Two scenes from the retail front lines:
Organized gangs in Washington, D.C., dash out of stores with carts loaded with Tide detergent bottles, which they resell on eBay or at flea markets, or trade for drugs.
In Orlando, Fla., retail employees are caught trying to load a shipment of iPods into a U-Haul van.
Such problems are spreading fast. Nearly 95 percent of retailers were ripped off last year, up from 90 percent a year earlier, according to the National Retail Federation (NRF), a Washington, D.C., trade association. And it isn’t just shoplifters. More than 44 percent of thieves are employees, according to the 2011 Global Retail Theft Barometer study by security giant Checkpoint Systems. The study estimates that American retailers lost nearly $42 billion to theft last year, up 6 percent from 2010.
What can small retailers do to keep their stores secure on a budget? Here is a rundown of some of the tech tools available, along with approximate costs:
- Store alarms. In frequently targeted stores, such as pharmacies and apparel shops, and in high-crime neighborhoods, reliable alarm systems are the first step to reducing theft, notes Joe LaRocca, senior asset protection advisor at the NRF. Today’s alarm systems come in wired and wireless models and range in cost from a few hundred dollars into the thousands, depending on the sophistication.
- Security cables, lockboxes and cabinets. For most stores, only a small percentage of items will be thieves’ prime targets. For such products, retailers can use small lockboxes, bicycle cable locks or adjustable “spider wrap” locking devices that prevent packages from being opened in the store, says Bill Beatty, senior director of product management at Alpha, a Charlotte, N.C.-based division of Checkpoint. Locked cabinets are a common solution for some high-theft items, including videogames and razorblades. Prices for these deterrents vary depending on the size and number of items secured. Lockboxes range from $2.25 to $10 apiece, and spider wraps typically cost about $8 apiece.
- Closed-circuit cameras. Some retailers install cheap, dummy cameras simply for deterrence, but if you don’t have videotape with a timestamp, prosecuting a suspected thief will be more difficult. ZZZ Pawn Shop in Spanish Fork, Utah, learned the value of video with this footage of a thief the owner was able to catch and prosecute. High-quality systems combine a door alarm and motion-activated cameras with fisheye lenses to capture the action throughout the store.
Basic setups for a small store are $200, while a full system that monitors every inch of a larger store can run $4,000 to $8,000, Beatty says. "This is a terrific first line of defense. Sometimes a nice little flashing LED light on a camera is all it takes."
- Radio-frequency identification (RFID) tags. Familiar doorway scanners and merchandise tags provide a visible deterrent, but some thieves have learned how to defeat RFID tags, LaRocca says. More advanced tags contain exploding dye and/or a built-in alarm, which continues to sound no matter where the thief goes. Beatty says installing such a system can run $4,000, plus hundreds more for tags.
- Inventory-tracking software. Thieves frequent returns counters, hoping to get the full retail value for their stolen item instead of pennies on the dollar by reselling it. LaRocca says sophisticated tracking software can identify thieves who are making bogus returns. But a store’s existing inventory software could do the job if it can track returns by customer and item.
- Plant DNA. Imagine that as a thief leaves your store, he is sprayed with a unique, engineered plant DNA that won’t wear off for a month. This isn’t a futuristic scenario, but a new crime-fighting tool from Applied DNA Sciences of Stony Brook, N.Y. Its plant spray has been set to explode inside purloined cash boxes and embedded into textiles. It also is available as a button-triggered doorway spray.
Pharmacy owner Don Cantalino of Uniondale Chemists and Surgical Supply in Uniondale, N.Y., purchased the doorway system in February for one of his four stores. The system costs roughly $2,000 to install and $1,000 to maintain annually, says Cantalino, who was motivated by the increasing violence of thieves addicted to OxyContin. "I’m going to use every piece of technology at my disposal to keep my employees and patients safe," he says.
- Transmitters in products. Some retailers are putting small radio transmitters in their merchandise to help police track thieves. Cantalino, for example, has a fake bottle of OxyContin that contains a transmitter. "It’s a LoJack device for thieves," he says. Some product makers are providing the bottles as they battle counterfeiters and thieves.
Whichever technology you use, remember to thoroughly train employees to use it, LaRocca says. "Your people are your very best resource in protecting merchandise."
The author is an Entrepreneur contributor. The opinions expressed are those of the writer.