Beware Holiday Theft

Beware Holiday Theft

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Beyond the sharp increase in your retail sales numbers and the general holiday happiness in the air, you may want to keep one eye out for trouble in these last two months of the year.

Retail theft is on the rise. Despite all the closed-circuit television cameras, and other high tech surveillance and security equipment, retailers continue to wage a losing battle against shoplifters. This according to a leading loss prevention and inventory shrinkage control consulting firm – Jack L. Hayes International Inc. A recent report they released dubbed Retail Theft Survey adds that there is an even more worrisome concern to retailers when it comes to theft – the growing threat posed by dishonest employees.

The survey found that the number of employees caught stealing in 2005 rose to 68,994, an increase of 11.4 percent over the previous year. Thankfully, over $49.9 million was recovered as a result of those apprehensions, an increase of 17.8 percent over 2004.

The report added that among 24 major retailers surveyed, representing 13,313 stores nationwide with combined 2005 annual sales that topped $519 billion, a staggering $5.8 billion was lost to shoplifters and employee theft.

Yet another concern is the increase in the theft around holiday gift cards. Gift cards have become more popular than ever among shoppers with the philosophy being they are flexible and more personal than cash. Apparently criminals feel the same way as they are stealing blank cards and selling them online or tampering with them on in-store sales racks, leaving gift recipients at the checkout counter with a worthless piece of plastic and retailers left with a lose/lose predicament.

Gift card scams are a new form of fraud that is taking its toll on retailers that feel the cards are a great way to increase sales, bring in first-time shoppers and build brand loyalty. According to the National Retail Federation, gift card sales make up about 4 percent of the $435 billion in holiday spending nationally and touch every type of retailer imaginable. More than two-thirds of the consumers the group surveyed said they planned to purchase at least one gift card for the holidays, making up about 16 percent of the average consumer’s holiday gift budget.

The two most common scams involving the cards are the theft of them directly from the stores and then selling them online below face value to buyers who think they’re getting a bargain and the buying of the gift cards using stolen credit cards or counterfeit checks as a way of shifting to a less traceable form of payment.

Yet another, less prevalent scam involves packages that have a bar code printed on the card and the package. The shoplifter takes the card out of its package and pockets it while putting a mismatched card in its place. The thief then waits for a customer to buy the package that has been tampered with. The store activates the number on the package, validating the card in the thief’s pocket. By the time the customer realizes he or she has an invalid card, the stolen card has already been used.

Keep these unfortunate statistics and scams in mind as your holiday cash registers begin ringing this season. While sales will undoubtedly be on the rise, so too will the potential for theft in a variety of forms. With regard to the gift card scams, you can begin by discouraging your customers from buying gift cards online. As for the other elements in this sorted tale, we are told awareness that criminals are always lurking is a great first step. “Just staying on your toes is a great way to battle retail theft,” began retail analysts Martha Refik. “The number one thing many thieves count on is the element of surprise and unpreparedness. Don’t open those doors.”

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