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Retail sleuth
By: By MARK ALBRIGHT
Beall's top cop explains stores' antitheft technology, and what the future holds.
Retailers' losses to theft hit a 14-year low in 2004, but a private army of loss prevention agents isn't breaking out the champagne.
Theft by retailers' workers is now a bigger problem than shoplifting. Professional theft rings are getting more violent. The war against retail theft is being won with a boost from technology, but there's more to come including biometrics such as retina or fingerprint scanning that could replace the credit card.
Dan Doyle, 47, is vice president of loss prevention and human resources at Beall's inc., a Bradenton chain with annual revenues of $1-billion from 550 outlets and department stores. The chairman of the National Retail Federation Loss Prevention Council, Doyle talked about this changing field that still works mostly in the shadows.
The old image of loss prevention is a gum-shoe store detective who tracks prey through a peephole. How has the field changed?
It's become more sophisticated, complex and driven by technology. We're considered more of a career opportunity. About a third of the people in the field have a college degree. Most wanted to enter this field by choice. We recruit college interns among our 200 loss prevention agents at Beall's. Most of our agents work the sales floor, but our role has become far broader. We're responsible for disaster preparedness, inventory control, Homeland Security issues as well as handling internal investigations of sexual harassment and discrimination cases. We've become sort of the internal police departments for retailers, but we prefer to think of ourselves as business partners who weave security into stores rather than the other way around.
How has technology changed the business?
When I started in 1980 as floor agent at a Lord & Taylor in Texas, the store had one video camera and every transaction was done on a handwritten ticket. Today a typical department store has 15 to 20 cameras plus cameras covering the parking lot. We have antishoplifting tags on more merchandise. The cameras zoom in enough to show the serial number on a dollar bill and superimpose the register transaction on the same frame. In a lot of cases we're using computer files for exception reporting that leads us to suspects rather than our spotting them on our own. Vendors are working on software that's programmed to direct the cameras automatically to record gestures like customers putting things in their pockets.
Nobody knows exactly how much merchandise is stolen, only how much turns up missing. If you don't adjust for sales growth or inflation, missing inventory remained steady at about $31-billion over the past five years. But losses nationally reached a 14-year low of 1.5 percent of $2-trillion in sales in 2004, according to the National Retail Security Survey that is compiled by researchers at the University of Florida. That's down from 1.95 percent a decade ago. Are you winning the war?
We're making a dent in it, but retail theft is still the largest economic crime in the country. Retail theft is like a balloon. You squeeze down one part and another part pops up as the bad guys figure out how to get around your deterrents. It's not a victimless crime because the average household ends up paying $400 to $500 a year for it in higher prices.
Inventory losses were once evenly split between employee theft and shoplifting. Now shoplifting has declined to 34 percent while employee theft is 47 percent. Who is the typical shoplifter?
There is no typical shoplifter. We get them from 7-year-old kids to 90-year-old grandmothers in every income group. We watch for behaviors. People wearing clothes that are out of season. People's eyes darting about before they put something in their pocket. I've seen people push 40 shirts down their pants or two pairs of Nikes. We've had people hide jewelry in body cavities. We've caught grandmothers dropping rings into half-full soda cans. Some people even use their children as a prop to steal. They'll stuff things in a blanket tucked around their baby in a stroller. People even try to chew off the antishoplifting tags. I've seen blood on them.
Is the garden variety shoplifter always nonviolent?
No. The worst case I remember was in Bradenton several years ago. Our agent chased a 15-year-old female shoplifter. She got in her car and drove right at him. He bounced off the windshield. Then she backed into a new Jaguar and plowed into a third car. Our agent was hospitalized, but survived. I remember thinking: "Was this all worth a $15 T-shirt?'
How have professional theft rings changed tactics?
We think they're responsible for about a third of all shoplifting losses. These are people who make their living stealing. Some are nonviolent gypsy gangs. But many are professionals who are getting more violent. In Florida a few years ago they would steal a car and just drive it through the front door of a store late at night. They would grab everything they could in the wreckage, then run off to a getaway car. We hardened the entrances with buried posts and such. Now they just come in armed. They've cased the place and go right for the most expensive merchandise or where the cash is supposed to be. Some of them even carry the tools to remove shoplifting tags. Now they are more often armed with weapons including guns, razors, knives or pepper spray. When they hit you, it's quick. They shot an agent in Ohio the other day.
What are retailers doing to catch up?
Retail loss prevention people are collaborative. There are hundreds of people in this industry in the Tampa Bay area, so there are many networks that share information. A frustration, though, is groups that just work their way down I-95 going from mall to mall. One guy gets arrested for shoplifting, bonds out and just moves on to the next town. Nobody keeps track of them. We are organizing a task force to create a national database of thieves with their pictures and history so we can share the information with each other and offer access to law enforcement agencies.
What has all this technology done to help get state attorneys to prosecute cases based on the evidence you provide them?
It's helped, but it's changing. Prosecutors more often took our word if we had recovered the merchandise. Now some of them say: "No film, no case.' The camera used to provide the icing on the cake. Now it's becoming the whole cake.
Many shoppers think the cameras are there to monitor their behavior. In reality they are watching your employees because they are responsible for 47 percent of all retail losses.
Absolutely.
How do computers detect employee theft?
We use the computer to find exceptions to established norms such as return and refund activity at various times of the day. We had an employee in Lake Worth steal more than $100,000 in cash and merchandise from us last year. The computer found her by exception reporting that linked her to refunds paid for missing inventory during the hours she was on the job. Then we used the cameras to verify the behavior. Some of it was merchandise she gave away. The most common scheme is fraudulent returns. In this case she avoided detection longer than normal because she used several other employees' numbers to process returns. We photographed her ringing up returns when there was no customer. She got five years on probation for felony theft.
How did you get in this business?
I've always been interested in law and human behavior. I toyed with law school. I considered the FBI after I got my degree in sociology from the University of Wisconsin. But friends advised me there was more money in private security. I got a job with a security firm in Texas that did a lot of work for the oil companies. Perhaps the most unusual assignment was tailing some of the Saudi royal family for the Saudi government. I did some undercover work for Lord & Taylor and realized I like working in retailing.
How much can you earn?
Loss prevention budgets now are about 0.5 percent of a chain's sales. That was unheard of when I started in 1980. In larger markets you can earn $8.50 to $10 an hour to start. You can advance relatively quickly to manager. The top hourly rate is $15 to $20 for a floor agent, but regional managers are up into the $50,000 range.
What is the most common misconception about this work?
That we have cameras in the fitting rooms. I don't know of anybody that does that.
One survey found that 56 percent of retail chains today are testing biometrics, automated methods of recognizing someone by some physical characteristic embedded in a card. What's the future in using such technology to verify someone is who they say they are?
Many retailers are using biometrics such as retina scans or the dimensions of fingers or hands for access control to headquarters and warehouses. Facial scanning doesn't seem to be gaining much acceptance. Some chains now use fingerprint readers to log associates on to cash registers. One German chain uses a fingerprint reader instead of a plastic card for store credit. You just hold out your finger and your account is charged. With identity theft rising, that could become a way to identify customers like these companies use it now to identify their employees.
Retailers' losses to theft hit a 14-year low in 2004, but a private army of loss prevention agents isn't breaking out the champagne.
Theft by retailers' workers is now a bigger problem than shoplifting. Professional theft rings are getting more violent. The war against retail theft is being won with a boost from technology, but there's more to come including biometrics such as retina or fingerprint scanning that could replace the credit card.
Dan Doyle, 47, is vice president of loss prevention and human resources at Beall's inc., a Bradenton chain with annual revenues of $1-billion from 550 outlets and department stores. The chairman of the National Retail Federation Loss Prevention Council, Doyle talked about this changing field that still works mostly in the shadows.
The old image of loss prevention is a gum-shoe store detective who tracks prey through a peephole. How has the field changed?
It's become more sophisticated, complex and driven by technology. We're considered more of a career opportunity. About a third of the people in the field have a college degree. Most wanted to enter this field by choice. We recruit college interns among our 200 loss prevention agents at Beall's. Most of our agents work the sales floor, but our role has become far broader. We're responsible for disaster preparedness, inventory control, Homeland Security issues as well as handling internal investigations of sexual harassment and discrimination cases. We've become sort of the internal police departments for retailers, but we prefer to think of ourselves as business partners who weave security into stores rather than the other way around.
How has technology changed the business?
When I started in 1980 as floor agent at a Lord & Taylor in Texas, the store had one video camera and every transaction was done on a handwritten ticket. Today a typical department store has 15 to 20 cameras plus cameras covering the parking lot. We have antishoplifting tags on more merchandise. The cameras zoom in enough to show the serial number on a dollar bill and superimpose the register transaction on the same frame. In a lot of cases we're using computer files for exception reporting that leads us to suspects rather than our spotting them on our own. Vendors are working on software that's programmed to direct the cameras automatically to record gestures like customers putting things in their pockets.
Nobody knows exactly how much merchandise is stolen, only how much turns up missing. If you don't adjust for sales growth or inflation, missing inventory remained steady at about $31-billion over the past five years. But losses nationally reached a 14-year low of 1.5 percent of $2-trillion in sales in 2004, according to the National Retail Security Survey that is compiled by researchers at the University of Florida. That's down from 1.95 percent a decade ago. Are you winning the war?
We're making a dent in it, but retail theft is still the largest economic crime in the country. Retail theft is like a balloon. You squeeze down one part and another part pops up as the bad guys figure out how to get around your deterrents. It's not a victimless crime because the average household ends up paying $400 to $500 a year for it in higher prices.
Inventory losses were once evenly split between employee theft and shoplifting. Now shoplifting has declined to 34 percent while employee theft is 47 percent. Who is the typical shoplifter?
There is no typical shoplifter. We get them from 7-year-old kids to 90-year-old grandmothers in every income group. We watch for behaviors. People wearing clothes that are out of season. People's eyes darting about before they put something in their pocket. I've seen people push 40 shirts down their pants or two pairs of Nikes. We've had people hide jewelry in body cavities. We've caught grandmothers dropping rings into half-full soda cans. Some people even use their children as a prop to steal. They'll stuff things in a blanket tucked around their baby in a stroller. People even try to chew off the antishoplifting tags. I've seen blood on them.
Is the garden variety shoplifter always nonviolent?
No. The worst case I remember was in Bradenton several years ago. Our agent chased a 15-year-old female shoplifter. She got in her car and drove right at him. He bounced off the windshield. Then she backed into a new Jaguar and plowed into a third car. Our agent was hospitalized, but survived. I remember thinking: "Was this all worth a $15 T-shirt?'
How have professional theft rings changed tactics?
We think they're responsible for about a third of all shoplifting losses. These are people who make their living stealing. Some are nonviolent gypsy gangs. But many are professionals who are getting more violent. In Florida a few years ago they would steal a car and just drive it through the front door of a store late at night. They would grab everything they could in the wreckage, then run off to a getaway car. We hardened the entrances with buried posts and such. Now they just come in armed. They've cased the place and go right for the most expensive merchandise or where the cash is supposed to be. Some of them even carry the tools to remove shoplifting tags. Now they are more often armed with weapons including guns, razors, knives or pepper spray. When they hit you, it's quick. They shot an agent in Ohio the other day.
What are retailers doing to catch up?
Retail loss prevention people are collaborative. There are hundreds of people in this industry in the Tampa Bay area, so there are many networks that share information. A frustration, though, is groups that just work their way down I-95 going from mall to mall. One guy gets arrested for shoplifting, bonds out and just moves on to the next town. Nobody keeps track of them. We are organizing a task force to create a national database of thieves with their pictures and history so we can share the information with each other and offer access to law enforcement agencies.
What has all this technology done to help get state attorneys to prosecute cases based on the evidence you provide them?
It's helped, but it's changing. Prosecutors more often took our word if we had recovered the merchandise. Now some of them say: "No film, no case.' The camera used to provide the icing on the cake. Now it's becoming the whole cake.
Many shoppers think the cameras are there to monitor their behavior. In reality they are watching your employees because they are responsible for 47 percent of all retail losses.
Absolutely.
How do computers detect employee theft?
We use the computer to find exceptions to established norms such as return and refund activity at various times of the day. We had an employee in Lake Worth steal more than $100,000 in cash and merchandise from us last year. The computer found her by exception reporting that linked her to refunds paid for missing inventory during the hours she was on the job. Then we used the cameras to verify the behavior. Some of it was merchandise she gave away. The most common scheme is fraudulent returns. In this case she avoided detection longer than normal because she used several other employees' numbers to process returns. We photographed her ringing up returns when there was no customer. She got five years on probation for felony theft.
How did you get in this business?
I've always been interested in law and human behavior. I toyed with law school. I considered the FBI after I got my degree in sociology from the University of Wisconsin. But friends advised me there was more money in private security. I got a job with a security firm in Texas that did a lot of work for the oil companies. Perhaps the most unusual assignment was tailing some of the Saudi royal family for the Saudi government. I did some undercover work for Lord & Taylor and realized I like working in retailing.
How much can you earn?
Loss prevention budgets now are about 0.5 percent of a chain's sales. That was unheard of when I started in 1980. In larger markets you can earn $8.50 to $10 an hour to start. You can advance relatively quickly to manager. The top hourly rate is $15 to $20 for a floor agent, but regional managers are up into the $50,000 range.
What is the most common misconception about this work?
That we have cameras in the fitting rooms. I don't know of anybody that does that.
One survey found that 56 percent of retail chains today are testing biometrics, automated methods of recognizing someone by some physical characteristic embedded in a card. What's the future in using such technology to verify someone is who they say they are?
Many retailers are using biometrics such as retina scans or the dimensions of fingers or hands for access control to headquarters and warehouses. Facial scanning doesn't seem to be gaining much acceptance. Some chains now use fingerprint readers to log associates on to cash registers. One German chain uses a fingerprint reader instead of a plastic card for store credit. You just hold out your finger and your account is charged. With identity theft rising, that could become a way to identify customers like these companies use it now to identify their employees.