Month: September 2019

EAS customer experience

How electronic article surveillance improves the customer experience

When most retailers consider adopting or upgrading electronic article surveillance (EAS), the catalyst is loss prevention. Quite simply, the security tags, labels and antenna utilised in EAS protect individual products against theft.

But in protecting a store against loss, EAS also helps improve the customer experience in a host of ways. Here’s an insight into how that works.

The true cost of retail loss

It’s common knowledge retail loss costs the industry billions. In the US that estimated figure currently sits at $50.6 billion or 1.38 per cent of sales revenue, according to the latest National Retail Security Survey.

But what’s often less understood and harder to measure are the hidden costs of retail theft. Shoplifting can cost a retailer in terms of staff time, out of stock events, brand reputation, customer safety, and store appeal.

All these factors affect the quality of the customer experience that retailers are working so hard to deliver in an age of competition both in the real world and online.

To break it down, here’s are five ways EAS can improve the customer experience…

Product cost

Shoplifting is often mistakenly considered a victimless crime. Of course, that’s far from the truth. When retailers incur major losses due to theft, that loss has to be countered elsewhere in the provision of goods.

Most often, that loss is at least partially covered in the mark-up of products, meaning ultimately the customer pays a little more per item to outweigh the cost of theft. Back in 2010, it was estimated that shoplifting cost each US shopper $423 per year. Almost 10 years later that price is likely to be significantly higher.

It stands to reason then that security measures like EAS help keep the costs of those products down due to reducing product theft by up to 80 per cent.

Customer service

EAS customer experience

When your staff are busy protecting a store against loss and keeping a watchful eye out for shoplifters, they are being taken from the key role that offers real-world retail a distinct advantage over online stores – face-to-face customer service.

EAS allows store associates to continue catering to the customer without the distraction of remaining hyper-vigilant against shoplifting. While staff engage with the consumer, they can rest assured the EAS system will be monitoring items and alerting them to potential thefts.

Out of stocks

One major area where shoplifting affects most stores is in out-of-stock events. The retailer simply isn’t aware an item isn’t available until a customer cannot find it.

Searching for an item that has been stolen but is still recorded in the store inventory as being in stock wastes both the time and effort of the customer and that of the retailer.

Importantly, it affects the customer’s perception of their experience with a brand, and is one of the key reasons they may choose not to return to that outlet in the future.

Store appeal

A store that is streamlined, well-protected and welcoming is simply more appealing to consumers. As EAS offers a discrete yet highly effective product-based security measure, it contributes to this appeal.

Security tags are compact, highly effective and can be applied in a uniform fashion so they are inobtrusive and do not interfere with the customer’s experience of a product.

Meanwhile for high-volume, low value goods, labels offer security that can be easily incorporated into the packaging of a product and are then quickly deactivated at the point of sale.

Brand reputation

If a store is frequently targeted by shoplifters, the brand image is soon also affected. The outlet becomes known as a place that may pose safety issues for the customer, or where there are likely to be problems finding products.

In this case, EAS is just one of a number of measures a retailer can employ to improve their security. Best of all, it’s subtle, proven and protects items individually in a way few other loss prevention strategies can.

You can learn more about upgrading your security tags and labels to prevent shoplifting here.

Retail Staff EAS

Five things your retail staff need to know about EAS

Although electronic article surveillance might be widely understood by retailers and management, for the staff members and sales associates who use it daily, its use and best practice may not be so well known.

Importantly, staff should be regularly trained in the use of EAS, so they can better utilise and respond to it as a loss prevention tool.

When training new staff or offering a refresher on in-store security, here are five things your staff need to know about EAS…

EAS basics

Electronic article surveillance works on the simple principle that products are affixed with tags or labels which cause an alarm to sound if they pass through the entryway of a store.

These labels and tags are monitored by antenna positioned at the store opening.

In order to get a tagged or labelled item to leave a retail outlet without an alarm sounding, a tag needs to be detached, while a label needs to be deactivated. These detachers and deactivators are commonly located at the Point of Sale

That means some of the regular tasks that staff may have include affixing labels and tags to new products, deactivating labels or removing tags during a sales transaction, and responding to any alarms that the EAS system may sound.

So, here’s a checklist of what they should be educated on to help them use this system effectively.

The system should be checked daily

The EAS antenna that guards the entryway to the store should be checked each day on store opening. This ensures there is power to the system and it lights up correctly to illustrate it’s in use.

Different systems may have different daily requirements, but generally this is a very simple process that clearly indicates the antenna is working correctly.

Deactivators and detachers

Retail Staff EAS

In addition to checking the antenna, staff should also check label deactivators are plugged into a power outlet and working properly.

Meanwhile, tag detachers tend to work using strong magnets, which do not require a power source. However, these should be carefully looked after and even affixed to the Point of Sale to ensure they are not a target for theft.

In the wrong hands, tag detachers allow shoplifters to remove tags from items, so their security and care is paramount.

Position matters for labels and tags

When new stock arrives at an outlet, one of the back of house tasks is to affix security labels and tags to items, and it’s important staff understand that position matters when doing this job.

Tags should be affixed in a position where they do not interfere with the customer experience of a garment or item, yet can be easily removed during a transaction and are also visible enough to act as a deterrent.

In the interests of store appeal and product uniformity, many retailers often have policies for where exactly tags should be positioned, so all products look neat and the same.

When it comes to labels, these should be positioned so as not to obscure product information, and in a place that is near the barcode of a product.

This allows staff to quickly scan a product and deactivate the label in the same manoeuvre at the POS.

Alarms mean something

It’s important that staff understand every EAS alarm that sounds in a retail outlet means something and should be responded to.

If alarms are sounding when an item is not being taken, it may indicate products are positioned too close to the antenna, the detection setting of the EAS is too high, or they are encountering tag pollution.

Tag pollution is when a tag or label from another retailer has not been detached or deactivated properly and is brought into a store, causing an EAS alarm to sound.

Most EAS antenna have lights which indicate a tag is inbound rather than outbound, but staff should be educated on what to look for.

You can learn more about training your staff in EAS here, or alternately contact our staff for further advice on sourcing the right tags and labels for your retail outlet.

Shoplifting - Preventing snatch and grab

Preventing the snatch and grab

Sudden, frightening and increasingly common, snatch and grab shoplifting is becoming an all too familiar headline.

This form of shoplifting differs from traditional theft attempts in that it often involves more than one assailant, who targets a store as a group, ripping products from display before quickly fleeing.

So how can retailers best protect their store, their staff and their stock against the snatch and grab?

The snatch and grab in action

On July 4, MTMJ-TV Milwaukee posted images of a snatch and grab theft in detail, showing a group of 10 offenders entering an apparel store at Pleasant Prairie, ripping clothes off racks and feeling.

It happened in a matter of seconds, but resulted in the theft of $30,000 worth of merchandise.

Apparel retailers aren’t the only stores to be targeted either. More commonly jewellery stores and electronic retailers find themselves subject to sudden “flash mobs” of thieves seeking high value items like the latest mobile phones, tablets and jewels.

Cult of Mac recently reported a spate of thefts targeting Apple stores, noting in the most recent incident five men stole iPhones and iPads valued at $29,000 from an Apple Store in Southern California.

“They quickly began ripping display items out of the display tables, before fleeing the location,” Cult of Mac explained.

So how can retailers seek to prevent or deter this type of theft?

Preventing the snatch and grab

Preventing snatch and grab shoplifting requires a slightly different approach to combatting individual incidents and traditional shoplifting thefts.

In some cases, the snatch and grab is a simple crime of opportunity where items can easily be accessed from the entryway and make an ideal target for thieves.

In other cases, the snatch and grab is more organised, with the mob of shoplifters having cased the store previously and knowing exactly the items they seek.

Either way the following strategies can assist when it comes to deterring the snatch and grab.

Product positioning

Shoplifting - Preventing snatch and grab

Regardless of whether it’s discounted sale items or high-value electronics, products should be positioned out of immediate reach of the doorway.

Ideally, high-value items like mobile phones and jewellery will be situated close to the Point of Sale in a position which thieves have to make an effort to reach, which takes further time and effort to retreat from.

This makes the products harder to access for shoplifters, and therefore less desirable. It gives retailers additional time to alert emergency services and also greater opportunity to catch images of the thieves on CCTV.

Highly secure displays

Newly-released high security displays offer increased security for products like mobile phones and tablets. They offer features like dual alarms, steel cables, and a steel stand which can withstand up to 180kg of force. They also come with the option of permanent lockdown.

Best practice sees the display tables or counters these displays are fitted to bolted to the floor or secured to the wall.

Lockable stock cabinets

For high-value items like mobile phones, tablets and jewellery, lockable cabinets or stock drawers are also an option. These can be fitted with smart locks and keys which track which staff member accesses the cabinet, how often and at what time.

Dummy displays

Some retailers opt for dummy displays which see mock merchandise displayed on the floor of a retail outlet while actual stock is secured out the back in locked stock cabinets.

This theft prevention method needs to be weighed against the risk of shoplifting and the fact legitimate customers cannot readily interact with the products.

Meanwhile, major electronics retailers often use special versions of software on demo devices which render them useless if stolen from a store.

General security

Shoplifting - Preventing snatch and grab

A store which has an apparent emphasis on security is often less likely to be targeted for thefts, including snatch and grabs.

For retailers, that may mean they emphasise security measures like CCTV through signage, or ensure their product security tags and EAS antenna are visible. This indicates to thieves a store is being monitored consistently.

Meanwhile, apparel stores could consider the addition of benefit denial strategies, such as ink dye pins. These can make items less appealing to thieves because the products they take are rendered useless when the tags are illegally removed.

Security guards

Many retailers are complementing their upgraded product security features with store-based loss prevention strategies like employing security guards.

CCTV

In addition to high security displays and security guards, modern, reliable and clear CCTV footage assists police identify the offenders involved.

Staff Education

Staff should be educated about the rise in snatch and grab incidents and provided with clear instructions about what to do. This includes calling police if there is suspicious activity inside or outside a store, such as groups gathering or people casing a store.

In some instances, retailers have also issued personal distress beacons to staff.

You can learn more about the best security tags and labels available or alternatively find out about upgrading your EAS with benefit denial security tag pins and tags here.

Loss prevention

Store design for loss prevention

When it comes to shoplifting and retail loss prevention, good store layout is just as important as the growing array of tools, technology and electronic article surveillance available.

In fact, good store design and advanced theft prevention strategies like EAS often work hand in hand, allowing retailers to fight shoplifting using a multi-pronged approach.

From lighting to display positioning and clothing racks, here’s an insight into the role good design plays in loss prevention.

Clean, clear, uncluttered

A store that is well laid out, clean, clear and uncluttered creates a more welcoming and enticing venue for shoppers while offering staff better vantage points to see what’s happening on the floor.

For retailers, that means keeping in mind the height of their shelving, where they position displays and how they showcase valuable stock.

Where possible stock should be kept organised, neatly folded and clearly visible. Aisles should be free of obstructions and high-value item should be secured using either locked and tethered displays or EAS tagging in an area visible from the POS.

These simple design principles are for the benefit of both the consumer and loss prevention, allowing customers to readily see and find the items that are available, while store associates can easily monitor the stock in their care.

Lighting

Not only does good lighting create a welcoming ambience and mood within a store, it also serves to highlight the appeal of products and assist with theft prevention.

Retailers who have good lighting throughout their store are less prone to theft because there’s fewer dark places for thieves to feel comfortable.

Importantly, good lighting also allows legitimate customers to find items more readily and feel more at ease, in the knowledge they are safe and secure within that environment.

Shelving, racks, and layout

Loss Prevention

The fit out of a store, including its shelving, helps set the tone for an entire brand. It also draws the customer’s attention to the most important items on display.

These days, the options for fit out are endless, allowing retailers to be more and more creative with the look and feel of their brand.

Within shelving and fit out there is also the opportunity to increase security and offer customer appeal.

In many cases, this is where secure displays come into play, allowing retailers to showcase valuable items behind glass or using tethered displays that enable consumers to interact with products.

Layout

Even something as simple as where you position specific products can have a bearing on loss prevention.

For example, sales racks or tables positioned too close to doorways can make items a potential target of snatch and grab theft.

Meanwhile, high value items should be visible to shoppers yet positioned near the POS or where staff can monitor customer interaction.

In addition, high-value items should be displayed in a place where a shoplifter would feel highly visible leaving with that item or must make their way past a number of staff members and security in order to commit a theft.

Theft prevention tools

Working hand in hand with good store layout are invaluable tools like electronic article surveillance and CCTV.

Again, these items should be factored into the store’s design and general appeal.

For example, the antenna that monitor security tags and labels can now be built into the doorway, hidden under the entryway floor or housed overhead, allowing the store entry to remain secure yet feel open and welcoming.

Security tags and labels do not have to bulky or overly conspicuous, but instead come in sizes that are large enough to indicate an item is being monitored but small enough not to interfere with the experience of the product.

Tags and labels can also be positioned neatly in the same spot on each product to create a uniform and streamlined look.

Meanwhile, any tags and labels should be selected to suit the product involved. That means considering what label or tag best reflects the value and intended customer experience of the product and applying this security without overkill.

Similarly, CCTV should be obvious enough to deter thieves, but not so cumbersome and prominent to make legitimate customer feel watched.

A balance in the beauty

It’s often said that retail loss prevention is a balancing act. And in some ways it is. More often, however preventing shoplifting is a combination of good store design, appropriate adoption of technology and constant vigilance and staff education on behalf of the retailer.

Shop our range of security labels and EAS tags here.

Is your loss prevention up to pat for peak retail season

Is your loss prevention up to par for peak retail season?

With just weeks to go until the retail industry enters peak season, now is the perfect time to assess whether your shop security and loss prevention strategies are up to par.

Year in, year our statistics indicate peak season, which extends from Black Friday right through the Christmas, is a prime time for retail theft.

So where should your attention lie?

Security tags

If Electronic Article Surveillance (EAS) is one of your loss prevention strategies (and we would argue it should be) now is the time to consider whether it could benefit from an upgrade in terms of tag strength, tag types, large pinheads, and even benefit denial additions like ink-dye pins.

EAS is renowned as one of the most effective ways of protecting items against theft, but like all areas of loss prevention, it benefits from an assessment now and then.

Super-strength tags are the minimum recommended strength as they require a higher-powered magnet to open them.

Meanwhile, larger pin-heads can help thwart tampering attempts, ink-dye pins add an extra layer of security, and even tag shapes like alligator tags or clamshell tags make it harder for shoplifters to illicitly remove tags from items.

Security labels

When it comes to low-value, high-volume items, these should be protected using security labels. Now is the time to make sure the right label is being used for the right product and that they are applied in a position that is easy to deactivate quickly at the Point of Sale.

Store layout

Is your loss prevention up to par for peak retail season?

Store layout plays a critical role in theft prevention, with research indicating stores which are well-lit, and have a clear line of sight for staff to see all areas of the floor are less prone to theft.

Undertake an audit of your retail outlet, seeking out dark areas or hidden places which make it more likely for shoplifters to attempt a theft.

Meanwhile, options like lockable displays and cabinets can help boost security of frequently targeted high-value items, and the fitting room should also be factored in as an area at risk.

These days there are new tools available to help guard the change room, with options like the ApparelGuard available, which monitor the area and alert staff to potential thefts or tag tampering.

Surveillance

In addition to product-based security like EAS, and good store layout, many retailers also protect their retail outlet at a store-based level using either CCTV and/or loss prevention (LP) personnel.

Now is the time to ensure CCTV is up to scratch in terms of image quality, recording, and vantage points.

It’s also time to consult with your LP personnel on any trends they’ve witnessed or any weak spots they believe the store may have.

Staff training

You staff are one of your biggest assets or weaknesses when it comes to theft prevention, and the difference is in staff selection and training.

If you are bringing in additional staff for peak season, ensure they are thoroughly screened, and references are checked.

All staff should also be comprehensively trained in order to offer good customer service and also to ensure they recognize the signs of shoplifting and suspicious behaviour.

Again, research indicates well-trained staff who consistently meet and greet the customer go a long way to reducing incidents of theft.

A bumper season

This year’s peak season is expected to be a positive one for retailers, with the industry anticipating a revenue increase of 28.7 per cent on 2018.

If that’s the case, it will also be extremely busy, with more traffic through retail outlets than in years gone by.

For retailers this presents a challenge of balancing high traffic and increased customer expectation with loss prevention at a time many are hoping to enjoy a serious revenue reward.

Ultimately, protecting any revenue boost comes down to the loss prevention strategies retailers implement now to ensure peak season isn’t marred by product theft.

You can learn more about our range of security tags including the latest theft prevention features here.

Technology making major inroads in the retail experience

Technology making major inroads into the retail experience

Most shoppers believe technology is improving their retail experience, and it is in the product search and decision-making process that consumers value innovation most.

These are the findings of the latest Consumer View Report from the National Retail Federation, who note while technology is making major inroads into the retail experience, there is still room for improvement in terms of awareness and delivery.

Here’s an insight into what the NRF found.

The robot in the room – Summer 2019 Consumer View Report

In early September, the NRF released their Summer 2019 Consumer View Report. Entitled ‘The Robot in the Room’ the quarterly report takes a deep dive into how shoppers feel about and use the technology currently available in retail.

The report notes more than three in five shoppers believe technology and innovation has improved the retail experience, but this varies across the channels available.

They found:

  • 80 per cent of shoppers felt technology had improved their experience online
  • 66 per cent believed it had improved their experience in-store
  • 63 per cent felt it improved their experience on mobile

Eliminating the guess work

When it comes to where consumers value technology most, the majority felt innovation added real value in product search and selection and could be utilized to take the frustration out of the pre-purchase process.

The report found the following top three priorities:

  • 55 per cent of shoppers wanted to know whether a product was in-store or available, and 52 per cent felt it was very important that brands or retailers have these technologies and innovations.
  • 49 per cent wanted assistance comparing products prices or reviews, and 42 per cent felt these technologies were very important.
  • 47 per cent wanted it to be easier to find a product or location, with 41 per cent viewing this technology as important.

Checkout experience

The technology the shoppers want

When it came to purchasing methods, most consumers were aware of new technologies like self-checkouts, mobile payments, and buy online, pick up in store (BOPIS) and many shoppers have embraced retail solutions that simplify the checkout experience.

Self-checkout – 62 per cent of consumers are aware of the self-checkout, 89 per cent of those who are aware have tried it and 63 per cent were satisfied.

Mobile payment – 59 per cent of consumers are aware of mobile payment. Of those, 57 per cent have tried it and 69 per cent are satisfied.

BOPIS – 56 per cent of consumers are aware of buy online pickup in store. Of those, 71 per cent have tried it and 67 per cent were satisfied with the process.

Beyond the basics

Beyond the basics of product search and selection, consumers are also now more aware of new technologies available like voice assistants, smart fitting rooms, and social shopping.

Although they may be aware, many are yet to experience this technology, but those who have used it report a generally positive response.

Voice assistants – 43 per cent of shoppers are aware of voice assistants. Of those 64 per cent have tried them and are interested in doing so again.

Social shopping – 34 per cent of shoppers are aware of social shopping, with 78 per cent having tried it and interested in using it again.

In-app store navigation – 56 per cent of shoppers have heard of in-app store navigation. Of those, 89 per cent have tried it and would do so again.

Visual search – 27 per cent are aware of virtual search, and of those, 86 per cent have tried it and would do so again.

Virtual reality – 21 per cent of consumers have heard of virtual reality. Of those 82 per cent have tried it and would be interested in using it again.

Augmented reality – On a similar noted, 1 have also heard of augmented reality, while 86 per cent have tried it and are interested in using it again.

Virtual fit – 19 per cent of shoppers have heard of virtual fi. Of those who are aware, 83 per cent have used it and are interested in trying it again.

Smart dressing room – Just 15 per cent of shoppers have heard of smart dressing rooms, and 88 per cent of them have tried it and would do so again.

The final word

Although consumers are now more aware of technology and its role in the retail experience, its value at present lies in simplifying and streamlining the shopping process.

“Roughly half of consumers are very interested in solutions that take the uncertainty out of shopping — whether that’s knowing that an item is in stock or getting accurate information on prices and reviews,” the NRF report noted.

“And ability to address these needs is already shaping consumers’ decisions on the brands and retailers they shop. These more tactical needs currently outweigh the interest in more personalized or engaging experiences. That is not to say that personalization or retail-tainment is not a differentiating factor for shoppers, but retailers first have to deliver on the basics.”

Have you considered adding benefit denial tag

Have you considered adding benefit denial tag?

Retail loss prevention is an ever-evolving playing field where best practice sees retailers revisiting their security strategies regularly and changing them up when required in a bid to combat theft.

When it comes to security tags and electronic article surveillance, there are a host of methods retailers can employ to upgrade their tag security. These include using high-strength tags and utilising tag shapes that are hard for thieves to tamper with.

But one of the often-overlooked options retailers can quickly and affordably employ is the adoption of benefit denial.

What is benefit denial?

Benefit denial is a strategy that deters thieves from taking an item. It is based on the premise that if they do attempt to steal, the security method attached to a product will destroy it and render it useless.

The idea first became popular to combat major crimes like bank robberies, which use ink dye packs that explode and permanently mark the money.

In retail, the most common benefit denial method works in a similar way, using ink dye tags and pins that release permanent ink into a product when tampered with.

This strategy acts as a deterrent to theft because shoplifters understand that should they try to get around it illegally, the item they’re seeking to steal will be significantly damaged or even destroyed.

In other words, the strategy denies a shoplifter any benefit for their efforts.

Used in conjunction with electronic article surveillance, benefit denial offers an additional security measure.

Not only will staff be alerted to a potential theft using the alarm system of EAS, but should thieves try to remove a tag prior to theft, the product will be destroyed.

Ink dye tags

Now celebrating their 35th anniversary, ink dye tags have proved a hugely popular option for retailers looking to combat theft.

They offer a second level of tag security and are also easy to retrofit or combine with EAS.

Common methods of employing ink dye tags see the ink ampoules either built into acousto magnetic (AM) or radio frequency (RF) tags, or alternatively, retailers can purchase pin heads that have the ink dye component within them.

These ink dye pin heads are highly affordable and are designed to lock into commonly available AM and RF tags.

But ink dye tags aren’t the only effective benefit denial strategy available.

Large pin heads and tag components

Another benefit denial strategy that deters thieves from tampering with tags is the use of oversize pin heads.

This method works on the premise that thieves either have to cut the product or rip it in order to pull the pin head through the item they intend to steal.

Again, it means that the product will be significantly damaged and lose its value once the tag is illegally tampered with, thereby deterring thieves from targeting the item in the first place.

The benefits of benefit denial

Benefit denial is an excellent option when it comes to deterring thieves from targeting products. Although it can be used as an alternative to EAS, best practice sees it employed in conjunction with alarmed tags.

When used together, EAS and benefit denial ensure fewer tags are tampered with, staff will be alerted to any incidents of theft, and should a thief try to circumvent EAS by attempting removal of the tag, they will not enjoy any benefits.

You can learn more about the history of the ink dye security tag here, or alternatively order ink dye tags and pins from our extensive range of EAS products.

What's the link? Shoplifting, return fraud and gift cards

What’s the link? Shoplifting, return fraud and gift cards

When the mind turns to shoplifting, most people imagine a light-fingered customer stealing merchandise then selling it on the black market or using it for their personal enjoyment.

But in the wold of retail loss, the truth is the initial theft of an item is sometimes just the beginning of the crime.

Return fraud sees these stolen items taken back to the store and then exchanged for either money or a gift card. And it’s a crime that’s a lot more common than people think.

Return fraud

In 2018, the NRF’s Organized Retail Crime (ORC) Survey offered a fascinating insight into return fraud.

They noted ORC cost retailers $777,877 per $1 billion in sales and criminal rings have multiple ways of stealing from retailers.

However, the most prominent type of return fraud involved stealing merchandise and then returning it for a refund.

The report found:

  • 3 per cent of retailers had experienced returns of shoplifted/ stolen merchandise
  • 6 per cent had encountered employee return fraud and/or collusion with external sources
  • 1 per cent had experienced returns of merchandise purchased on fraudulent or stolen tender
  • 5 per cent had encountered returns made by ORC groups
  • 3 per cent had experienced wardrobing (i.e returns of used, non-defective merchandise)

“In all, survey respondents expect that about 11 per cent of annual sales will be returned and 8.2 per cent of those returns are fraudulent,” the survey authors explained.

Meanwhile, APRISS Retail’s 2018 Consumer Returns in the Retail Industry Report put a dollar amount on the cost, noting retailers incurred an estimated $18.2 billion loss due to fraudulent returns last year.

APRISS also explains the omni-channel environment is further compounding this problem, with more and more consumers opting to buy online and return in-store.

“The increase in buy-online-return-in-store (BORIS) returns is driving new demands—such as offering ‘frictionless’ returns. The ability to offer more flexible and lenient returns, while still mitigating the risk of fraud and abuse, is ever more critical.

Critically, the NRF says 11.2 per cent of all returns will be made without a receipt and that’s where shoplifting and return fraud begin to enter common ground.

Gift cards

Shoplifting, return fraud and gift cards

Retailers have long been wary of returns without receipts, but in the push to ensure a good customer experience, many are often willing to overlook the lack of a small piece of paper.

In recent times that’s seen retailers offering gift cards, rather than cash, but that too has complications.

“Retailers may attempt to reduce fraudulent returns by providing a gift card or store credit rather than a refund, a popular option when a receipt is not present,” the NRF ORC Survey noted.

“But more and more, those gift cards and credits are sold, often online. This method may slow the thief from getting the cash, but the result is ultimately the same: They end up with the dollars from the stolen and returned merchandise.”

Loss Prevention Magazine explained the appeal of exchanging stolen items for gift cards.

“Rather than fencing the merchandise for 30 per cent of its value on the streets or selling the goods on the second-hand market for 60 to 70 per cent of its value, they can return the merchandise to the store, receive a gift card, and sell the gift card for up to 80 per cent of its market value.

“Factoring in the sales tax portion of the return, which can bring an additional 5 to 10 percent depending on the state, the thief can be looking at an 85 to 90 percent return on their ‘investment’ for the stolen merchandise.”

So, what’s a retailer to do?

Curbing the cost of retail return fraud involving stolen merchandise starts with limiting the potential for shoplifting in the first place.

That involves:

  • Monitoring the store using loss prevention professionals and/or CCTV
  • Training staff in customer service and the signs of shoplifting
  • Good store layout, including adequate lighting to reduce hidden or out of sight areas
  • Monitoring potential theft areas like the fitting room

Meanwhile, retailers also need to be clear in their return policy and vigilant when refunding items for gift cards or cash. Importantly staff should also be educated in these policies, and return numbers and instances should be regularly reviewed.