Among the chapters by UK authors in the new Palgrave book ‘Retail Crime – International Evidence and Prevention‘ is by the independent retail and loss prevention academic Prof Joshua Bamfield, pictured, of the Centre for Retail Research. Here’s a digest of his chapter, ‘International Trends in Retail Crime and Prevention Practices’. He’s also the author of Shopping and Crime, also published by Palgrave. He suggests those trends include smaller loss prevention budgets; and growth in customer theft, Cybercrime, and organised retail crime.
Loss prevention is now treated by retailers as a more important element in corporate performance. Unfortunately this has come at a time when resources are tightly stretched. A new institutional loss prevention, NILP, is focused on: working with and through others; responsible for systems, procedures and compliance; and adopting a risk management approach. They also try to work in partnership with external organisations.
Several authors have pointed to a crime cycle in loss prevention. An increase in crime is met with higher budgets and additional resources resulting in a fall in crime: the fall in crime ultimately leads to budgets and personnel being cut. After some time, crime may then start to rise.
The growing use of analytics and artificial intelligence (AI) against employee theft at checkouts is important: AI software, CCTV and checkout audit trail are used to identify potentially criminal actions and errors that indicate crime or poor checkout practice
Conclusion
The aim of retail loss prevention is to minimise crime and loss, subject to the constraints of disproportionate spending on security or excessive sacrifice of sales and profits.
However monitoring the work of loss prevention is problematic: security outputs are hard to evaluate and the actual measurement of crime (and crime trends) either directly by crime detections and apprehensions or indirectly via shrinkage may be inaccurate. It is hard to determine, therefore, what should be the optimal level of loss prevention spending for a business and how this budget should be divided between projects. Loss prevention departments increasingly use data analysis including analytics to manage risks.
There is some evidence from national surveys of retail crime that crime losses suffered by retailers have been falling in the current decade, although recent figures indicate that the downward trend in losses may have reversed. The closure by large chains of many of their worst-performing stores will have reduced shrinkage losses as such stores are likely to suffer multiple trading issues including above-average levels of shrinkage and crime.
Loss prevention, like other functional departments in retailing, have suffered reductions in budgets resulting from the aftermath of the 2007-08 recession and by increased competition and lower margins of the industry in many countries. This has produced two main effects. Loss prevention has retained its focus on crime, but taken responsibility for other areas of loss such as waste and administrative error, become more involved in audit and operational compliance (including fire, health and safety) and developed competence in risk management. This new institutional loss prevention as it is called here is applied in different ways in each large retailer, but loss prevention has come a long way from its original concern primarily with arrests and asset protection.
To work well it requires cooperation with other operational and functional areas in the business, shared responsibility and expertise in developing new systems and procedures. Retailers work closely with other retailers and share information about crime trends. They are normally keen to develop links with national bodies, and police and law-enforcement agencies in order to create partnerships some of which deal with effective handling of low-value high-volume crime and others dealing with patterns of high-value crime that may involve organised crime, violent gangs, attacks on distribution and other concerns where retailers may have more up-to-date information about patterns than the police.
Retailers have continued to make capital spending for loss prevention. Asset protection approaches using tagging remain important, and heavy investment has been made in CCTV. CCTV is not only being used to combat theft and provide evidence of crime, but has become a risk-management tool in a time of concerns about terrorism and increasing violence as well as a technology supporting retail marketing through store counts and merchandising display analysis. The intention is to create resilience to protect staff and customers and company assets both against significant events as well as the continual losses through frequent small-scale theft.
You can also access two free open chapters of ‘Retail Crime’ (eight and nine), via SpringerLink: https://bit.ly/2Itmh3o.
