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Holiday season in Retail

For retailers, the holiday season is the most important time of the year, as this is when most of their revenue is generated. Unfortunately, it also the time of year when theft increases.

A recently published report revealed the downside of holiday shopping, which included increased shrink, significantly impacting a retailers’ ability to see a healthy profit margin during the final quarter.

According to the 2016 retail holiday season global forecast, retailers are expected to experience both their heaviest sales volumes and their weakest performances as it relates to margin rates during Q4, due primarily to increased shrink and theft from both internal (employee theft and fraud) and external (shoplifting, organized retail crime) sources.

The report stated that in North America, the holiday season contributes roughly 34% of a retailers’ annual sales base but also incurred 37% of its annual shrink loss. Overall, shrink during the fourth quarter is about 15% higher than the rest of the year.

“This time of the year there are a variety of different things impacting brick-and-mortar stores. On one side of the fence, there is the traditional mindset that people think about Black Friday, the fourth quarter and the holiday season as being robust and beneficial for retailers when it’s actually somewhat the opposite in many cases,” retail loss prevention analyst and report author Ernie Deyle says.

There are a few things that retailers can do to prevent an increase in shrinkage. It all starts with a holiday plan (play book) that outlines the specific measures that need to be taken. It is important to make security a part of the overall plan. Although security is usually driven by the security department, loss prevention should be the responsibility of all store associates. The plan should be detailed and cover the extra measures that need to be put in place as well as detailed task lists. Most retailers will ask for additional guards or loss prevention officers. They also need to ensure their CCTV systems and other security devices are in working order. It is important to train staff in advance and conduct daily briefings, so staff members and security personnel are aware of their specific roles. Areas with increased risk of theft should be identified and turned into zones with increased customer engagement with staff. The task list can be divided into three categories such as opening, closing and during business hours.

The opening task list should contain elements like:

  • Checking merchandise for proper security (tags)
  • Ensuring the electronic article surveillance (EAS) gates are working for high traffic
  • Validate locked areas (merchandise cabinets) and perimeter openings
  • Validate that all PIN pads/payment devices are secure

During business hours, it is key to recognize suspicious behaviour and increased risk factors, such as:

  • People coming in with empty or large shopping bags
  • People taking merchandise into bathrooms
  • Heavy clothing and unusual attire
  • People with strollers or carts
  • PiIing stacks of merchandise
  • Overly friendly people asking question as a distraction tactic
  • People paying extra attention to the location, checking cameras
  • Moving merchandise from busy areas to more remote places in the store

The closing task list should contain elements like:

  • Conducting a thorough walk of the store
  • Checking fitting rooms, bathrooms and corners of the store
  • Validate locked areas and doors
  • Ensure that all pinpads / payment devices are secure

I surely hope that the holiday season will give the retailers good sales and a healthy margin with no incidents to speak of.

Posted in: Protective Services and Investigations

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