Retailers Fight Shoplifting, Fraud With Higher-Tech Tools

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If you’re a retail executive, you know that fraud, theft and similar losses threaten your bottom line. A study conducted at the end of last year by the Centre for Retail Research estimated that shoplifters, vendor fraud and deceitful employees cost U.S. retailers $8.9 billion during the holiday season. 

The good news is that annual losses dropped $3.5 billion from those recorded in 2008. Security professionals say retailers have added more guards and anti-theft technology—measures that were trimmed when the recession hit. “It's a combination of things. We're seeing more money spent on loss prevention. That's been notching up every year,” said Richard Mellor, vice president for Loss Prevention at the Washington-based National Retail Federation.
Security measures, like hiding anti-theft alarms in products and sales data software that uncovers fraud, have helped cut losses. So have inventory logs and video systems, which catch shoplifters and dishonest employees. There’s also better information sharing between retailers and police agencies that can put the finger on suspects before a theft is committed. “Retailers are paying more attention to what shrinkage means to the bottom line,” said Dan Reynolds, former vice president of North American Sales and Customer Service for Checkpoint Systems.

While these crime countermeasures are beginning to pay off, organized crime rings continue to pose a challenge for retailers. A National Retail Security Survey revealed that 96 percent of retailers suffered at the hands of professional thieves in 2011, looting up to $12 billion. Crossing state lines, these professional pilferers will distract employees to steal consumer goods that are easily fenced online. Checkpoint notes that goods targeted most often include trendy clothes, alcohol, hot toys, upper-end perfumes, popular DVDs, watches and fancy chocolates. 


To beat thieves at their own game, stores have designed some pretty sophisticated ways to catch them. One tool used by high-end retailers is the EyeSee mannequin. Developed by Italian mannequin maker Almax, the $5,130 mannequins feature a camera in one eye. While overhead cameras proliferate in most retail stores, EyeSee offers an eye-level-view of potential thieves. Used together with facial recognition software, the mannequins can identify thieves already in police criminal databases. 


Almax Chief Executive Officer Max Catanese says several companies currently use “a few dozen” EyeSee mannequins in three European countries and the US—with several more dozen already on order. In addition to providing added security, data collected by the mannequins has already helped shops adjust window displays, store layouts, and promotions to keep consumers spending. Catanese says that EyeSee mannequins can’t store images, so any retailer with a closed-circuit television license can use them. 

Retail executives faced with excessive shrinkage now have a number of anti-theft tools at their disposal-- everything from simple anti-theft alarms to $5,130 EyeSee mannequins.


Image courtesy of africa/

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