention measures. Based on this requirement, data will be in the form

of current industry theft metrics, psychological factors for why people steal, actual events

reported and recorded by companies that experienced theft problems and the results, solutions to

workplace theft, and well-established ramifications for implementing and not implementing loss

prevention measures. The data collected will provide an overview of the extent of the problem of

theft, provide real life successes of implementing loss prevention measures, and pose viable and

well-established solutions to the problem.

Data pertaining to companies that have not implemented loss prevention measures could

not be found. Either there are no case studies pertaining to the subject, or they have joined the

33% of business that have gone bankrupt or closed.

How Data Will Be Collected Before and After the Solution. Before solution data will

be collected from various sources based on the type of data required. For example, Industry theft

statistics from reputable industry websites will provide numerical and statistical industry data,

provide patterns and numerical proof of the extent of theft (annual amount), how much is stolen,

who is stealing, educational background, how it is reported, and metrics of inventory shrinkage

based on category of theft. Case studies will provide detailed before and after effects of loss

prevention measures, and articles will provide detailed data pertaining to the psychology behind

theft, ways to reduce theft between employees, and solutions to detect and prevent employee

theft.


Post-solution data will be collected from reputable websites that provide industry

statistics stipulating industry standards and acceptable levels of theft, and how to maintain

acceptable levels.

Analysis of Data. First, the data will be categorized based on area of concern and

discipline, meaning the data will be sorted according to where it applies. Quantitative industry

statistics pertaining to patterns and numerical proof will be used to define the extent and

breakdown of theft, and Qualitative data pertaining to before and after scenarios, loss prevention

team training, loss prevention solutions, and full explanations about the reasons (excuses) from

both the psychological and employee theft perspective, will be used to address theft from

multiple perspectives. Second, Quantitative industry statistics pertaining to industry standards

and acceptable levels of theft, will provide the metrics for post solution evaluation.

Methods of Research Synthesis

Synthesizing Results. The synthesizing of results will be the responsibility of

management of the company or organization experiencing loss prevention issues. Management

will need to compare pre-solution figures to post- solution figures, and make a determination of

how effective the implemented measures are, do the implemented measures provide satisfactory

results, and do more measures need to be implemented to further reduce theft? Additional

determination will include: Are the implemented measures well received by employees, are

employees actively participating to resolve theft, are employees utilizing the additional tools and

training to execute superior customer service, is the service provided sufficiently addressing theft

from the sales floor perspective, and is the loss prevention team sufficiently following protocol

to eliminate the risk of injury litigation?


The focus will start with short-term goals, and build to achieve consistent and sustainable

theft figures. Once loss prevention goals have been achieved, it is essential that management

continue to focus on maintaining the loss prevention goals. The mission of loss prevention

measures is to create an environment where customer want to shop in your store, and where

employees and customers seek to maintain an environment where everyone enjoys the

experience, and feels safe knowing the business takes the time to address security issues, and

goes out of their way to ensure the safest and most enjoyable experience possible.

Discussion of Findings. Starting with industry statistics on employee theft, the results

state that U.S. business lose $50 billion annually, 7% of revenue is lost to theft or fraud, and 33%

of business bankruptcies are caused by employee theft. Theft is committed by management and

non-management, and results in cash and product amounts from less than $1,000 to over $1

million. Both men and women steal, and education level does not inhibit the practice. Most theft

is reported by employees, and the rest through customers, audits, loss prevention staff,

customers, and anonymous tips. 1 out of every 30 employees are arrested for workplace theft.

Lastly, theft of all types is the largest contributor to inventory shrinkage (Hayes, 2015).

The act of stealing has many root causes and include: Depression and emotional

problems, anger and frustration, and inability to cope. In these cases, people steal to make

themselves happy or to release frustration; Some people steal because they get a rush from not

getting caught, which is addicting; Kleptomaniacs steal to achieve relief from mood, obsessive-

compulsive and/or personality disorders; Adolescents steal because of peer pressure, or because

their parents cannot afford what they want; and some people steal because they cannot afford the

basic necessities such as food, clothing and medication (Waltham, 2013).


Employee theft has several root caused including: Financial pressures based from credit

card and/or gambling debt; Simple opportunity and employee perception stemming from no real

inhibitors or policies in place; Employee personal values that theft is justifiable, and is not a

criminal act; and employee job dissatisfaction based on unfair working conditions, low pay, and

preferential treatment (Bianchi, N.D.).

The numerous case studies involving companies that were facing employee theft and

shrinking inventory, clearly prove in each and every case where loss prevention measures were

implemented including: Security cameras and video recording, and an undercover investigator

placed on the scene, resulted in the employee or employees and their accomplices being caught

on camera committing the act, the employees admitting to the theft, and the employees being

terminated. Jail was not mentioned in the studies. Additionally, the company received full

reimbursement from the insurance company for their losses. While hiring a security consultant

and undercover investigator is usually for extreme circumstance, the cost of hiring such services

may be necessary, and the cost of such services and surveillance equipment is worth the expense,

can save hundreds of thousands annually, and will pay for itself quickly.

The performance of background and credit checks helps to hire employees with solid

employment records and clean backgrounds. Not performing background and credit checks

opens the door to hiring employees who either have criminal backgrounds, or are more inclined

to steal. The results of poor hiring practices are obvious when it results in tremendous inventory

losses and employee terminations, while best hiring practices leads to reduced employee

turnover and minimal inventory loss (N.A., 2016).

The use of product identification tags, such as RFID’s (Radio Frequency Identification

Device) improves stock level and replenishment accuracy, increases sales and profits, reduces


theft, and improves customer service, increasing customer loyalty. Because RFID devices

achieve results by tracking the flow of goods from shipment to register, entrances and exits, and

all stops in between, the investment is worth the cost (Adler Modemarkte Fashion: Case Study,

N.D.).

Loss prevention procedures must be explicitly understood and complied with, and the

loss prevention team must be up to date with procedures and protocols, and avoid physical

altercations at all costs. A physical altercation can cost the business a great deal of money, even

though the person was caught stealing. When proper procedures are followed, the shoplifter is

caught on tape, management obtains the shoplifters identity and address, a solid criminal

investigation is likely, and litigation against the business will be avoided (Jarana, 2006).

Part of the problem of theft stems from the mindset of retailers, meaning they trade-off

the cost of security measures based on the cost of the lost product, and the cost of staffing (risk

vs. reward). Most retailers implement security systems for high priced products only, and place

products of low cost and value at arms-reach of customers. Basically, the modern loss prevention

mission involves applying quality measures geared toward preventing losses, that superior

customer service is the cornerstone of all loss prevention measures, and that retailer are willing

to absorb the loss against the low cost (N.A., What is Loss Prevention?, 2016).

To reduce employee theft, many companies and organizations implement: Expected

moral and ethical standards at all levels of management, which are communicated and

established in policies and measures; Employee background and credit check during the hiring

process, and throughout the employee’s time at the company; Specify in company policy what

constitutes theft and fraud, and clearly establish a no tolerance policy; An Anonymous Tip

Hotline for employees and customers to report suspicious activities; Surveillance and monitoring


systems to establish loss prevention controls; Routine and spontaneous internal and external

audits; Theft awareness and training for senior management, and ethical behavior training for all

staff; Having more than one person responsible for financial reporting and transaction

processing; Never use a signature stamp to sign checks, and never sign a blank check; Identify

and address disgruntled employees, and conduct routine credit check to identify employees in

difficult financial situations; Establish and maintain a work environment that is positive and fair,

maintain an open-door policy, and provide employee recognition; and Carry enough insurance to

cover employee crime, theft and computer fraud, and check the policy for exclusions (Bianchi,

N.D.)

To reduce employee to employee theft, many companies implement: Policies to always

store purses, wallets and important documents in a locked secure place, and suggest only having

on you what you need; Policies to never leave valuables unattended; Maintain a list of

emergency numbers, and issue a security notification with the security company, building

management and/or police; Forward all calls to voicemail while away from your desk; Always

report missing or stolen items to management, security or police; Never loan keys out to people

you do not trust, and have keys returned ASAP; and ensure everyone entering and leaving the

building have appropriate ID tags (N.A., Theft in the Workplace - Informational Material, 2016).


Discussion and Conclusion on Approach (Week 4)

Discussion of Personal Experiences

In addition to Case Studies, and documented factual articles, I have had my own personal

experiences with employee and customer theft. Some of which were surprising, and other of

which were shocking and disappointing. The following experiences provide the broader, and

more personal perspective of theft.

The guilty Cash Office Counter. In my one (1) year at a discount retailer, many years

ago, there was a chronic problem with registers being short. Because of the shortages, many

cashiers were terminated, and the problem continued. After months of cash bag shortages, one of

the two women in the cash office noticed cash bags with mismatched amounts, compared to what

was written on the cash bag slip. Camera surveillance discovered the other cash room counter

randomly taking cash out of bags, and pocketing the money. The woman was confronted with

the evidence, and she admitted to stealing cash, but she had done it for so long that she lost track

of what bags, and the amounts. She was terminated for her actions, but there was no mention of

criminal charges or pending criminal record. Her termination resolved the problem, and cash bag

counts matched the cash bag slip.

This is an excellent example of loss prevention measures successfully identifying, and

eliminating a theft issue, and clear proof of what happens when management and loss prevention

coordinate efforts to discover and eliminate the problem. After her termination, register shortages

were minimized, employee shortage write-ups were reduced, and terminations were minimized.

Proving Surveillance Systems Work. While working for a nationwide retailer for five

(5) years, I had the privilege of meeting the Security Manager. We had a detailed discussion

about the stores record on prosecuting shoplifters, and he told me he assembled a strong and


detailed presentation for management, and that he was pitching for a new camera surveillance

system, that cost $1 million. The new system could actually zoom in on the keyboard of the

register, and provide a clear image of what the cashier was entering. His presentation convinced

management to purchase and install the system. With the current system, the retailers win rate in

court was 10%, and once the new system was in place, and in use, the win rate jumped to 90%.

The system paid for itself in a short time, and proved that using current surveillance technology,

and proper employee security monitoring pays off in a big way.

Employee Credit Card Fraud. While working for a nationwide retailer for three (3)

years, as a Women’s Shoes Sales Associate, I had the dis-privilege of working with another

associate who had a very interesting means of supporting herself. I always wondered how she

paid her bills. I found out from Dee, that this associate went into her purse, took out her debit

card, and paid her phone bill with it. I also found out from my supervisor, that this associate went

into her purse, took out her store credit card, and tried to make a purchase. Luckily my

supervisor had her account firewalled with a passcode, so the purchase would not go through, but

she was disappointed at the idea this associate would do that. A few weeks went by, and one day

I found her in the stock room, on her cell phone, paying her phone bill with a customer’s MIDD

(Merchandise Inventory Distribution and Delivery) order. She was very quick to tell me to “mind

my own business”, and dismiss me. She was also stealing cash from the register bags, as reported

by other associates. Her activities were caught on camera, and personally witnessed by fellow

staff.

I found out that most of the department staff, management and the cash office knew what

she was doing. It turned out the General Manager did not want to act on the evidence because he

felt “when you fire someone, you let part of yourself go”. To execute the process, the Assistant


GM was going to go over his head and call corporate, confront her with the evidence, and

terminate her. The GM finally confronted and fired her. The employee admitted to some of the

acts, but not all, and accepted the termination. Ironically, the GM was terminated shortly after,

because of his poor judgement, and lack of ability to execute his responsibilities. There was

never any mention of litigation or jail time, but customer calls regarding her credit card fraud

continued for months, so it was assumed management would have to pursue legal action.

Caught Red Handed. While working for the same retailer as a Women’s Shoes Sales

Associate, I had an interesting experience returning from dinner break. I was entering the

employee entrance, and waited till two female employees exited. I almost said “have a nice

evening”, until I realized they were in handcuffs, followed by a police officer. I decided to say

nothing. When I returned to my department, the word was already out, the two girls were caught

stealing on camera, and were immediately apprehended. The two girls were terminated, jailed,

and the store pressed charges.

This is an example of what happens when security executes their job properly, and

management follows through with company policy. It makes a clear statement that theft of any

kind will not be tolerated, and places a stigma on the act of theft.

Poor Management Attitude. In a recent job interview, I had the opportunity to discuss

my final project with the interviewer, who worked as the District Loss Prevention Manager for a

nationwide retail conglomerate. There was one particular store where most of the staff was

stealing, he approached the District Manager about the situation and told her “I will never shop

in this store because most of the staff is stealing, and management does nothing about it”. The

DM’s response was “I am aware of the situation, but cannot do anything about it, because I


would have to fire the entire staff, and run the store myself, until a new staff is established, and I

just do not have the time”.

This is an example of a poor management attitude, and pure laziness. In this case,

Corporate, the DM, and Store Management are very aware of the problem, but are just too lazy

to address the issue, and replace the staff. In this case, even the DM should be terminated.

Excellent Store Management VS. Poor Corporate Mentality. While working for

another nationwide retailer, I had the privilege of working with a GM that executed her

responsibilities flawlessly, and promoted employee buy-in for all aspects of their job. The

problem stemmed from corporate’s mentality and fears. There was an incident where the LP

Officer had apprehended and questioned a shoplifter on the sales floor, and was almost fired by

corporate because she did so on the sales floor. The next day, the LP Officer witnessed another

suspicious customer, and out of fear of losing her job, sent the GM to approach the customers,

which she did. The customer was caught on camera stuffing her purse with unpaid merchandise.

The GM approached the customer, invited her into the office, closed the door, and showed her

the video footage. The GM called the Tallahassee PD, but they were in Georgia attending a

training session, so they could not be there for six hours. The GM proceeded to pleasantly extract

a confession, and told the woman “it was her lucky day”. Since the police could not respond for a

few hours, if the woman agreed to return the stolen merchandise, and never come in the store

again, that she could go, which she agreed to. A few days later, I found out that the GM was

almost terminated for her actions. It turns out that corporate is afraid of being sued, and would

rather eat the loss because the cost of the product is smaller than the cost to retain legal-council.

This situation is a perfect example of corporate’s risk vs. reward mentality, that if the cost

of the stolen product is $50, and the cost to retain legal-council to prosecute is more-costly, they


will absorb the loss. What they are not looking at is the bigger picture, that it is not just one case

of theft, it is thousands, and all of those cases add up to millions in lost inventory, and lost sales

and profits, which costs more than retaining legal-council. Additionally, the retailer retains a bad

reputation for being an easy target for shoplifters.

Conclusion of Results

The problem of theft places a tremendous burden on U.S. businesses, and results in lost

inventory, revenue and profits, higher prices for paying customers, employee hours, bonuses and

raises, and can ultimately cause business bankruptcy and/or closure. Employee theft has no

management or non-management barriers, gender or education barriers, and the amounts of

product and cash employees steal are tremendous. Theft has both internal and external sources,

and can be attributed to psychological and emotional problems, a quick rush, kleptomania, peer

pressure, poverty, financial pressure, opportunity, no moral values, and job dissatisfaction.

Statistical data, case studies, articles, and personal experiences create the picture of how big the

problem is, the reasons (excuses) for theft, and the solutions to theft. Companies that embrace

and implement loss prevention measures, have proven track records of regaining revenues and

profits, following through with legal action, minimizing theft, and establishing a no tolerance

policy. Companies that do not embrace loss prevention measures, continue to experience the

growth of theft, continue to lose inventory, revenue and profits, retain a reputation of being an

easy target for theft, and can ultimately end up bankrupt or closed.

This discussion is necessary because it explains the implications of theft, and solidifies

the results of: Establishing a solid and well-defined loss prevention policy, establishing

employee background and credit checks, conducting loss prevention and customer service

employee training, establishing solid security protocols that successfully eliminate injury


litigation, procures successful theft investigations and prosecution, and establishes a no tolerance

policy for theft of any kind. Loss prevention success starts from the top, with management’s full

understanding of the magnitude of theft, the actual cost to their business, and the ramifications of

not embracing solutions. The fact is, if top management does not address the problem, does not

embrace solutions, and accepts that theft is just a part of business, the problem will never be

resolved, the company’s employees and financial health will be the real victims of their lack of

action, and the business and their management will likely find themselves joining the 33% (one-

third) of businesses that go bankrupt or close, and out of work.

Recommendations

For companies and organizations that already have a successful loss prevention plan,

continuously updating and improving the system, as well as continuous monitoring of theft, and

reinforcement of the policy is all that is needed. For companies and organizations that do not

have established loss prevention policies and procedures, resolving theft is a multi-fold process

and includes: Determine the extent of theft in the organization, based on comparison of reported

financial records to industry standards of acceptable figures; Establish Top Management’s

(Corporate’s) buy-in, based on their acknowledgement and understanding of the magnitude of

theft in the organization, and the potential results of addressing the problem; Include lower level

and store level management in the buy-in; Establishing a comprehensive loss prevention policy,

and include the precise definition of theft, and the ramifications for violating the policy; Secure

and retain strong legal-council across the country to represent the organization in theft cases;

Establish a loss prevention team, on both the corporate level and the store level, and ensure they

are fully trained on all loss prevention policies, parameters, and protocols; Establish a strong

relationship with law enforcement agencies, and confirm your commitment to comply and


cooperate; Provide loss prevention and customer service training to all employees, to encourage

buy-in, as this is the first defense in loss prevention; Establish pre-employment background and

credit checks, to ensure the hiring of reputable and moral employees; Establish a Theft Hotline

for employees and customers to report theft or suspicious behavior; Compare pre and post

results, and determine the level of success of Loss Prevention measures; and continuously

improve and enforce the Loss Prevention Policy to meet and exceed loss prevention goals,

provide continuous loss prevention training, and keep up with technological and legal

requirements.

How Successful the Solution Will be in Resolving Theft!

Success of any loss prevention policy and employee background and credit check

program relies on the full support of all management and employees. Management will be

responsible for establishing and enforcing the program and policy, and employees will be

responsible for monitoring sales floor activity, and reporting theft and suspicious behavior to

management and security. When a loss prevention policy has full buy-in and enforcement, the

policy will be very successful. Employees are more than willing to alert security of shoplifter

presence, and report employees and customers who are stealing, results in tremendous reductions

in the rate of internal and external theft, reduces employee turnover, increases revenues and

profits, and establishes the reputation for being a business that does not tolerate theft of any kind,

and prosecutes to the fullest extent of the law.

The opposite is true for business that do not establish and promote loss prevention

policies and employee background and credit check programs, as they end up joining the 33% of

companies that have gone bankrupt or closed their doors. The sad truth is that just because

corporate does not follow through or care about loss prevention, does not mean that management


on the store level agrees with their ideology. Quite often, store management wants to face the

problem head on, but without a solid loss prevention policy and program in place, and

corporate’s backing, their hands are tied, and are often blamed for store losses or closures, when

the real problem stems from corporates lack of understanding or inaction regarding theft. If

corporate had only taken the time to consider the ramification of their inaction, the results would

have been quite different.


Compilation of Findings, Conclusions and Recommendations (Week 5)

Final Plan Proposal

The problem has been identified, research question posed, research has been conducted,

the problem of theft has been addressed and answered, and the solutions have been established.

Now it is time to establish and implement the plan. The goal is to create a workable and

sustainable loss prevention program, that will resolve or minimize theft losses, and create an

environment that fosters positive reinforcement of honest employee behavior, and encourages all

employee participation in reducing theft at all level. The following is the Final Proposed Plan:

The plan can start with research conducted by internal management seeking to resolve

their employer’s theft and profitability issues. The research will likely lead to the hiring

of industry professional services for advice and solutions, and potential promotions for

management’s concern and diligence.

An outside service should be utilized to compare and contrast company financial figures

against industry acceptable figures, and provide a blueprint for how the company is

designed. This will determine the severity of theft in the business, the type of systems the

organization requires, and will help develop a strong and solid loss prevention policy,

measures, and ramifications. The hiring of an outside service will ensure unbiased

evaluation and reporting, and provide suitable recommendations for measures.

Establish Corporate’s full buy-in, based on the comparison of organization vs. industry

figures, acknowledgement of the magnitude of theft, potential results of addressing theft,

and the potential ramifications for not addressing theft, as this will ensure corporate’s full

support to all levels of management and staff.


Establish store level management’s buy-in, based on the same understanding, and assure

them of Corporate’s full support and backing.

Establish a Loss Prevention Policy, which includes: the precise definition of theft, the

ramifications for violating policy, and ensure full compliance with policy parameters.

The policy should be broad enough to eliminate loopholes for savvy employees to escape

the policy’s grip.

Establish and secure the legal services of a nationwide network of attorneys, as this will

provide strong legal-council for the execution of proceedings, successful prosecution of

shoplifters, and establish a central office to compile results. This can be done by securing

legal services such as Nationwide Legal Network, a one stop service for a nationwide

network of attorneys for all business needs, and is based out of North Hollywood,

California (N.A., N.D.).

Establish a strong Loss Prevention Officer and team for the Corporate office, as they will

take the lead in procuring loss prevention success throughout the organization.

Establish Loss Prevention teams at each store (branch), provide proper training and

licensing, and ensure their full understanding and compliance with loss prevention policy,

parameters, and protocols. This step is necessary to secure a team that will abide by all

safety procedures, and will not create dangerous situations that could lead to litigation

against the organization.

Corporate Headquarters, and each store (branch) should establish a strong relationship

with local law enforcement, including police and sheriff office, and FBI for corporate

crime, and provide them the organizations full compliance and cooperation regarding loss

prevention policies, procedures and protocols. This process will also help in securing off


duty police officers to monitor and apprehend shoplifters. It is a common practice for

many retailers to employ off-duty officers, as they have the full training and authority of

the law, and their presence makes for an excellent deterrent.

Employees at Corporate headquarters should receive loss prevention training, as this will

encourage employee-buy-in, and foster an environment that inhibits and minimizes

employee-to-employee and Corporate theft.

Employees at store level should receive loss prevention and customer service training, as

this encourages employee buy-in, ensures their understanding of the loss prevention

policy, the extent of theft and its effects on the business, and the ramifications for

violating the policy. Additionally, it encourages employees to monitor and report theft to

the Loss Prevention team. Since over 26% of theft is reported by employees, employees

and superior customer service are the first defense for loss prevention efforts.

Human Resources at both Corporate Headquarters and each store location must

implement pre-employment background and credit checks. This process ensures the

hiring of personnel with no criminal history, solid moral values, no questionable financial

backgrounds, and who will be loss prevention policy compliant.

Establish a Theft Hotline for employees and customers to call, and report theft or

suspicious behavior. Calls can be anonymous or not. Theft Hotlines have proven to be

highly successful in apprehending shoplifters, and reducing theft.

Establish a reward program for employees who report theft, as this will encourage

employee participation, and foster an environment of honesty and integrity.

Perform evaluations every 6-months after implementation. Compare previous to current

figures, determine the level of success of the program, when established loss prevention


goals are achieved, and implement improvements accordingly. Evaluations will

determine if adjustments are needed, and graphically prove how quickly a well-planned

and established loss prevention policy and program can pay for itself in a short time.

Provide annual training to Loss Prevention teams and all employees, reinforce the policy,

parameters and ramifications, recognize loss prevention team members and employees

who perform exemplary, and continuously embrace and implement current technological

and legal updates.

Carry sufficient liability insurance to cover the loss of stolen product, as this will help

protect the organization from product and profit losses, and help the organization recover

from those losses, as long as proper loss prevention measures and policies are in place.

Contingencies

Since even the best plans will likely run into glitches, contingencies are necessary to

overcome such glitches, and bring the plan to a fruitful conclusion. The plan contingencies

include (N.A., About Us, 2016):

Since budget will likely play a large role in the process, it is important to provide

multiple options for security systems, each of which meets or exceeds current industry

standards, and the needs and potential growth of the organization. Note: Never choose a

system based on price alone, since the chosen system must meet organization criteria to

be acceptable.

Eliminate or minimize the Risk Vs. Reward mindset, and protect high and low price

items from shoplifters. This translates to scheduling additional sales staff, and securing

items in alarmed units, but reduces low price product theft which adds up quickly. Note:

Since the premise of the Loss Prevention Plan is to eliminate or minimize theft of all


types, and losses must be accounted for in every branch, even the theft of low cost items

adds up tremendously, and should not have to be absorbed by the organization.

Consider checkpoint and/or sensormatic anti-theft devices including: RFID’s, hard

security tags, magnetic removers, and lanyards. These devices will not damage product,

eliminate false alarms, and RFID chips will track product throughout the store. The use of

anti-theft devices has a proven track record for minimizing product and profit losses, and

inhibiting shoplifting (N.A., Retail Security Systems – Clothing Tags, 2016).

For the Corporate Headquarters, protect customer and company records, and intellectual

property, with a strong IT infrastructure including: Back-up systems; System of checks

and balances; Firewalls; Three log in attempts then locked out for a set period policy;

Employee smart badges, Key Fobs, and so on. This step will inhibit fraud, theft, identity

theft, hackers, operational errors and mismanagement, which can create a great deal of

bad publicity for an organization.

Consider hiring Security Management and Officers from reputable and licensed schools,

as this will reduce training and certification expenses, provide a nationwide hiring

network for the organization, and will likely provide annual training to maintain

certifications, and keep up with current security measures and legal issues.

Consider hiring off-duty Police Officers as security staff, as they have the full authority

of the law, and their presence makes a great deterrent for shoplifters.

Ensure only Managers and authorized key personnel, have access to customer and

company records, and store entrance and exit key access, as this minimizes loss risk.


Consider taking part in the mall shoplifters alert program, which alerts other retailers of

known shoplifters in the mall, and creates a barrier for inhibiting shoplifting. If your mall

does not have such a program, consider starting one.

Consider a public relations campaign proudly promoting the organization’s security

improvements, and no tolerance for shoplifting policy, and encourage customers to enjoy

a safe shopping experience. This process will also help recruit and hire honest and law

abiding employees who are likely to conform with loss prevention policies, procedures

and protocols.

Conclusion

Research concludes that management’s absence or lack of leadership in dealing with theft

and loss prevention, is based from a lack of understanding of the magnitude of theft, the overall

effects of theft, the psychology behind theft, fear of legal reprisals, costs associated with securing

proper legal counsel, laziness, or simple indifference. Industry statistics prove the magnitude of

theft, and industry articles have stated the reasons behind theft, the results of applying strong loss

prevention policies and measures, and the ramifications for not applying strong loss prevention

policies and measures.

The fact is top management sets the tone and foundation for all loss prevention goals,

standards and procedures. When top management embraces loss prevention solutions, financial

performance, stability, growth and profitability are improved tremendously, and management

becomes part of the solution. When top management does not embrace loss prevention solutions,

financial performance and stability decreases, may ultimately lead to bankruptcy or closing,

management becomes part of the problem, and sets the business up for failure.


The facts and figures speak for themselves, and the results of applying and enforcing a

strong loss prevention policy are astonishing. With theft costing U.S. businesses $50 billion a

year in inventory and cash, 7% in revenue, and 33% of business bankruptcies and closures, it is

disappointing that many companies and organizations have not embraced loss prevention

measures, which will pay for themselves in a short time. The cost for implementing loss

prevention programs must be weighed against the costs for not doing so, and research has proven

that implementing loss prevention measures improves the financial health and stability of any

company or organization, and justifies the cost of implementing loss prevention measures.

The facts are in, and the results are proven and time-tested. Now it is up to Corporate

officials and management to accept responsibility, and eliminate or minimize the losses caused

by theft. The choice is yours, you can do something about it, and dramatically improve the

company’s bottom line, or ignore the problem, and ultimately go out of business. Based on

industry statistics and documentation, the choice is obvious, embrace the solutions.


References

Abloy, A. (N.D.). Theft and punishment - Historical locks. Retrieved from HISTORICAL

LOCKS: www.historicallocks.com/en/site/h/articles/theft-and-punishment

Adler Modemarkte Fashion: Case Study. (N.D.). Retrieved from nedap retail: www.nedap-

retail.com › Solutions › Stock management

Bianchi, A. (N.D.). Theft in the Workplace: Why Employees Bite the Hand that Feeds Them.

Retrieved from The Human Equation:

www.thehumanequation.com/.../2006/01_18_Theft_in_the_Workplace.aspx

Hayes, J. (2015, September 7). Employee Theft Statistics. Retrieved from STATISTIC BRAIN:

www.statisticbrain.com/employee-theft-statistics

Jarana, T. (2006). Case Study: The Injured Shoe Shopper. Retrieved from SUMMIT LOSS

PREVENTION: www.summitlossprevention.com/cases.htm

N.A. (2015). CASE STUDIES: Disappearing Inventory. Retrieved from Danbee Investigations:

www.danbeeinvestigations.com/case-studies/theft-ring

N.A. (2015). CASE STUDIES: THEFT RING STEALS OVER $200,000 OF INVENTORY.

Retrieved from Danbee Investigations:

www.danbeeinvestigations.com/case-studies/theft-ring

N.A. (2016). About Us. Retrieved from Loss Prevention Plan: www.losspreventionplan.com/us

N.A. (2016). Nationwide Retailer Seeks Loss Prevention Help. Retrieved from Orion Systems:

orionsystem.com/case-studies/case-study-2


N.A. (2016, July 27). Retail Security Systems – Clothing Tags. Retrieved from Sensor Tags Inc.:

https://www.sensortags.com

N.A. (2016). Theft in the Workplace - Informational Material. Retrieved from USDA: Office of

Procurement and Property management: www.dm.usda.gov › Main Page › Security

Awareness

N.A. (2016). What is Loss Prevention? Retrieved from LPF: Loss Prevention Foundation:

losspreventionfoundation.org/___pdfs\careers\WhatIsLP.pdf

N.A. (N.D.). Your Ultimate Managed Collection Services Provider. Retrieved from THE

SEVEN: Nationwide Legal Network: nationwidelegalnetwork.com

Waltham, C. (2013, June 19). Why Do People Steal?- Five Reasons People Shoplift. Retrieved

from AustinPUG.org: www.austinpug.org/why-do-people-steal-5-reasons-why-people-

shoplift

Documents

ken Web viewThis report provides extensive research about the extent theft affects U.S. businesses, the root causes of theft, case studies of before and after, solutions for