LOSS PREVENTION

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BUSINESS LOSS PREVENTION TECHNIQUES By D. J. (Skip) Lamoureaux, President ABD FDEDERAL INVESTIGATION AGENCY, INC. ~ SHRINKAGE

Loss prevention in the retail industry is concerned with the disappearance of merchandise and currency. Most retail establishments take a physical inventory annually, while some do it semiannually. When the count is completed, the difference between the actual inventory on hand and what it should be according to purchase and sales records is called shrinkage.

The causes of shrinkage are recognized as employee theft, shoplifting, and paperwork error. Other reasons for business losses, such as robbery, burglary, and vandalism, are separate problems. Shoplifting and internal theft are actually untold numbers of separate incidents of larceny adding up to billions of dollars of losses which are not listed in crime reports, except for the relatively few cases where arrests are made.

Even though shoplifting is more often publicized than employee theft, security experts are of the opinion that the in-house thief is responsible for at least 50% of the shrinkage.

~ INTERNAL THEFT

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The retail industry attracts many unskilled people who work for minimum wages. Whatever the motivation, a fair percentage of workers succumb to temptation and steal. Many of these employees can be persuaded or prevented from stealing. Positive programs of employee relations built around fair compensation, proper surroundings, and employer-sponsored activities can improve morale and concern for the success of a company. The only way to reach some employees is through a highly visible security program and a rigid company policy of prosecuting any employee caught stealing Prevention of theft requires simple but sophisticated systems for handling merchandise and currency, which not only deter but which leave a trail of documents when any stealing takes place. One important step that industry can take to prevent or reduce internal theft is to avoid hiring the potential thief or problem employee to the outset.

~ PRE-EMPLOYMENT SCREENING

When applying for a new job most people are requested to provide some details about their education and work experience. It is at this state, before an individual is hired, that industry must make the effort to determine whether or not the applicant may pose future problems, including dishonesty. Pre-Employment Investigations are very important and highly recommed.

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~ DISCRIMINATION

The Civil Rights Act of 1964 and other laws aimed at guaranteeing equal employment opportunities for everyone have directly affected the amount of information that an employer may request from a job applicant. Questions about age, health, marital status, arrests, religion, and race cannot be asked. While it is permissible to ask about criminal convictions, it may be discriminatory if the criminal activity in question is totally unrelated to the job environment and if the conviction itself is an absolute bar to employment.

~ CRIMINAL RECORDS

Such background information is usually not available to employers. Most police departments are prohibited by law from disseminating such information outside of official channels. Federal law prohibits any criminal justice agency that receives federal funds from supplying such information. In spite of the foregoing, such data very often does "leak out." Many Private Investigators having access may supply this information with a consent release form.

~ FORMER EMPLOYERS

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It is standard procedure to make inquiry from previous employers regarding the job applicant. Since it is rare to get other than positive responses, the reliability of such information is to be suspected and weighed as a factor with other sources.

~ BACKGROUND CHECKS

A background check may be done in-house or through an outside agency. However, since the job applicant is not required to supply very much personal information these days, it may be necessary to seek other sources. There are extensive accumulations of private information about individuals who have credit cards, bank accounts, hospital records, former employment, or paid taxes. Obtaining such data may present problems with accuracy and invasions of privacy. Many firms consider it foolish and useless to pursue these sources, relying instead on the frankness of personal references supplied by the candidate, which is not a very good way to run any business.

~ CREDIT BUREAUS

Financial information about any individual is ordinarily not supposed to be disseminated except in connection with credit applications. Since the credit standing of anyone is a good indicator of stability and other traits, there is no doubt that such information is often sought as part of the screening

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process. In our metropolitan areas, the major retailers have for many years participated in mutual protective associations where they maintain central records of their shoplifting and dishonest employee cases. These files are used by the member stores as part of the screening of new employees, as well as a background source when deciding the course to pursue with an apprehended shoplifter. Since these files fall within the jurisdiction of the Fair Credit Reporting Act, they must be continuously purged of any data that is over 7 years old.

~ POLYGRAPHS

Retailing is one industry that uses the polygraph to a significant extent both for screening applicants and investigating suspected crimes. The continued use of the polygraph in industry has come under attack in the U.S. Congress and state legislative bodies during recent years. Today, some 15 states either limit or entirely restrict such testing. Conversely there are 19 states which officially recognize the polygraph as a necessary tool for commercial purposes, and they have enacted licensing and regulatory laws.

Herewith listed are some of the arguments that have been advanced by both sides in the controversy over the polygraph:

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1. The value of the polygraph a.Reasonalbe to administer b.Fast results c.Licensing generates confidence in examiners and in credibility d.Dependable findings in most instances

2. Obstacles to use of polygraphs a. Claims that it is self-incriminating b. Violates right of privacy c. Unions oppose and advise members not to sumbit to testing

~ OTHER LIE-DETECTION DEVICES AND TESTS

In recent years voice-stress measuring devices have been used with success in that they have shown strong correlation with the polygraph in their results. Opponents of lie-detection devices have been active in opposing the use of such instruments on the grounds that they are particularly incriminating, since they can test for stress in the voice without the subject being aware of it. This stress is the result of physiological changes in the voice. The results are unlike voice prints, which are used for other purposes. There are also a number of paper-and-pencil tests available which are designed to predict or measure trustworthiness and stability. The continued increase in the rate of employee dishonesty has created a vast market for any form of test that can offer reliability in spotting poor-risk

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applicants for jobs, But remember some states restrict testing.

~ PREVENTION OF MERCHANDISE THEFT

The extent of employee theft can only be approximated since inventory shrinkage reflects the losses from all causes. There are so many ways that merchandise can be stolen by employees that the imagination is the limit. The most successful way to combat such theft is to prevent or discourage it. A concerned company must have thorough systems of control and accountability over merchandise from the moment it is received through the various stages of preparing it for sale, displaying it to shoppers, and finally handing it over to delivering it to the purchaser. Rigid adherence to these controls requires dedication by executives, supervision by middle management, interest and concern by staff employees, and some security presence as a form of insurance. Measures that should be taken to prevent some of the common means that employees use to steal merchandise are mentioned later. Some of these measurers require the employment of security personnel, and oftentimes their use results in direct observation of attempts at theft.

~ EMPLOYEES' ENTRANCE

Wherever possible, employees should be required to use a

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designated entrance when coming to or leaving work. In large establishments this is usually the case. Locker, cafeteria, and lounge facilities should be located in close proximity to the entrance. The time-clock area should be set up between these facilities and the store proper. A security person should be posted here. Personal parcels and overcoats, and so on, should not be carried into the selling or stock areas. Anything that is carried through the time-clock area should be subject to inspection. Female employees may be supplied with a clear plastic purse for personal articles they wish to have with them at work. Employees should be encouraged to keep small valuables and money on their person. The right to frisk and even search may be reserved by a company under certain conditions. The employment application should so state, the requirement should be publicized and fully explained, and this practice must be enforced in a nondiscriminatory manner. The rule should also apply to repair workers, contractors, salespersons, and others who enter the store through this area.

~ PORTERS

Maintenance people and porters who must work within the store during non business hours should be accompanied by security people. Plainclothes detectives should occasionally be assigned to conduct observations of such work.

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~ GARBAGE

A favorite method of theft is to hide merchandise among the refuse before it is removed from the store. This material must be carefully inspected before it is removed.

~ STOCKROOMS

Employees can find remote corners to idle time away or to hide stolen merchandise on their persons. Very often they will discard their own articles of clothing and wear the pilfered items in their place. Once the price tickets have been removed, unless there is a direct observation, proof of theft is difficult to establish. Whenever possible the stockrooms should be kept locked as a security precaution and as a means of keeping employees on the selling floor to improve customer service. Employees should request identification of any persons entering stock areas who are not readily recognized.

~ KEYS AND LOCKS

All doors should be equipped with strong tamper-resistant locks. Where there are many doors within a structure a master key system with changeable cores is recommended. Access to various areas can be provided on an individual basis according to job require-

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ments. Employees should be cautioned to safeguard their keys. In the event of a lost key it may be necessary to change some cores. This is relatively inexpensive when compared the changing locks or cylinders. All keys should be collected and accounted for at the end of the working day, except for those which are used to close and open the premises. There are many keyless access control systems available today which offer computer-related features and technology.

~ STASHING MERCHANDISE

Boxes, packages, and bundles of merchandise may be placed in various places to be later taken away by the employee or a friend. Such packages may be found in secure places on the selling floor. If refuse is not thoroughly checked, the garbage containers may become frequently used for such thefts. When such caches are discovered, the recommended procedure is to establish surveillance over the suspected packages.

~ UNAUTHORIZED MARKDOWNS

A favorite method of "theft" that most employees regard as practically guiltless is to purchase articles at self-determined discounts. Marking down the price of merchandise at the proper time is an important factor in successful retailing. When markdowns are taken, various records must be adjusted to reflect

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the lower value in the inventory records lest a fictitious shortage be created. Those employees who desire an item at the height of the season, and certainly before discounts are in order, create their own price changes in one way or another. One way to discourage such activity is to frequently inspect goods that are held or laid away for employees. Alert sales people or cashiers may spot such price changes, but it may not be practical to expect them to deny the markdown to coworkers.

~ RECEIVING AND SHIPPING

Platform and shipping employees can falsify the various receiving and delivery documents. Sometimes this is done in conspiracy with truck drivers. Incoming shipments should be physically counted and verified against the accompanying documents. Receipts given to delivery people should indicate any shortages found. Shipments should be verified again for completeness when they are unpacked and processed for the selling department. Valuable or easily concealable items should be transferred in security bins or racks. Test counts can be done randomly as a security measure. The documents which match the merchandise must be checked for detail, particularly as to retail price. Incorrect ticketing will create shortage whether it is mistakenly or deliberately done.

~ WAREHOUSE

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Large companies may have one or more warehouses where incoming merchandise is received for storage and transshipment to retail outlets. Sometimes the ticketing operations are done in such warehouses. Theoretically, a warehouse should be easier to control than a store from a security viewpoint, since the environment is closed to the public. Truck drivers should not be permitted within the warehouse. Separate facilities should be maintained for them outside the perimeter, where feasible. Receiving platforms and shipping platforms should be physically separated. Cargo documents and purchase orders should be matched, so that proper bookkeeping is ensured. Cargo areas of trucks should be locked and sealed when transporting merchandise. Drivers should not have access to the goods. It is a good idea to inspect the trucks from time to time to ensure that they are sound. Within the warehouse there should be separate storage facilities for merchandise which is most often or easily stolen. Such areas may be specially safeguarded with locks, alarms, or even closed circuit television. If possible, management should reserve the right to search packages and persons. Typical warehouse environments are conducive to such activities as organized gambling or narcotics selling. These practices can easily lead to necessity for theft. If the pushers and bookies can be singled out, efforts should be made to discharge them. This type of problem is never permanently solved. If management does not stay alert, it will shortly return.

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~ THEFT OF CASH

The theft of cash also presents a major problem to the retailer. The case thieves are ordinarily those persons whose jobs require them to handle money.

~ HOW CASHIERS STEAL

Without a program of prevention, there are numerous opportunities for cashier theft, among them the following;

1. Helping self to cash from common drawer register

2. Failing to give receipt to customer and voiding the sale after customer leaves.

3. Avoiding ringing the sale; pocketing the cash

4. Under-ringing the sale; pocketing the difference

5. Failing to close register drawer after each sale

6. Imprinting more than one charge on a credit card transaction; exchanging surplus charge slip for cash

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7. Allowing accomplice to remove cash; reporting the theft later

8. Raising the amount of a check taken from a purchaser; pocketing the difference

9. Accepting bad checks from accomplice

10. Selling to friends at discount

~ INVESTIGATION OF CASH THEFT

Proper and adequate investigation is hampered by frequent employee turnover in retailing. Very often, by the time a particular pattern of shortage is detected, the guilty individual is gone. Some investigative procedures which may be used according to modus operandi follow:

1. If shortages exist in common drawer registers, switch cashiers daily and keep "over and short" records to track individual performance.

2. Frequent voids, no sales, or reports of till tapping should initiate surveillance of suspect at work. Results may be

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obtained by polygraph examination.

3. Spot checks of cashier's funds during working day

4. Integrity shopping

~ INTEGRITY SHOPPING

The integrity of cashiers can be tested by means of "honesty shopping." These tests are conducted by specially trained people who pose as customers. Shoppers may be in-house or contracted from an outside service. Shoppers operate in different ways according to the type of registers in use and the way a store may conduct cashiering operations. One method is to shop as many cashiers as possible with the expectation that dishonesty will be detected. Another approach is to select as targets principally those cashiers who may be suspected for one reason or another. For example, many stores maintain ongoing records relating to individual cashier performance. Those cashiers who are consistently over in cash may be creating the surplus so it can be pocketed. Additionally, shoppers may be given leads by supervisors or other store personnel.

~ SHOPPING TEST PROCEDURES

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The basic test in any integrity shipping operation is the "even money buy." All other tests are built around this one. The shopper selects an item and pays for it with the exact amount plus the tax. The idea is to afford the employee who takes the cash an opportunity to pocket it. Therefore the shopper must be in a rush and have no time to wait for a receipt or normal wrapping. In stores where the cashier function is separate from the sales function, an "even Buy" is a bit more difficult to accomplish. An element of successful shopping is the ability to later identify the documentation of the "buys" on the register tapes or other sales records. This is accomplished in several ways. The sale previous to the "buy" may be observed by another shopper. Sometimes and "identification buy" is made after the test buy, but only if the cashier has done something irregular or suspicious.

The "uneven buy" requires that the cashier make change. This buy is made by shopper number two whose principal function is to observe how the money from the "even buy" is handled. The "even buy" may be part of a "double buy," wherein the shopper, on being handed the change from an "uneven buy," suddenly decides to make an additional purchase. The shopper suggest putting the item in the same bag, hands over even money, and leaves. There can be many variations of these buys. In an "exchange buy" the shopper hesitates in selecting between two

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items. Finally, the cheaper one is chosen and paid for, but at the transaction is completed the shopper changes to the expensive one, pays the difference and leaves. Shoppers should mark their "buy" money or record the serial numbers in advance so that proper identification can be made of the evidence later on.

~ MONEY ROOMS

A special area for handling and storing cash may be necessary in large stores. Cashiers are usually supplied with working funds which are turned back at the end of a shift along with money received from purchases. The constant counting, disbursing, and receipt of cash often creates shortages that are temporary or permanent. While error in these operations may be common, the theft of money by the employees is not rare. Money rooms should be well constructed and burglar-resistant, if not burglarproof. Alarms should protect the perimeter, the inside area, and the safes. Holdup buttons should be strategically situated. Routine operations should require at least two employees in the room. Premployment screening should be particularly thorough for such employees.

~ INVESTIGATION OF MONEY ROOM SHORTAGES

Following are some procedures for solving shortages originating

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in the money room.

1. Thoroughly audit the entire room

2. Create deliberate error or shortage to test for reaction

3. Compare individual working schedules against times when shortages occur

4. Determine life-styles of employees

5. Since these shortages may be substantial, do not overlook possibility of recovering losses from insurance company.

~ REFUNDING

Most retail stores have a fairly liberal policy of allowing merchandise to be returned and of refunding the purchase price by either cash or check. In some stores the refunding is done through the selling department, where the merchandise, the price ticket, and the sales receipt are examined and authenticated. An authorization for the refund is issued at that point and given to the customer, who presents it at a service desk where the approval is issued and payment made. If price tickets or

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receipts are not presented with the refund request in such centralized operations, the customer is usually directed to the selling department for verification of correct price. There must be at least two employees directly involved in any refund, one for examination of merchandise and approval and a second to make the payout. Procedures must be established to constantly monitor payouts against related documents and merchandise. Deviations from these systems may be indicators of dishonest employees. Price tickets should be found properly attached to merchandise according to company practices. Data on these tickets should match the merchandise being returned. Many people switch to higher price tickets when seeking refunds. Employees, in particular, can do this in comparative safety, since they usually know what sort of information will be accepted as legitimate for certain merchandise. It is advisable to maintain records of refund activity for each employee for possible detection of abuses of the system. Computers can provide such facts to auditors and security departments at periodic intervals.

There is an ongoing problem with safeguarding small items of high value from employee pilferage between point of refund and return to selling departments. Control records must be maintained for such items and special locked storage facilities provided. Supervisors must make daily inspections of records and facilities and see to the secure in-store transfer of the items. Since the refund

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operations are particularly vulnerable to employee dishonesty, particular care should be taken in personnel selection. Temporary vacancies due to illness or vacation should not be haphazardly filled. Proper and adequate training of all employees involved in the refund procedure should be rigid company policy.

~ DETAINING SUSPECTED EMPLOYEES

It is necessary to adhere strictly to legal requirements when detaining an employee suspected of theft. Hiding money or merchandise within the store or on the person is reasonable evidence of intent to steal. Very often, however, the suspect may offer some farfetched excuse for so doing, and the prosecutor or the court may be of the opinion that a reasonable doubt exists. The safest course of action is to wait until an attempt is made to remove the property from the premises. The arresting employee should be an eyewitness to the actual commission of the crime. A rigid policy of prosecuting all employees caught stealing usually has a deterrent effect on others. Once an employee has been detained and accused of theft, the situation should be construed as an arrest. If there is no intention to prosecute, the investigation should be conducted without delay in an efficient manner. The investigation should terminate with a signed confession and a release against the company and its employees. The suspect may be frisked or searched in order to recover the stolen property.

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If the complaining employee has done the proper job of witnessing the theft, the recovery of the evidence should not pose a problem. If the detained employee is to be prosecuted, the police should be notified at once and the investigation conducted and completed without delay. In some jurisdictions the arrest process is delegated to store security employees who deliver the necessary paperwork to the police. Most states have passed legislation to protect the retailer in the event of false arrest claims arising out of detentions to determine the ownership of merchandise, provided that there was reasonable cause to act and that the investigation was conducted in a reasonable manner.

~ CASHIERS

Cash shortages, failure to ring up sales, and failure to give receipts are not proof of theft. Prosecution is not recommended unless there is a direct observation of stealing and recovery of some tangible evidence in merchandise or money. Identifiable cash recovered from the person of the suspect is the best kind of evidence. This is often referred to as a "pocket case." Proper questioning based on observation of highly suspicious actions can often result in admissions of theft. Without further evidence, the best course of action is to explore the feasibility of obtaining restitution. Oftentimes, the employee admits to frequent thefts going back over a period of weeks or months. The amount of money involved can be significant. Very often

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restitution can be ordered and arranged through the courts. It is unwise to seek restitution without legal advice.

~ UNDERCOVER INVESTIGATION

Undercover investigation has long been used for providing intelligence information and is no less applicable to retailing. With sophisticated retail security, improved training and techniques, and the utilization of modern technology's latest advances in equipment and devices, the value and effectiveness of undercover investigation cannot be minimized. As a loss prevention tool, it can provide information to security and other management that is not easily obtainable by any other means. In practice, investigators posing as employees are placed within a firm. This effects their "cover" and should be done through normal placement procedures, with as few people "in the know" as possible during the term of the investigation. Resulting meaningful information is then accurately conveyed, as quickly as possible, to those executives who can put it to work. Once placed, these investigators then blend and mingle, developing relationships with their associates for the purpose of locating and identifying employee dishonesty. This is the primary objective under most circumstances and one which cannot generally be accomplished by in-house security personnel, because of known identities, techniques and so on. Additionally, relationships

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which are fruitful are evolved over a period of time and require patience and planning in developing the confidence of targets or other coworkers. While some information comes from occasional observation of isolated spontaneous thefts, the major portion of criminal information is developed over a longer period, after purposeful planning of the operative's approach to acceptance, and effective performance. Most information is developed through confidential conversation, initially with the use of comments and remarks specifically designed to elicit a response. This, of course, must always remain within legal boundaries regarding entrapment. The loss prevention aspects of undercover investigation apply not only to criminal loss, but also to loss by other means. Loss and exposure to loss in operational areas can be pinpointed

through monitoring of adherence to policy and procedures, conditions conducive to costly casualty loss, supervisory inadequacies, systemic deviations, and so on. Also, loss prevention can apply to loss of personnel. Here, loss is generally insidious but can have devastating financial effects. This also applies to loss, occasional and isolated as it may be, of public esteem because of poor customer service or other reasons. All of these factors contribute to loss, larcenous or otherwise. Loss prevention is vital in each area to insure profitable operation and to increase the "bottom line." Undercover investigation can be effective in accomplishing this. Ordinarily the information from undercover is used to develop cases in an independent manner, so as to avoid exposing the original source.

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When the information is deemed critical and there appears to be little or no chance to proceed in another way, the cover may be blown. Causes of business losses, other than employee-related, may be due to shoplifting, robbery, burglary, bad checks, stolen credit cards, vandalism bombings, and arson. Techniques for prevention and investigation of the most prevalent of these crimes are included in this section.

~ PREVENTION OF SHOPLIFTING AND OTHER CRIMES

The most efficient way to deal with the problem of crime is to take necessary steps to prevent it from taking place. Although it is unrealistic to expect to eliminate all crime, the proper use of people and equipment will have some effect in reducing the total incidence of theft and destructive acts. Some ideas are:

1. Security Guards

2. Plainclothes Detectives / Private Investigators

3. Fitting-Room Attendants

4. Shopping Services

5. CCTV Servaillance Systems

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6. Employee Incentive Programs

~ SECURITY INVOLVEMENT BY STAFF

The successful security program is expected to prevent theft. Since the commission of crime cannot be wiped out, recovery of merchandise is equally desired. There are many retail stores that do not have a security staff per se. In such companies the security effort depends on sales help, cashiers, stock persons, and others. Even where a security staff does exist, the total security effort will be more effective if the other employees are involved too. They must be trained to spot shoplifters and taught the action to take to prevent the loss of merchandise. Ordinarily, these clerks and salespeople are not expected to apprehend wrongdoers. However, if specially trained and instructed, anyone may be expected to take necessary action, including detaining shoplifters. The actual apprehension of a person attempting to steal merchandise from a store requires knowledge of penal statutes and codes which must be strictly obeyed. lest civil and criminal charges result from wrongful actions. The safest policy to follow with all employees, except those specifically employed in a security role, is to design programs aimed at preventing theft.

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~ AWARDS AND BONUSES

Many employees perform better if there is an incentive program that encourages interest and participation. When a bonus is given to a salesclerk who pointed out a shoplifter, other employees sit up and take notice. While it is reasonable to expect wide participation in combating shoplifting, the average worker will hesitate before turning in a fellow employee. Although cash awards for such information are usually larger than shoplifter awards, such incentives are not very successful. Some firms pay bonus money to security people also, since this usually keeps productivity at a high level. However, this practice has been criticized as a bounty system leading to over zealousness and false arrests.

~ LOSS PREVENTION PROCEDURES

Although some shoplifting is inevitable, there are things that can be done to keep it to a minimum. All employees must be committed to enforcing those of the following procedures that are adopted by the establishment.

1. Articles of high value and easily pilfered should be safeguarded under glass or locked away.

2. Article surveillance or chains should be properly used.

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3. Merchandise should be returned to stock after showing it to customers.

4. Displays should be set up so that they do not clock easy viewing by employees.

5. Before being handed over to purchasers, contents of preboxed merchandise should be inspected.

6. ID should be requested of any strangers in nonselling areas.

7. Price tags should not be loose or easily removed.

8. Prompt attention should be paid to customers, always.

9. Salespeople should not to turn their backs to customers.

10. Legitimate purchases should be easily differentiated from other packages.

11. All discarded sales receipts found on floor or anywhere else should be picked up.

12. Salespeople should be alert to the fact that luggage, when

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purchased, may be filled with stolen merchandise.

13. Frequent inventories of expensive or desirable merchandise should be taken to detect the existence of a problem, so that immediate measures can be invoked.

14. Premises should not become a hangout. Employees should be alert to possibility of mass shoplifting.

15. There should be frequent inspections for empty boxes or containers. The foregoing procedures are but a sampling of the many steps that can be taken to combat losses. Other parts of this chapter on loss prevention offer additional recommendations.

~ SHOPLIFTING

Shoplifters come from all walks of life, and they may be of any age and either sex. Shoplifters may be classified according to several categories: professional, amateur, juvenile, addict, and kleptomaniac. Many people who steal for the first time do so on impulse, and if they are caught, there is a good possibility that they will quit. On the other hand, those who get away with theft will most likely steal again, since it becomes easier to pilfer each succeeding time. Shoplifting is similar to many other crimes in that the lawbreaker will tend

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to return to the same place where he or she was previously successful.

~ SHOPLIFTING METHODS

Following are some of the multitude of ways in which shoplifters operate:

1. Merchandise is concealed in boxes, bags or purses. Professionals may carry booster boxes.

2. Merchandise is concealed in clothing. Professionals may wear garments fitted with large pockets or hooks. Oversized garments may be worn to afford easy concealment.

3. Stolen garments are worn in plain sight and out of the store.

4. Merchandise is carried between thighs and hidden by long skirt or overcoat.

5. Professionals wrap garments around the legs and tuck them into tops of socks.

6. Small articles may be carried out hidden in the palm of the hand.

7. Some thieves snatch articles and run out of the store.

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~ INDICATIONS OF POSSIBLE SHOPLIFTING

Store personnel should be alert to the following signs that should cause suspicion of shoplifting.

1. People wearing overcoats out of season, or raincoats on a clear day.

2. People carrying boxes, bags, or umbrellas which could be used to conceal merchandise.

3. Nervous-looking people who are constantly touching the backs of their heads, tugging at sleeves, or adjusting socks.

4. Exceptionally fussy people who cannot seem to make up their minds about a purchase, or do not appear interested in purchasing an article that they have been examining.

5. People who walk around and constantly keep one hand in a pocket.

6. People who come back to the same area of a store several times.

7. People who are busy looking about, rather than at merchandise. People who appear to be nervous.

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8. People who walk into stockrooms or behind counters and have no business in such places.

9. Men who carry shopping bags.

~ APPREHENSION OF SHOPLIFTERS

Many states have enacted laws specifically aimed at shoplifting. Otherwise the crime of shoplifting is covered by the larceny statutes. Generally, once it has become evident that the intent of the individual is to steal the article, the crime has been committed. If the suspect secretes the merchandise inside a shirt or under a dress, it may not be necessary to wait until the person exits from the store. However, there are jurisdictions and there are individual judges who do not agree on this point, hiding that unless the suspect has gone past the last possible cash register where payment could be made, the intent is not clear and it can be rebutted. Therefore, unless the statute is extremely clear on this point, the safest course of action is to make the first contact with the shoplifter at the exit. The store detective should attempt to keep the apprehension as low key as possible. There is less chance of disturbing other shoppers or of creating a physical confrontation when this is

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done properly. Store personnel must be alert and watch for the unexpected. The shoplifter may attempt to run, may assault the employee, or may even pull a weapon. The training of the security staff is the key to ensure proper action in accordance with developing circumstances. When guards are posted at or near exits, they should assist in apprehensions if requested. Ordinarily, the suspect will come along quietly when asked. If the detective has made proper observations, the recovery of stolen articles should be uncomplicated. Suspects should be frisked for weapons and, when necessary, a complete search may be made. The use of handcuffs is recommended when appropriate.

~ CHECKS

A significant portion of retail sales is transacted by personal checks. To many thieves, there is less risk in passing a bad check than in shoplifting. Unless there are meaningful controls that are adhered to by employees who accept these checks, the losses can become staggering. The following guidelines will help to promote caution in accepting checks.

1. Examples of bad checks a. Drawn on a nonexistent or closed account. b. A forged check drawn on a legitimate account. c. A counterfeit check.

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2. Acceptance procedures a. Accept only personal checks payable to the store. b. Inspect the check:

1. No postdated or undated checks 2. If out-of-town bank, use extra care. 3. Must be written in ink; no erasures or corrections. 4. Numerical amount and written amount must agree. 5. Should be for exact amount of purchase. 6. Be careful of "starter" checks. 7. Be careful when customer appears unconcerned about price. 8. Company should maintain a listing of previous bad check passers; consult list

9. Call bank if amount is over a predetermined amount or out-of-state. 10. If bank is closed, suggest delivery of merchandise. 11. Do not be pressured into accepting check too fast. 12. Require valid identification. 13. Compare signature and photograph. 14. Record all information on back of check.

3. Acceptable identification a. Two forms of ID should be required. b. Legitimate driver's license. c. Licenses (pistol, and so on), permits or ID cards with

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photos. d. Local Bank Card. e. Medicare cards for elderly customers who do not have drivers licenses.

Unacceptable identification includes: social security cards, bankbooks, utility bills, library cards, birth certificates, learners' permits, or membership cards.

~ INVESTIGATION OF BAD CHECKS

If a bad check is inadvertently accepted, the following procedures should be instituted:

1. Insufficient funds a. Re deposit and notify maker. b. If still insufficient, request immediate payment; turn over to collection agency, or debt recovery service. c. Final alternative is prosecution. d. Check with police on local practice and procedure.

2. Closed accounts and forgeries a. Identify the check passer. This may be difficult or impossible because the check may have been stolen or the clerk may not recall the individual

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b. police reports and notification to banks, motor vehicle bureau, credit card companies tend to verify the depositor's statements in connection with the whereabouts of the check. c. Interview cashiers to get leads. d. Publicize current names or aliases being used. e. Communicate with other retailers and the police. f. Alert refund departments. g. Prosecute when absolute identification has been made.

~ CREDIT CARDS

Losses due to acceptance of lost or stolen credit cards are on the increase. Suggested procedures which help cut such losses are:

1. Examine card for authenticity; expiration date. Imprinted name and signature must match.

2. Use terminal or telephone to obtain authorization.

3. Follow instructions according to code. If "hot card," confiscate if possible. If above floor limit, may need additional ID. Customer may be advised "cash only".

4. Be aware that lost or stolen cards issued by out-of-state banks experience unusual time lag in appearing on "hot list".

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5. Examine ID carefully; compare signatures.

6. Be wary of customers who appear unconcerned about price of merchandise.

7. Watch out for customers in a hurry, particularly at closing time.

~ MISCELLANEOUS CASHIER GUIDELINES

In addition to adhering to acceptance procedures with checks and credit cards, employees who handle sales transactions must be constantly alert to render efficient service, pay attention to prices, and safeguard the contents of registers. Training and instructions such as the following should cover potential problems:

1. Know the merchandise; prices; number of pieces.

2. Do not turn away from an open register drawer; keep it closed between transactions.

3. Do not count the contents of register on the selling floor.

4. Do not leave register unlocked; take the key.

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5. If unusual amount of cash has been taken in, request it be collected.

6. If customer claims to be shortchanged, request assistance.

7. Allow only properly identified persons behind showcases and counters.

8. Be alert to detect counterfeit bills.

a. Portrait appears lifeless and background lines not distinct. b. Treasury seal may have uneven points. c. Border lines are not clear and distinct. d. May be printed on bond paper without red and blue fibers; or printed with red and blue lines to resemble fibers. e. Strip in $10, 20,50, 100.

9. Be alert for till tappers.

a. They create confusion, drop change, start an argument, divert attention while accomplice steals from register. b. On any suspicion, close the drawer.

~ REFUND OPERATORS

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Some shoplifters find it more lucrative to refund stolen goods than sell them. Very often items that have been purchased with bad checks are converted into cash this way, especially by professionals. Some thieves find it less risky to seek a refund for stolen merchandise without ever leaving the store. Some policies which may be established to combat these practices follow:

1. Make refunds payable by check in the mail. 2. Insist on price tickets and sales receipts. 3. Verify merchandise and price in appropriate selling department. 4. Examine documents for alterations or erasures. 5. If purchase was made by check, allow time to clear. 6. Make refunds on credit card purchases through account. 7. Steal an item of merchandise, return same item for a refund without sales slip.

~ CONCLUSION

Shrinkage is an insidious illness which does not cure itself. Proper systems will contribute toward prevention of losses, but there must be constant follow-up and reevaluation to ensure that what was adequate yesterday is still applicable today. Crime is on the march, and new schemes are constantly being devised. Expertise i loss prevention is as essential in today's retail world

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as fashion and salesmanship. The merchant has recognized and accepted the fact the money spent to protect company assets does its share in providing profits.

Mr. Lamoureaux has contucted and supervised many retail undercover operations for some of the largest retail chain stores within the United States. Should you have any questions contact ABD Federal Investigative Agency, Inc. @ (407) 777-2878 or E-Mail Compuserve @ 74021,1516 RETURN TO NAIS NEWSLETTER MENU

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