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A Review of Loss Prevention Strategies in

the Work Place

Keisha Padalec A00872963

Committee Members

A Review of Loss Prevention Strategies in

the Work Place

Signature

Subject Matter Expert Keisha Padalec FSCT Member Keisha Padalec

Mentor Joe Ilsever Other Patrick Neal

Course CRN Date Submitted

To

FSCT 8611

FSCT 8621 80849 02/15/16 Joe Ilsever

FSCT 8631

Loss Prevention Strategies 1

“Rely not on the likelihood of the enemy not coming, but on our own readiness to receive him; not on the chance of his not attacking, but rather on the fact that we have made our position unassailable” – Sun Tzu, “The Art of

War”

Loss Prevention Strategies 2

Table of Contents

Abstract……………………………………………………………………………………………………………………………………3

Introduction……………………………………………………………………………………………………………………………..4

Company X Overview……………………………………………………………………………………………………………….5

Literature Review………………………………………………………………………………………………………………...6-13

Methodology……………………………………………………………………………………………………………………….…14

Results and Discussion……………………………………………………………………………………………………………15

Conclusion……………………………………………………………………………………………………………………………..15

Appendix A………………………………………………………………………………………………………………………….16-18

Appendix B………………………………………………………………………………………………………………………….19-21

Appendix C………………………………………………………………………………………………………………………………22

Appendix D………………………………………………………………………………………………………………………...23-24

Appendix E……………………………………………………………………………………………………………………….…25-26

Appendix F………………………………………………………………………………………………………………………….27-29

Appendix G……………………………………………………………………………………………………………………………..30

Appendix H…………………………………………………………………………………………………………………………31-32

Works Cited…………………………………………………………………………………………………………………….….33-35

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Abstract This project examined Loss Prevention strategies at Company X in an effort to determine whether or not high risk assets are as secure as we believe they are. Low shrink rates at Company X suggest that high risk assets are secure however, the ease in which some assets can be removed suggests otherwise. Having adequate staff on the sales floor during peak hours lowers the opportunity shoplifters have to steal an asset. Over a period of 7 months primary data gathered through interviews with the General Manager at Company X, library books, the purchase of used books as well as various websites found online. It was found that effective customer service and properly functioning alarms on high risk assets are ideal ways to keep assets secure. If staff is properly trained in Loss Prevention and assets are secured effectively, shrink can be reduced. Customer can also enjoy a more pleasant shopping experience.

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Introduction

Loss Prevention is an important part of retail; it incorporates various policies and procedures that coincide with the law and company policies. Loss Prevention takes a proactive approach to reducing theft both internally and externally. Company X employs various Loss Prevention strategies which involve protecting assets both physically and digitally. Protecting the digital asset in loss prevention ensures customer and store data remains safe and uncompromised. Every company that uses Loss Prevention has their own strategies along with operational guidelines and policies and Company X is no exception. The purpose of this project is to determine whether or not the asset is as secure as we think it is. Company X is a large retail company with over 1,800 locations across North America alone; each store is a different size and where it is located geographically varies. These geographic locations impact the stores vulnerability; some stores are close to transit or within walking distance from residential neighbourhoods while some are more easily accessible by vehicle. Where a store is located will dictate whether or not they are a high shrink store and also how secure their products are. In other words, geographic location also determines how easily a thief can get away with stolen merchandise (Geographic Profiling Analysis, n.d.). Company X employs various Loss Prevention strategies which involve protecting assets both physically and electronically.

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Company X Company X: Who are they? Company X is a large retail chain with approximately 1,800 locations across North America. They carry thousands of items both in store and online; items such as electronics including but not limited to iPads, laptops, desktop computers, various tablets, cell phone and wireless accessories, coffee machines, furniture, cleaning and janitorial supplies, organization and storage solutions and much more. To make shopping more convenient for customers, Company X has expanded their services to include online shopping where customers can find over 150,000 different items that are not available in store. Online shopping allows customers to shop from home or work whenever it is convenient for them; it also allows the customer to have items shipped directly to them or they can come into Company X and pick up their items in store. What Does Company X Stand For? Company X is a diverse company that offers various opportunities for their employees to learn and advance in their career; the opportunities that are offered allow each employee, regardless of whether they are an hourly associate working full time or part time or a supervisor or member of management, to reach their full potential. The employees who are hired range from those who are seeking their first job to those who have since retired and are looking for something part time to keep them busy. Regardless of how long an employee has been with Company X, there is always an opportunity for advancement. A retail environment with a wide diversity of employees is a reflection of the customer base. Company X has a wide diversity in their staff employing people of all ethnicities, backgrounds and experiences. Since all customers come from a wide range of religions, beliefs, cultures and much more, employees are hired to reflect this. Hiring employees of various ages, experiences and backgrounds as well as employees from different ethnicities and cultures helps build a better relationship with the customer.

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Literature Review Reasons This Study Should be done Retail theft is a growing problem not just in Canada but on a global scale. Globally the retail industry loses approximately $278 billion dollars annually as a result of shrink. As of 2012 in Canada, the retail industry has seen an increase in shrinks rates with some businesses reporting rates as high as 2.19% and some reporting rates as low as 0.4%. This works out to a loss of approximately $10.8 million per shopping day or $4 Billion dollars annually (Retail Council of Canada, 2012). With losses this high retailers are working to increase their security measures while remaining cost effective. Retailers like Company X are opting to use more cost effective methods such as Electronic Article Surveillance tags (EAS tags) on products to secure high risk items in an effort to lower their shrink rates. Lower shrink rates will offer customers a better shopping experience because prices can be kept low. As shrink increases so do prices. When prices increase, employee hours get cut which means there are fewer associates on the floor to help customers and reduce shrink. Many companies are also starting to look towards Radio Frequency Identification (RFID) chips as a way of tracking their high risk merchandise; companies are asking their vendors to install these chips on pallets so the product can be tracked from the vendor to the store. This allows retailers to know exactly where their merchandise is at all times while also lowering shrink rates by ensuring that the product on the pallet matches the order request. Another way retailers such as Company X are working to reduce their shrink levels is by adopting the Buy Online-Pay In Store (BOPIS) method which allows the customer to go on line and choose their item and then pick it up in store. When the customer does this, the store they are purchasing from gets a notification and an employee puts the item aside so it is all ready to when the customer comes in to pick it up. At the time of pick up, the customer shows the associate a piece of ID to ensure that the right person is picking up the right item; in the stores computer system, the item is checked off and charge to the customers’ credit card. This Loss Prevention strategy helps reduce shrink by ensuring that merchandise does not leave the store without payment. Other ways retailers are working to reduce their shrink rates is by displaying “dummy demos” as opposed to “live demos.” The “live demos” are often kept under lock and key in the store lock up, these lock ups are not visible from the sales floor. The live demos are only taken out during business hours and shown to customers when an associate is available to keep an eye on the product. By keeping the live demos under lock and key, retailers have more control over their assets. This acts as a deterrent for would be shoplifters which in turn reduces store shrink levels. However, Loss Prevention is not just about securing the physical asset; it also covers cyber assets such as customer and store data. Data Breaches have also become an increasing problem in retail. Businesses all over Canada and the United States have been negatively affected by cybercrimes which often result in many people having their personal information compromised. With technology evolving at a rapid pace, the retail industry has been compelled to find new ways to keep their customer and business data secure against online threats. One of the methods used to keep customer

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information safe is Cloud Computing. However this however also comes with risks and is not immune to data breaches. What is Loss Prevention? Loss Prevention (LP) is the practice of applying company policies and procedures to reduce both internal and external theft, as well as cyber, theft while keeping customers and employees safe from potential harm. In retail, Loss Prevention practices can be carried out by security guards, a Loss Prevention Office or by employees and managers or all of the above. The goal of Loss Prevention is to reduce the amount of theft or shrink a store has. In order for shrink to be reduced, both the management and Loss Prevention teams need to work together to determine where the theft is coming from: internal, external, vendors or the cyber world. Loss Prevention also utilizes several strategies to act as a general deterrent for theft. These strategies may vary from business to business however the end goal is always the same: to prevent theft, reduce the overall shrink rate and keep employees safe. Some of the strategies used in retail include, but are not limited to, acknowledging customers when they walk in, being aware of the customers who are in the store and noticing any customers who appear to be carrying oversized bags or who may be dressed inappropriately for the time of year. A customer wearing an oversized jacket in the middle of summer is one to take notice of. When it comes to protecting cyber data, such as customer information, the retail industry often uses Cloud Computing to keep customer information safe. Cloud Computing also makes it easier for managers to look up customer information without having to search through various data bases to find what they are looking for. What Strategies Are Used by Today’s LP? Loss Prevention Officers are responsible for educating staff members on what to look for in customers and what to do to prevent theft from occurring. Taking a proactive approach such as greeting customers when they walk into the store or asking if you can help them find anything are easy ways to let the customer know that you are aware of their presence in the store. A customer who enters the store with the intent to steal does not want to be noticed by associates. These customers are less likely to steal something if an associate has already made contact with them. It is up to the Loss Prevention Officer or Manager to ensure that their team knows how to handle external theft and what their limitations are when potential shoplifters enter the store. During an interview with the General Manager at Company X, the researcher asked if associates could make a Citizen’s Arrest pursuant to S.494 of the Criminal Code. The General Manager told the researcher that this is against company policy as it had the potential to put not only associates in an unsafe situation but also other customers and the shoplifter as well. Protecting Company X’s high end assets by having them secure with locks and alarms will act as a deterrent, but this alone is not enough. It is important that employees are alert and aware of the customers in the store. Proper training from the Loss Prevention team will have associates trained to be aware of items that are a high risk for theft. Items such as iPads and laptops are high risk items and as such, it is important to make sure that all managers and

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employees working in the relevant departments are properly and fully trained. It is important to know how to properly secure these high end items and make sure the assets security alarms are working properly. This is essential to reducing shrink. However, these strategies alone are not enough to prevent theft as they are merely a way to buy time for associates and managers to assess the situation and determine the reason the alarm has been set off. It is also important to take note of any customers that appear to be lingering in the store, especially those who are near high end assets. Having an associate engage a customer who has been hovering around high end items can reduce the chance of theft and increase the likelihood of a sale. It is equally important for the management and sales team to communicate effectively with each other when they see suspicious customers enter their store. The more everyone works together as a team the more likely it is that potential shoplifters will be deterred from stealing. One such example of effective Loss Prevention practices at Company X occurred in early February. A group of four or five individuals walked into the store, immediately split up and went in different directions. Most of the individuals stayed near the high end items in the store while one of them moved towards low risk assets. Associates and management alike saw these individuals at the same time and were able to use effective customer service as well as the paging system and prevented a potential theft from occurring. The individuals left the store a short time after they arrived. One of these individuals made a legitimate purchase however the important thing to note is that a potential theft was thwarted because of alert associates and management.

Geography: Where is Company X Located in Proximity to Transit?

Company X is located along a busy highway with easy access to a network commuter. A 10 minute walk uphill heading east will have an individual at one sky train station. From there an individual can be in a major metropolitan community, whereas a 10 minute walk heading west will have the individual in another major metropolitan community with waterfront access to a river, harbor and inlet. Because Company X is conveniently located between two busy sky train stations, it is easy for someone to leave and end up in a different jurisdiction all together. This makes it harder for individuals to be caught because they are multi-jurisdictional and will have fast access to other businesses where more shoplifting can occur. In the example mentioned above, the potential shoplifters arrived and left on foot. Had they been able to get away with a high risk asset, they could have been in a new jurisdiction within a matter of minutes. This potential theft would have increased Company X’s shrink dollars which would then result in a higher shrink percentage.

Inventory, Shrink and Theft

At Company X inventory is done on a daily basis first thing in the morning before the store opens. This is done to determine what products are not on the shelves or walls for customers to purchase. Morning inventory is done with a small hand held scanner that tells associates what product is currently out of stock, on order or how many Company X currently has on hand. If there is stock on hand, then it is up to the associate conducting the inventory

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count to find the product and have it ready for customers to purchase when the store opens. If the product cannot be found, it may be considered shrink. Regular inventory is an ideal way to determine whether or not there is shrinkage in the store. Shrink occurs when the on hand count differs from the number of items the store system indicates there should be. For example, an associate in Company X might have to inventory HP printer toners as part of their opening duties. If the on hand, or physical, count of this item is different then what the store system says, it is considered shrink. These discrepancies can be attributed to employees, customers, accounting or administrative errors as well as vendor errors. Once a year, Company X has an annual store wide inventory. On this day an external company is brought in to do the inventory with store associates participating in a secondary count. The General Manager at Company X has stated that this inventory is not 100% accurate as the external company does not know the store the same way the associates do. Some items in the store may appear to be the exact same product just a different colour however the different colour might mean there is a different SKU for each item. This would mean that the associates and external inventory team have to count each item as if they were completely different. For example all red Lexar 64gb USB’s would be counted together and all green Lexar 64gb USB’s would be counted together because the SKU’s are different. However, a bad physical inventory of the store is better than not doing any inventory at all. Once the inventory has been completed, the store manager can get an idea as to where their store shrink is currently at. In 2015 Company X had a shrink percentage of 0.4% which falls within the standards set out by the Retail Council of Canada. However this does not mean anything by itself. Company X had $8,000,000 in sales last year which sounds like a good year however the shrink percentage still needs to be factored in. This allows the General Manager to determine how much the store lost in shrink dollars. To convert the shrink percentage to a dollar value it gets cross multiplied and divided by the store sales as shown below:

0.4 x 100 N $8,000,000

$320,000 = 100N

100 100

= $32,000

Although $32,000 doesn’t seem like a big number when compared to $8,000,000 it does show how much money Company X lost due to their 0.4% shrinkage. When broken down even further, $32,000 works out to an average of:

$2,666.66/Month

$615.38/Week $87.67/Day

This is the rough equivalent to one full time hourly associate working on the sales floor for one year. With this dollar value, it would be more effective to have another associate working on

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the floor helping customers in an effort to reduce store shrink even more. Having more associate working during peak hours allows for better customer service and a lower yearly shrink percentage. There are several ways in which shrink can be affected it all has to do with how well trained and alert associates and managers are when dealing with shop theft, or shoplifting, and internal theft. The most common type of theft in retail is internal theft however it is not limited to the physical asset. Internal theft also encompasses cyber theft. This can be carried out by associates, vendors, accounting or administrative errors and even by cleaning staff. Internal theft is responsible for the greatest increases in retail shrink. Employees who steal do so for a variety of reasons; some steal because they are disgruntled or because they are presented with an opportunity to do so. The Disgruntled employee is going to steal because they are likely mad at their employer and their logic is that stealing will be a good way to get revenge. The employee who steals when the opportunity presents itself is doing so because there is no one watching them and they seize the chance to take an asset. Some employees will be more creative in their methods and will hide items in garbage bags that are being taken out at the end of the night. To prevent this from happening, Company X uses clear garbage bags so associates cannot hide store assets in the bag. Another strategy that can be used to deter or prevent internal theft at night is to have employees show their manager the contents of the bag before it gets thrown out. This will give the manager a chance to determine whether or not there is anything hidden in the garbage. Managers can also ask employees to open the bags and dump the garbage into the garbage bins so they can see everything being thrown out. Vendor fraud and accounting errors can also contribute to shrink levels. The vendor can send an entire pallet of high risk merchandise to the store and alter the packing slips so the receiver thinks they are receiving more than they actually are. A receiver who is diligent and good at his or her job will cross reference the packing slips with the merchandise they receive and any discrepancies will be reported to both management and the vendor immediately. Accounting errors can easily occur as well, the accounting team could over charge the store for items they have received or charge them for items they did not receive at all. Fake paycheques can also be made up for nonexistent employees of the company; this would be considered cyber theft. Cyber Loss Prevention can easily occur in retail so it is important to ensure that the digital asset is well protected from both internal and external theft. Company X keeps everything on the Cloud at Home Office in an effort to keep customer and store data safe. However, associates working in the Accounting department can easily make changes to store information. Issuing fake pay cheques as mentioned above, for personal gain can easily happen and can go one for an extended period before someone notices missing money from the store budget. Employees who have access to company information at the store level can easily download and steal company data using a USB. In order to reduce the risk of this happening at the store level, Company X keeps every computer password protected in in sight of security cameras. Should there be an internal data breach, having the computers in sight of the cameras will allow the management team to review the footage to determine who may have been using the computer when the breach occurred. Data breaches can also occur externally.

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External Theft is the next reason shrink levels are often high in the retail environment. External theft is not limited to shoplifting however, it can be easy to prevent if you are aware, alert and diligent and know what to look for. When cyber theft takes place external to the company, it is because someone has hacked into the Cloud Computing system. The Information Technology (IT) and Legal teams are responsible for ensuring that company firewalls, malware, antivirus software are maintained and kept up to date. During an interview with the General Manager at Company X, the researcher inquired as to the types of the aforementioned software and was unable to get an answer. This information is not readily available at the store level and would need to be obtained via meetings with the IT and Legal teams. Unfortunately, this was not able to take place due to time constraints. However it is much easier for associates and management to prevent theft of a physical asset then it is a cyber asset. It is important to note that not all shoplifters are the same. There are three types of shoplifters to be aware of: Opportunist or Amateur shoplifter, the Shopping shoplifter and lastly the Professional shoplifter. The Opportunistic shoplifter is the most common and the one Loss Prevention Officers and security guards are most likely to detect. This individual is likely a regular customer at the store and if they have a family, they are probably the primary shopper. These shoplifters will take the first opportunity they have to steal an asset, regardless of the dollar value, if it means they can get away with it and not get caught. These opportunities will arise while the individual is actually doing legitimate shopping. The Shopping shoplifter will work in groups usually comprised of teenagers. These thefts are often carried out as a result of peer pressure. These shoplifters will go shopping for a specific item to steal, once found, they will conceal the item in their jacket or a foil lined bag in an effort to avoid detection. Although this shoplifter sounds similar to the Opportunist, they are different. The Opportunist is presented with an opportunity to steal and consequently takes advantage of it whereas the Shopping shoplifter is on a mission for a specific asset. Lastly, the Professional shoplifter is the one that contributes the most to external shrink. These individuals usually work alone however they have been known to work in pairs and use a divide and conquer strategy. One individual will distract a store employee with questions about an item they are pretending to be interested in while the other steals the target asset. The Professional is usually stealing for one of two reasons: 1) this is their only source of income and 2) they are feeding a drug habit. Regardless of what their reasons are, the Professional increases the store’s shrink percentage more than the Opportunist and the Shopping shoplifters combined. The Professional specifically targets high value assets such as iPads and laptops as they are the most valuable. However, despite these different categories of shoplifters, an individual in retail cannot tell who is and is not going to steal something based solely on appearance. Some customers can walk into a store and send up red flags to both managers and associates. Consequently this will result in staff closely watching an individual based on the way they are dressed. And yet, this customer might actually make a legitimate purchase and may have had absolutely no intentions of stealing anything. A customer who is well dressed and does not raise any suspicions, might in fact be the one that needs to be watched more closely. It is with the customers that do not raise our suspicions that we let our guard down. It is also important to ensure that all high risk assets are properly secured to reduce the chance of theft.

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Security

Although there is no specific standard for physical security in retail, there are several things retailers can do to hinder theft. Company X utilizes several security features to ensure the safety of their associates and customers and to reduce their annual shrink. Company X has several security cameras visible throughout the store laid out in a strategic manner to ensure that the most vulnerable areas are covered. Vulnerable areas of the store include high risk assets such as ink and toner, the Apple table, lap tops and tablets as well as the accessory wall which includes a wide array of items for portable devices. There is also a security camera by the staff room and public bathrooms. This camera will see everyone coming and going from these areas including those who are going into the Manager’s office and the Human Resources offices. It is important to note that the camera cannot see into the bathrooms or the staff room. This camera can also see part of the sales floor where high risk assets are located. Unfortunately Company X does have some “dummy” cameras in the store to act as a general deterrent. These dummy cameras make it harder to determine a shoplifter’s movements in the store as there will inevitably be blind spots. When asked which cameras were fake the General Manger was unable to release this information. Company X also takes advantage of a store wide alarm system which is monitored by Protectron, a local company. Company X has the alarm on various doors throughout the building especially the main doors and the shipping and receiving doors. At this particular location, there are two ways in and out of the store the first is the automatic sliding front doors and the second is an elevator between the front doors and Technology Service counter. The front doors leads out to a side walk and lower parking lot with a view of a busy highway. Neighbouring businesses across the highway are also visible. The elevator offers access to rooftop parking which anyone can use. During the day the main door and the elevator are open and unlocked so customers and associates can come and go. When the store is closed, sliding gates are pulled across the windows, doors and the elevator and locked in place. These gates and doors stay locked until the store reopens the following morning when the opening manager arrives. There are also crash guards in front of the main doors to prevent someone from attempting to drive through the doors. There are also two receiving doors at Company X, one is a large bay door that is raised several feet from the ground and can only be opened from the inside and the other is a small deliveries door. The bay door is raised to prevent someone from attempting to drive through it. From the inside, this door has two locks at the bottom that are always in place unless there is a large delivery. At night, a forklift is also parked directly in front of the bay door to act as extra security should someone attempt to break in. The small deliveries door can only be opened when a manager or supervisor deactivates an alarm and unlocks the door with a key. Like the bay door, the small deliveries door can only be opened from the inside. Every night before the closing manager leaves the store the alarm is set. When the opening manager arrives in the morning, the alarm is disarmed. During the week, Company X has a night crew comprised of two associates come in to restock the sales floor. Although the alarm is set every night, this does not affect the night crew. The alarm has a “safe mode” or a “stay” feature which enables the staff to move throughout the store without setting off the alarm. There are certain doors, such as the main door and receiving doors that are always armed however these doors are never opened at night. For safety reasons, there always needs

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to be two associates in the store at one time. The alarm company is also aware that there is a night crew in the store so if the alarm does go off, Protectron will call the store and ask for the password or pass code so the alarm can be disabled and reset. If an incorrect password is given, the alarm will not be disabled and the police and General Manager will be called to the store to ensure there has not been a break in. The alarm monitored by Protectron is not the only alarm system in the store. All high risk electronic assets are also secured with an alarm system. Should one of these assets be forcibly removed, an alarm will go off. The only way to disable the alarm is by the key holder. The key holder can be any associate or manager and often rotates in an arbitrary order throughout the day. This is used to deter shoplifters from knowing exactly which associate or manager will have the keys at any given time. Company X has two lock ups that are used to keep high end items secured, both lock ups are behind locked steel doors. The side lock up is under lock and key and the front lock up in the store is under a 4-digit code as well as lock and key. In order to get into either of these lock ups, the key holder at the time needs to open them. Only store associates have access to these lock ups and customers are never allowed inside. This particular location has an Apple table near the front of the store set up according to Apple’s security standards. However Apple’s security standard does not offer adequate protection of their devices. The cords that secure the iPads can be easily cut with a pair of safety scissors and a second cord with an adhesive sensor attached to the device can be easily taken off the back of the iPad which makes it easy for these high end items to be stolen. The alarm system that is connected to the cords and wires keeping the iPads in place has a 3-4 second lag between the time the cords are cut and removed and the time it starts going off. This lag allows a shoplifter to get approximately half way to the main exit before any associates can react in an effective manner. This lag was discovered on November when a shoplifter was able to cut the cables with a pair of scissors and run out the door with an iPad. By the time the associates and management team were able to determine the cause of the alarm going off the shoplifter was already out the doors.

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Methodology

Company X has several retail locations across Canada however for the purposes of this project the focus was on one location in Burnaby. This location was chosen for is easy access to transit, its proximity to a busy highway and the two parking lots attached to the building. This location was also chosen because of the researcher’s prior knowledge of the building and store layout This project was carried out using primary data. Research was conducted and interviews were held with the General Manager of Company X, a retail company, over a period of 7 months. Research was also gathered via Company X’s main website as well as from the company training website and by utilizing search engines such as Google. Library books were also used to gather more information on Loss Prevention and security. Used books were also purchased online to aid in finding Loss Prevention strategies and to further educate the researcher on the different categories of shoplifters.

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Results and Discussion

Effective customer service is the best deterrent for potential shoplifters. A shoplifter does not want to be bothered while they are attempting to remove an asset and they definitely do not want to be acknowledged by store associates. Addressing every customer and being attentive of those who are lingering will help lower shrink rates and keep high risk assets secure. Ensuring that all high risk assets are properly secured and alarm systems are functioning properly is essential to product security. Keeping shrink rates as low as possible allows businesses like Company X to have more staff on the sales floor at one time to provide better customer service. This will in turn allow associates and managers alike to keep high risk assets more secure. Having adequate staff on the sales floor during peak hours is one of the best security methods a company can have. Company X is a high risk location for shrink and overall, the shrink percentage is very low at only 0.4%. This percentage has the potential to be much higher, however with effective customer service and properly functioning security systems in place, we are as secure as we think we are. Since this project began in September 2015, both the General Manager at Company X and the researcher have been unable to get in touch with the Loss Prevention Manager. This has been a hindrance to this project as it has limited the number of questions the researcher has been able to get answers to. The researcher was also unable to contact the IT and Legal departments to gain knowledge on how the Cloud is kept secure in terms of antivirus, malware and firewalls. This also meant that questions in regards to procedure following a data breach went unanswered.

Conclusion In retail, effective customer service is the best way to deter individuals from shoplifting. Keeping shrink rates as low as possible will offer customers a more enjoyable shopping experience. The more staff available on the floor to help customers, the harder it is for a shoplifter to effectively steal an asset. If more staff had been available when the iPad was stolen back in November, the theft could have potentially been thwarted. Being alert and aware of all customers in the store is a powerful way to keep assets secure and customers safe. Lower shrink rates can happen if proper security is in place to deter theft and staff is properly trained in Loss Prevention.

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Appendix A: Security Checklist for Company X

This is the security checklist used by Company X on a routine basis as a proactive approach to preventing

theft inside the store

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Appendix A: Security Checklist for Company X Continued

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Appendix A: Security Checklist for Company X Continued

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Appendix B: Work Safe BC Security Checklist

The following checklist is used with permission from Work Safe BC from the

publication Preventing Violence, Robbery, and Theft: A Guide for Retail Owners, Managers, and Workers

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Appendix B: Work Safe BC Security Checklist Continued

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Appendix B: Work Safe Security Checklist Continued

The security checklist used by Work Safe BC not only covers the interior of the building but also the exterior. Part of ensuring a retail location is secure is making sure there are no potential advantages for a shoplifter. This security checklist is designed to make the asset unassailable by the shoplifter. Adequate lighting, neatly trimmed vegetation and a clean parking lot make it harder for someone to hide. Depending on the retail location, not everything in the checklist from Work Safe BC will be applicable. For example, the option of an escort to ones vehicle at night is not an option at Company X. When it is time to start closing duties, it is important that the manager on duty does not start removing tills from the cash registers until the store is clear of customers and the doors are locked. This will reduce the opportunity to steal money. It is also important to make sure the tills are counted away from the sales floor. Tills should be counted in a locked room ideally with a second associate present to ensure that the money is being counted correctly. Video surveillance should also be visibly installed to ensure the honesty of both managers and associates. This checklist also takes employee safety into account which is important when employees may be working alone during opening or closing shifts.

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Appendix C: Routine Activity Theory

As discussed above, there are several reasons as to why people shoplift however, Routine Activity Theory gives us a better understanding behind the various motivations shoplifters have.

The triangle shows us three key elements needed to commit an offence:

1) Absence of a Capable Guardian 2) Suitable Target 3) Motivated Offender

A Motivated Offender will find themselves in the same place as their target with a lack of supervision. For the purposes of this project, supervision is in the form of managers, supervisors, associates and loss prevention personnel. Each of these things plays a significant role in the amount of theft and consequently shrinkage a retail location will have.

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Appendix D: Tricks of the Trade

As mentioned in the section on “Internal Theft and Shoplifting” the Professional Shoplifter is responsible for the most shrink dollars in retail. These shoplifters use various tricks of the trade to hide their target items. These tricks include the following: 1) Clothing - Booster Jackets are jackets that have hooks and extra pockets sewn inside them to enable the shoplifter to hide merchandise without being detected - Knee-high boots are an excellent place to hide stolen assets. Shoplifters can easily hide small items in their boots and walk out of the store undetected. Pretending to adjust ones boots or jeans allows the shoplifter to discretely hide the asset without being caught. - Socks are another excellent place to hide small assets; rings, earrings and necklaces are small enough to fit inside socks without being noticed. As with the boots, the shoplifter just has to pretend to be retying their shoe laces or pulling up their socks and they can easily conceal their stolen asset. - Wearing inappropriate clothing for the season will almost immediately raise red flags with associates. Oversized jackets in summer are going to be suspicious and will draw unwanted attention to the potential shoplifter. 2) Bags - Shoplifters will line their reusable shopping bags, purses, gym bags, backpacks and more with tin foil so they can hide high risk assets in them. The foil will prevent their bags from beeping as they walk out the door without paying for the stolen asset - Carrying oversized purses or gym bags and leaving them open is another method commonly used by shoplifters. An open bag allows the shoplifter to “accidentally” conceal the asset 3) Tools - Tools such as box cutters, pliers and scissors are often used to cut cables and cords intended to secure high risk items. - Items such as iPads and tablets are often secured with cords that are hooked up to an alarm system which is supposed to go off if the asset is tampered with in some way. These cords are often very small and very easy to cut. They can be cut with a pair of safety scissors. Pliers and box cutters are just as effective at cutting these cords. 3) Earth Keys - Many high risk assets such as USB’s and Memory cards are kept in locked boxes known as Alpha Boxes - These boxes can only be opened with an Earth Magnet which can easily be found online and tutorials showing shoplifters how to open these boxes are readily available on YouTube

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Appendix D: Tricks of the Trade Continued - In retail, these magnets should always be kept behind the counters and out of sight and reach of all customers 4) Visible Cash - Carrying cash visibly in one’s hand is a distraction method shoplifters like to use when talking to a store associate. The visible cash is meant to distract the associate just enough to allow the shoplifter to sneak a small item into their bag. 5) Divide and Conquer/Tag Team - This is commonly used by the Shopping Shoplifter - One member of the group will distract a store associate near a high risk asset while the other attempts to disengage the asset without drawing unwanted attention.

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Appendix E: Company X Trespass Notice

*Parts of the Trespass Notice have been redacted in an effort to keep Company X anonymous

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Appendix E: Company X Trespass Notice Continued

The Trespass Notice is given to customers to are caught shoplifting in Company X. Every

time a shoplifter has been identified, the incident is reported to the local RCMP and a Trespass

Notice is filled out. One copy will be given to the shoplifter, another to the RCMP so it can be

logged with a case number and one is kept in store with a copy of the RCMP case number.

Should this notice be violated, it is up to the management team to notify the RCMP.

According to the General Manager at Company X, a different team of Constables arrive

at the store each time the RCMP is called for a shoplifting incident. The Manager on Duty at the

time of the incident is also responsible for sending out an email to all of the stores in the district

and neighbouring districts as well as to the District Manager and the Loss Prevention Manager.

This email will contain a detailed description of the shoplifter; pictures from security cameras

will be included if possible, as well as a description of the incident that took place. Pictures of

the shoplifter, as well as the email sent out, are printed off and attached to the Loss Prevention

board located in the staff room at Company X. This allows every associate in the store to

become educated on the incident.

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Appendix F: Security Devices Used in Retail

Alpha Box:

Alpha Boxes are used to secure memory cards, USB’s

and other high risk items. Company X will occasionally photo copy high risk assets and put the photocopied image

of the asset in the box as a method of reducing shrink. These boxes can only be opened with an Earth Magnet or an Alpha Key.

When these boxes are placed on or near the demagnetizing strip at the cash register, it will begin beeping and will

continue to do so until the asset has been properly removed.

Locking Peg:

Like Alpha Boxes, these locking pegs can only be opened using an Earth Magnet or Alpha Key. Once the peg has been

hooked onto the wall, it will be secured in place with a built in magnet. Assets can only be put on or removed

from the peg with an Earth Magnet or an Alpha Key.

Loss Prevention Strategies 28

Appendix F: Security Devices used in Retail Continued

Spider Wrap:

As with the Alpha Box and Locking Peg,

the spider wrap can only be unlocked with an Earth Magnet or an Alpha Key. When this alarm is placed on

or near the demagnetizing strip at the cash register, it will begin to beep and will continue to do so until

the wrap has been properly removed from the asset.

Electronic Article Security (EAS) Tags:

These are two different examples of EAS Tags. The one on the left has an adhesive backing and can easily be hidden inside

an asset. The one on the right will be more visible and is most commonly found attached to an article of clothing. When

placed on or near a demagnetizing sensor at a cash register, the item will beep once to signal that it has been demagnetized. These can

be re-magnetized using an Earth Magnet.

Loss Prevention Strategies 29

Appendix F: Security Devices used in Retail Continued

Alpha Keys:

Alpha Keys are used to open Alpha Boxes, Spider Wraps and Locking Pegs. These should be kept out of sight and

reach of all customers to avoid shrinkage.

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Appendix G: The Art of War

The Art of War by Sun Tzu is a 2500 year old book on military strategy however it can be

interpreted many different ways and applied to almost any situation or industry including retail.

“Rely not on the likelihood of the enemy not coming, but on our own readiness to receive him; not on the chance of his not attacking, but rather on the fact that we have made our position unassailable”

This quote can be interpreted several different ways however when applied to retail, the

“enemy” is the shoplifter. The shoplifter will always show up in a store so it is up to the

managers, supervisors and associates to be fully prepared for all three types of shoplifters

previously discussed. It is inevitable that the shoplifter will zero in on their target asset. It is vital

that retail team ensure their high risk assets are as difficult to get to as possible. Having an

associate located near high risk assets and making sure every associate on the floor is

acknowledging all customers as they enter the store is essential in ensuring the assets are safe

and secure.

Loss Prevention Strategies 31

Appendix H: Definitions

1) Loss Prevention: Loss Prevention is a proactive “concept of establishing policies and

procedures” as well as business practices to “focus on preventing incidents before they

happen” within a retail environment. (www.lpinnovations.com,

www.losspreventionfoundation.org)

2) Theft: As defined by the Criminal Code of Canada 2016:

S.322(1) “Everyone who commits theft fraudulently and without colour of right takes, or fraudulently and without colour of right converts to his use or to the use of another person, anything, whether animate or inanimate, with intent

(a) to deprive, temporarily or absolutely, the owner of it, or a person who has a special property or interest in it, of the thing or of his property or interest in it”

3) Internal Theft: Anyone who works for a company including, associates, supervisors,

managers on duty as well as Home Office employees, who unlawfully and without prior

permission, remove Company assets such as merchandise, company property and

money.

4) External Theft: Theft that occurs from sources outside the company including robbery,

break-ins and shoplifting.

5) Shrink: Inventory that is lost or stolen as a result of internal or external factors such as

theft and shoplifting, vendor fraud or being misplaced within the retail environment.

(www.smallbusiness.chron.com/retail-shrinkage)

6) Cloud: The cloud is a “network of servers” each of which serves a “different function”

(http://mashable.com/2013/08/26/what-is-the-cloud/#OOkd7xbqbkqF)

7) Cloud Computing: The ability to keep and access your “data and programs” on a remote

server rather than on your computer’s internal hard drive. (www.pcm.mag.com)

8) Cloud Storage: This is a way of using “a hard drive” to store your data over the internet

using Google Drive, Dropbox and other mediums such as these. In other words, Cloud

Storage will store your data. (http://www.gadgetreview.com/cloud-storage-vs-cloud-

computing-which-are-you-using)

9) Data Breach: An incident involving the prohibited and “unauthorized viewing, access or

retrieval of data.” (www.techopedia.com/definiton/13601/data-breach)

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Appendix H: Definitions Contiued

10) Cyber Crime: “criminal activity that involves the Internet, a computer system, or

computer technology” (http://dictionary.reference.com/browse/cybercrime)

11) Citizen’s Arrest: As Defined by the Criminal Code of Canada 2016:

S.494(1) Any person may arrest without a warrant (a) a person whom he finds committing an indictable ofence or; (b) a person who, on reasonable grounds, he believes (i) has committed a criminal offence and (ii) is escaping from and freshly pursued by persons who have lawful authority to arrest that person

Loss Prevention Strategies 33

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solutions/spider-wraps/spider-wrap/

Cloud Storage vs. Cloud Computing: Which Are You Using? (n.d.). Retrieved from

http://www.gadgetreview.com/cloud-storage-vs-cloud-computing-which-are-you-using

Criminal Code of Canada, RSC 1985, S.322(1), S.322 (1)(a) Criminal Code of Canada, RSC 1958, S.494(1), S.494(1)(a), S.494 (1)(b)(i)(ii) Cybercrime | Define Cybercrime. (n.d.). Retrieved from http://dictionary.reference.com/browse/cybercrime Ellis, Jr., R. C., & Stipanuk, D. M. (1999). Security and Loss Prevention Management (2nd ed.). Lansing, MI. Fee, J. The Beginners Guide to the Cloud. August 26, 2013. Retrieved from http://mashable.com/2013/08/26/what-is-the-cloud/#OOkd7xbqbkqF Fennelly, L. J. (1997). Effective Physical Security (2nd ed.). Newton, MA: Butterworth-Heinemann Publications. Fennelly, L. J. (2004). Handbook of Loss Prevention and Crime Prevention (4th ed.). Burlington, MA: Butterworth-Heinemann Publications. Geographic Profiling Analysis: The Geography of Crime. (n.d.). FSCT 8303: Geographic Profiling 1. Vancouver, BC: BCIT. Giles, L. (1910). The Art of War. Harrisburg, PA: Dover Publications. Griffith, E. What is Cloud Computing, April 15, 2015. Retrieved from www.pcmag.com/article2/0,2817,2372163,00.asp Hayes, CPP, R. (1991). Retail Security and Loss Prevention. Stoneham, MA: Butterworth-Heinemann Publications. Hollinger, Richard C., Davis, Jason L. (2002) National Retail Security Survey Final Report. University of Florida, Gainesville Florida. Retrieved from http://www.pitnet.com/nrss_2002.pdf

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