OPINION: Tim O’Callaghan on retail theft

Tim O’Callaghan is a partner in Druces LLP, specialising in advice to the fashion and luxury goods business. In this month’s column, he talks about how lingerie retailers can protect themselves from theft

Intimate apparel retailers will have been alarmed to find in a recent report by the British Retail Consortium that 2013 saw the highest level of retail theft in nine years.

The form that retail theft takes is changing. Traditional shoplifting is giving way to cyber-crime and, in the case of increasingly luxurious (and expensive) intimate apparel – to raids by organised crime gangs – perhaps the only occasion on which a lingerie brand may see its hosiery worn not on the legs, but on the face – of the criminal gang-members.

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Theft will always be a fact of life, but what, if anything, can intimate apparel retailers do to protect themselves?

Shoplifting

Many security firms offer advice on preventing shoplifting, and the main piece of advice they offer is to hire a reputed security firm. This option is not always economically appropriate, or conducive to customers buying intimate apparel.
In addition, these businesses consult on security issues and offer the following tips on how to spot shoplifters:

Watch out for customers who:
Avoid eye contact;
Appear nervous;
Wander the shop without buying;
Repeatedly leave and return to the shop;
Linger in locations that staff have difficulties monitoring;
Keep an eye on store employees;
Behave in other suspicious ways.

Other practical measures are to have CCTV cameras filming the shop floor, with signs notifying shoppers that they are being filmed and a further sign stating that shoplifters will be prosecuted. These security features may well jar with the boudoir image of your retail space but they may save you money in preventing shoplifting.

So what should your sales assistants do if they actually catch someone shoplifting? The police advise shop assistants not to try to physically apprehend anyone they think is guilty of shoplifting. The results could be dangerous. They do, however, advise giving the person the opportunity of paying for the item that they ‘forgot’ to pay for and if that does not work, of getting a colleague to call the police.

Theft by staff

The most disheartening form of theft to suffer is theft by your own staff. For many retailers, alas, employee theft is more prevalent that shoplifting. No amount of contractual clauses in an employee’s contract can prevent it. If caught, employees should know that it may result in the employee’s immediate dismissal without notice. As with shoplifting, there are various common-sense measures that can help intimate apparel retailers minimise the risk of employee theft.

The first measure is to recruit staff who are trustworthy. This can be easier said than done, but following up references on potential candidates is a must in any recruitment process. You should also monitor staff, both by CCTV and unannounced visits to the shop to check up on things. Staff should know that they are being monitored and a clause should be drafted into their contracts to explain this.

In the very unpleasant instance of knowing or strongly suspecting that a member of staff has been stealing from you, it is important, even if the evidence appears to you to be overwhelming, to go through a proper disciplinary process with the employee. If you don’t, you risk being at the wrong end of an unfair dismissal claim.

The best way to handle such a situation would be to suspend the employee on full pay while you undertake some more investigation into the incident.

Retail fraud

Retail fraud can vary from ‘wardrobing’ (the process of wearing an outfit once and then returning it with the label still attached to purchases), to using a stolen credit card.

In respect of wardrobing, retailers might take a leaf out of Bloomingdales book. The American retailer was so fed up with women ‘wardrobing’ that they attached a very conspicuous black tag to all of their garments. If the ‘wardrober’ removes the tag they are not able to return the garment.

Purchases made with stolen credit cards are another problem. As many retailers have found, the customer whose card was stolen will most likely be recompensed by the credit card company.

The only loser in this situation tends is the retailer, as the credit card provider may reverse the transaction, leaving the retailer without either the goods or payment. Insurances can be obtained to protect retailers in such situations, but the best advice is to ask the customer for I.D or to call the credit-card company. All of which can be rather awkward at the point of sale, but as many retailers have discovered over the last year; there are few things as awkward as losing money to theft.

 

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