Wednesday, September 10, 2008

Stolen goods have hidden consequences — Shoplifting results in higher prices for every customer

By Jenny Neyman
Redoubt Reporter

Even if they aren’t caught, shoplifters pay a price for what they take, and so do their parents, friends, neighbors and everyone else in their community.

That’s because the cost of shoplifting is factored into the price of goods. The more that’s stolen, the more the item will cost down the road.

“When someone shoplifts, in reality what they are doing is stealing from each individual customer,” said Jason Moulton, loss prevention director for Safeway, Seattle division, which includes Alaska. “Yeah, we are the victim today. But we’re a for-profit organization, so what we have to do is take that expense and build it into the cost of goods. So really they’ve victimized their parents, their family and all the customers of that store.”

The Safeway stores in Kenai and Soldotna got a boost in shoplifting prevention two weeks ago when a loss prevention team from Anchorage visited the stores.

“It’s a routine thing. We do it on a regular basis, unannounced and without any fanfare.

You may be able to shoplift one day and get away with it, the next time there will be an undercover person in the store and you are apprehended,” Moulton said.

It may be routine from Safeway’s standpoint, but it creates a dramatic spike in shoplifting calls for local police departments.

From Aug. 20 through Aug. 27, Soldotna police responded to 12 reports of shoplifters in custody at the Soldotna store. By comparison, there were two reports of shoplifters in custody from Aug. 28 through Sept. 4, and none from July 31 to Aug. 19.

Kenai saw a similar spike. From Aug. 1 through Aug. 19, Kenai police reported two calls to Kenai Safeway to pick up shoplifters in custody. From Aug. 20 through 25, 11 people were arrested or issued summonses to court for shoplifting at Kenai Safeway. From Aug. 25 to the end of the month, no calls were reported. Most of the reported thefts were under $20, with a few over $50.

“Shoplifting is a problem. It’s a problem we deal with every single day,” Moulton said.
Safeway isn’t alone. Other retailers face the same issue and deal with it in a similar way, by building the cost of stolen goods into prices. Moulton said that, nationwide, items stolen from retailers for the purpose of resale could exceed $40 billion a year. And that’s just things like tools, shoes, electronics or teeth-whitening strips taken to be fenced through eBay or some other method. That doesn’t even include items stolen for the shoplifter’s use, like cosmetics or candy bars.

All of it factors into what retailers call “shrink” — the difference between a store’s inventory and the amount of goods sold. Shrink for nonperishable items, like canned goods or cleaning products, can result from factors other than shoplifting, including employee theft, bad paperwork or stuff just getting lost. But shrink mostly means shoplifting, Moulton said.

The industry retail standard for a large store with millions of dollars in products is 1 percent to 1.5 percent “shrinkage,” Moulton said. He said that Safeway has one of the lowest rates of shrink in the food industry, but what they do suffer still takes a hit on the business’s bottom line, which in turn takes a bite out of shoppers’ wallets.

“It is not a small number. It’s a significant number,” Moulton said. “When you operate on the margins Safeway operates with, when you have any kind of uptick in shrinkage, that takes an awful lot of sales to make up for that item.”

If retail profit margins are only pennies on the dollar for products sold, it could take up to 20 additional items sold to make up for the one that walks off without a trip through the checkout line, Moulton said. At the end of the year, those costs are calculated and rolled into the prices of merchandise.

“Remember, ultimately, the victim is not Safeway. Ultimately, the victim is the customer. I think if people understand that, I think there’s more of an incentive in reporting it,” he said.

Customers do report shoplifting, Moulton said. Closed-circuit cameras also help, and store employees are trained to watch for shoplifting and deal with the situation. Good customer service goes a long way in preventing shoplifting, with clerks expected to make contact with customers in store aisles and ask if they need assistance.

A simple, “Can I help you find anything?” isn’t always enough to stop brazen thefts. Moulton said an emerging trend, especially in Washington State, is shoplifters filling up entire carts with meat, baby food or other items intended for resale, and just pushing them out the door.

That’s not as common on the central Kenai Peninsula, according to Sgt. Randy Kornfield, with the Kenai Police Department. It takes prior experience to get to the point where you’ve got the guts to try that.

Cost of living increases don’t have much of an effect on shoplifting rates, Moulton and Kornfield said, especially with a variety of social programs aimed at helping provide food to those who can’t afford it.

“When we catch people, I don’t see it as a desperation thing. I see it more as a lifestyle,” Kornfield said.

Mounting bills or climbing gas prices don’t necessarily make a thief out of an otherwise moral person, Kornfield said. It’s more of a learned behavior — caving to peer pressure among teenagers to steal something little, which can build to bigger or more frequent thefts if they aren’t caught or otherwise discouraged.

If they are caught, it can be a costly lesson to learn. Even misdemeanor thefts result in fines and can even include jail time. Stores can pursue civil restitution, as well, and ban a shoplifter from their locations.

Alaska statutes give retailers some power in combating shoplifting. For instance, it’s a crime in Alaska for shoppers to conceal merchandise, even if they don’t walk out of the store with it. That way store personnel can confront potential thieves before they get to the parking lot, where they have a better chance of getting away.

“You folks do have really good laws,” Moulton said. “And I must say your prosecution up there is excellent. We get excellent results. You guys in Alaska take theft seriously.”

At Safeway, a part of taking it seriously is the loss prevention teams, which come from a company that contracts with Safeway to provide the service. Loss prevention officers are undercover and trained to not attract any attention.

Shoplifters attempt to not attract attention, as well. Two weeks ago on the central peninsula showed loss prevention officers are better at it, unless they have a reason to contact you.

“You’ll know when they’re there,” Moulton said.

Editor’s note: Representatives from Kenai and Soldotna Safeway stores did not comment in this story per corporate instruction.

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