Latest issue
Online newsletter
Product Knowledge
Retail security
June/July 2010

Retail crime

is Alarming!

Retailers lose more each year from pilfering, shoplifting and even employee theft than from armed robberies. BEVAN FRANK investigates how retailers can address these security concerns and improve profitability

The good news is that there has been a 44% drop in armed robberies in SA shopping malls in April this year compared to last year. The bad news is that the average retailer stands to lose more through pilfering, shoplifting and employee theft than highly publicised robberies.

According to the 2008 and 2009 Global Retail Theft Barometer, retailers across the world lost $115bn (R870bn) to theft in 2009 — significantly up from the $105bn (R795bn) in 2008. Shoplifting increased from 41% to 43% of losses and employee theft decreased from 37% to 36%. Shoplifting is ranked as the most common cause of loss for retailers, with employee theft ranked second, followed by administration errors and supplier/vendor theft.

The South African retail industry loses approximately R2bn per annum to shrinkage, or theft through unknown incidents, says Michael Broughton, director of the Crime Prevention Programme of the Consumer Goods Council of South Africa (CGCSA), “In other words, the store management are not aware of the theft when it takes place, and as such, the proportions of theft by employees or customers are ‘unknown’ as well,” says Broughton. “However, according to our estimates, approximately 66% of losses can be attributed to employees of the stores, the logistics companies, the merchandising companies, and the manufacturers.”

The CGCSA Crime Prevention Programme works hand-in-hand with its members to reduce crime by gathering non-competitive data, and developing effective crime prevention strategies through communicating information, best practices and minimum standards in close liaison with the SAPS.

Broughton believes that to reduce pilferage requires “continuous reviews of processes, CCTV cameras, security procedures, training and development and motivation of staff.”

But, security solutions to combat theft need to be based on the client’s unique issues, cautions Antonio Smith, manager commercial systems at ADT Security. He believes that analysing statistics of past results will determine the way forward.

“Retailers should look at the losses from the previous year and target those areas of risk at store level proactively.”

Use technology

Technology is the key tool to minimise theft and reduce pilfering or shoplifting in retail stores, believes Smith. The implementation of EAS (electronic article surveillance) to reduce shoplifting, combined with a CCTV camera to stop employee theft, is a winning combination, he advises.

Smith maintains that the Sensormatic® anti-shoplifting EAS products and Sensormatic® Analytic solutions are the preferred choice of leading retailers around the world, and are used in 80% of the top 100 global retailers. Virtually any item in a store can be protected with these security tags or labels. High value items, such as clothing, can be protected with a prominent tag, while small pocketable items can be protected with an adhesive label.

“With tagging at source — the anti-theft labels or tags are placed on products at the point of manufacturing or at distribution level — there is no need to use expensive staff time to attach them in store,” he explains.

For total security — including armed robbery — EAS is the most common and effective technological solution, linked to a CCTV camera, physical resources, physical lockers that become part of the alarm solution, as well as an alarm/intrusion/panic button with armed reaction as back-up.

Troops in the trenches

Secondly, says Smith, human resources are of paramount importance.

“The physical resources that will be used to manage and lower the risk at store level need to become part of the solution. Without the commitment and buy-in from the troops in the trenches, results will be difficult to obtain.”

But, the physical resources need to supplement technology. “During the recession, retailers opted to invest in guards rather than in technology, which resulted in an increase in retail losses worldwide,” says Smith.

Incentives have played a role in reducing employee pilfering in other parts of the world. “It has, for example, been found to work in stores in England,” says Broughton.

“Retailers offer incentives to staff, based on turnover to target, as well as losses to target,” explains Smith, but in order to make a difference, this needs to be extended to everybody in the store, not just to the management.

Store layout

Smith acknowledges that store layout can play a very important role in the potential risk at store level. This includes the location of fitting rooms, the positioning of high-priced merchandise, lighting, the height of displays, open architecture vs closed, the positioning of till points and access to the stock room, to name but a few. Smith says that the placing of these would all in some way increase or lower the risk of theft at store level.

Company culture

A change in company culture will also make a difference. “Retailers need to stop budgeting for losses and address them proactively,” says Smith. “The increase in losses has a direct impact on consumers when retailers are budgeting for them. Calculations should be at RSP and not at cost. If basic housekeeping is in place, managing risk with technology will become a very simple process.”

Smith believes that as the economic downturn continues, SA retailers will see a move from luxury items to essentials being stolen. “Once the 2010 dust has settled, we may head into difficult times and retailers need to implement technology to lower the potential risk for the future increase in shrinkage.”

It is clear that retailers need to return back to basics. “Retailers need to implement a principle-based culture at store level and get everyone to understand that crime and shrinkage affects them all, directly or indirectly,” emphasises Smith. “Regarding any technology that has already been implemented, retailers need to make sure that it is all working correctly. Stay away from grey generic products been offered in the market. Retailers should affiliate their business with an organisation which they can invest in and know is going be around to offer ongoing support and new developments.”

He believes that it is imperative to build a relationship with technology service providers as it forms part of the solution. “Avoid a ‘box’ provider with no service follow-through, and go for a solution-based offering,” Smith says.

Retail theft is a worldwide problem, with SA by no means leading the pack. Globally, North American and Latin American retailers spend the most on “loss prevention” solutions, followed by Africa and the Middle East (both ranked third). Africa also ranks third, behind North America and Europe, in terms of the costs of “loss prevention” as a percentage of sales.

Correct use of CCTV

The best technology or security system will, however, not give you the results you need if it has been incorrectly installed or used. The SAPS, in partnership with the business sector, developed various guidelines regarding the installation of CCTV systems at business premises, explain the CGCSA.

  • It might sound obvious, but store owners need to identify the strategic points where the cameras will have the best coverage. Ensure that there are no displays or decorations that obstruct the cameras.

  • All cameras need to be in good working order and should be regularly maintained and inspected. Store managers or owners are advised to keep a record of the dates of these inspections. One doesn’t want to be in a situation where the store falls victim to a crime and the camera misses it because of a lack of being maintained!

  • Furthermore, ensure that the cameras are properly focused and ensure that the image through the camera is the actual image required. The time and date stamp on the cameras should also obviously be correct!

  • Although it appears that load shedding is thankfully a thing of the past, one should be prepared for any possible power failure. Have back-up systems in place and ensure that there will always be an uninterrupted power supply.

  • Store owners are advised to ensure that all personnel who use these security systems are adequately trained and have a good working knowledge of the technology. Have a sign-in record for users of the system and make sure there are system manuals available.

  • In case of an incident, the CGCSA advocates that handling procedures are essential. Store owners should ensure that their staff members are familiar with the correct handling procedures. It is important that as few people as possible handle the evidence. This is described as a ‘short chain of custody’. Camera footage should be clearly labelled and sealed and the original footage must be kept in safe hands. In the event of a court case, those who handle the evidence must be prepared to testify in court should the need arise.

  • For more information on the CGC Crime Prevention Programme contact Michael Broughton on Tel:789 5777 or

  • For more information on ADT, visit

  • Security Tips for Businesses

    Below are a number of practical measures suggested by Business Against Crime SA to assist in preventing armed robberies at your business premises:

    1 Cash Management

  • Do banking on a daily basis, to restrict the amount of cash in the tills.

  • Vary the times of banking.

  • Do not display that you are on your way to the bank

  • 2 Amavuso SMS Alerts (CGCSA)

  • Obtain information as to where suspicious vehicles/persons activities can be reported (e.g. CGCSA).

  • Be vigilant so as to notice suspicious behaviour/activity.

  • Record suspicious behaviour/activity e.g. registration numbers, description of people.

  • 3 Vetting of Security Guards

  • Use the services of reputable guarding companies.

  • The security guards should be rotated.

  • Insist that guards are vetted on a regular basis.

  • Ensure that the security company is registered with PSIRA.

  • 4 Controlled entrances

  • Controlled entrances ensure that the premises are not overcrowded.

  • Restrict movement at entrances and exits to your premises.

  • 5 Be alert during opening and closing times

  • Work in pairs to prevent being overpowered or surprised e.g. when taking out trash.

  • Request to be accompanied by Security staff, if available.

  • 6 Keep a visible list of all emergency numbers

  • Keep a list of emergency numbers e.g. local police station, ambulance, etc, that is visible to all staff.

  • Have an emergency number on quick dial.

  • Invest in a panic button to be worn on the body.

  • 7 Verify and keep staff aware of all maintenance being done

  • Train staff to ask for identification and to call for verification before allowing entrance to the premises.

  • Insist on the verification of personnel employed by builders and maintenance companies.

  • 8 Proper identification of staff employed (even temporary staff)

  • Ensure that a copy of the original identification document is obtained from all people employed.

  • Verify that the person to be employed stays at the address given as the residential address.

  • Obtain and verify contact details of close friends and relatives of the person employed.

  • After a robbery has been committed and the criminals have left the premises:

  • Contact your security company and/or the police

  • Contact emergency services (if necessary)

  • Move everybody outside the premises

  • Do not allow any entrance onto the premises, until the police have arrived

  • Do not touch or allow anybody to move, remove or disturb any item on the scene of the crime

  • Please be patient and allow the police to collect the necessary evidence from the scene of the crime, as this will greatly enhance the probability of an arrest and successful prosecution

  • Assist the police with information about the incident, as this may help the police to identify the perpetrators

  • Seek trauma counselling if necessary

  • Source: Business Against Crime SA

    *Read our copyright notice before making use of this article

    © SA Sports Trader