Survey shows Canadian retailers are taking necessary actions to combat theft

June 04, 2008
With the growth of retail organized crime in the Canadian marketplace, the types of security measures being employed by retailers are also growing according to a new survey of medium and large retailers.

The survey found that there are many types of criminal activity in retail stores and that the respondents still expect that the most likely source of financial losses in future will come from traditional merchandise theft, both internal and external. The top two identified were merchandise theft from customers (62 per cent) and merchandise theft from employees (33 per cent).

"With a focus on the so-called traditional sources of theft will retailers be prepared to meet the upcoming challenges faced by emerging technology threats? Only 5 per cent indicate that they expect pin-pad tampering to be an issue in the future," says Ian Booler, in the performance and risk practice with PwC in Canada.

Diane J. Brisebois, President and CEO of the Retail Council of Canada comments, "It is clear from the survey results that there is a need for government, law enforcement, the courts and the industry itself to ensure we are working cooperatively to deal with such issues as retail organized crime and all other forms of loss that retailers are subjected to."Currently, respondents to the survey indicate that they are using a wide variety of store security and loss prevention measures to control store operations. On a positive note there is an increasing trend of using technology to help prevent theft - a full 100 per cent of survey respondents use alarm systems and 90 per cent use video surveillance programs.
   
"These options have become a cost effective measure to monitor store activity - not only for criminal activity, but also for monitoring internal theft and employee security," says Booler. "The presence of video surveillance and alarm system measures are complementing procedural elements: greeters and fitting room attendants working to prevent theft are being assisted by the 'eye in the sky'".
   
The survey also shows that there is a correlation between the growing use of video surveillance to the increasing rate at which offenders are being prosecuted. Retailers now have the ability to provide law enforcement agencies with the evidence required to appropriately prosecute offenders. Those caught stealing can expect that Canadian retailers will take action. Eighty-five per cent of respondents dismiss employee offenders with cause, 62 per cent proceed with criminal charges against the employee and 80% pursue criminal charges against their customers.

"It is clear from the survey results that retailers are backing-up their policies with the appropriate actions to show the public and their staff that such activity will not be tolerated," Brisebois says.

Survey respondents indicate that retailers can reduce their risk of losses by using simple internal control measures:

-91 per cent perform pre-employment screening before hiring new staff
-71 per cent rotate employee's duties, where possible, in their stores
-86 per cent avoid having employees work alone in their stores
-100 per cent provide training and training materials to employees on store policies specifically related to theft prevention

"It was interesting to see that 48 per cent of respondents said they require new employees to undergo a police background check as part of the hiring process," says Brisebois, "This is a clear indication of the industry's concerns over risks of internal theft residing within today's retail environment."

Although 100 per cent of respondents indicated they provided training and materials to store staff on theft prevention, 86% said they would be interested in receiving additional training information and materials related to loss prevention.

"Retailers are fortifying their control environment," says Booler. "However, typical control measures such as counting inventory are not being performed as frequently as would be expected for a retail market that is most susceptible to merchandise theft. Criminal diversity describes the incredible challenge facing the mid to large retail segment in Canada. Street gangs, technology based crime, and traditional theft must be prioritized to ensure that losses are minimized and shrink rates remain within the industry norms."

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