Last year, according to the National Retail Security Survey, inventory shrinkage—a combination of employee theft, shoplifting, vendor fraud, and administrative error—cost U.S. retailers more than $31 billion. It remains by far the largest category of larceny in the United States, more costly than car theft, bank robbery, and household burglary combined. Though in amusement parks and other gated attractions shoplifting is slightly less of a problem, many facility managers struggle with ways to combat it. Loss caused by shoplifting is twofold. The most desirable items to steal are also the most desirable items to purchase: CDs, jewelry, and other popular items. A retail outlet has to weigh the benefit of stocking these items versus the ostensible loss caused by having those items stolen; stores often prefigure loss when pricing an item. The surest way to prevent theft is to simply not stock the item; unfortunately, this is also a sure way to prevent a sale.

A Spontaneous Proposition
According to Karen Tryman, director of merchandise for Baker Leisure Group, “If you’re selling anything that’s ‘hot,’ people will want to steal it. I’d rather see merchants do all they can to minimize shrinkage, and keep sales at a high level.” She also points out that retail shrinkage is most definitely a venue-specific affair. “In general,” she says, “the problem of shoplifting in the traditional retail industry is more severe than at gated attractions.”

According to Tryman, there are a variety of reasons for this, the most obvious one being that gated attractions aren’t ideal targets for shoplifters. People tend not to pay a $50 entrance fee to steal a $30 T-shirt. Also, it is more difficult to make a swift getaway at larger amusement facilities: through the park, past the front gate, into the parking lot, past the parking gate... The opportunities for getting caught are too high. Also, Tryman points out, the type of guests at many parks, families with young children, often precludes it.

Nonetheless, shoplifting at amusement facilities is still an issue. Because of the nature of a gated attraction, it remains mostly a spontaneous proposition. That is, the would-be shoplifter comes to a park not necessarily planning to steal anything, notices an opportunity, and seizes it. For this reason, it is important to have safeguards in place that prevent the would-be thief. Something as simple as putting a rack of sunglasses or jewelry in the middle of the store instead of by the entrance can prevent shrinkage loss.

An Ounce of Prevention
Choices for combating theft are usually based on their financial merit: i.e., will the prevention measure improve the bottom line in the long run? Facilities should weigh the cost of setting up a program versus shrinkage, keeping in mind that many insurance companies, with evidence of added shrinkage control systems, will actually lower their premiums.

There are a number of devices—surveillance cameras, two-way mirrors, security tags (those cumbersome plastic tags on clothing, or paper-clip-sized source tags hidden inside an actual product or product package)—thatcan help catch shoplifters once the crime is committed. “Many parks use undercover people, private investigators, to work in departments as employees,” Tryman says. “In addition, some parksuse Sensormatic tags. But both of these are very expensive propositions.”

The cheaper option? Shrinkage experts agree that prevention begins with the design of a retail facility, where the cash register is placed, and where high-demand items are showcased. Some basics: Make sure the cash register is situated by the door. The store clerk can be both host and a cashier, and will be aware of who has come into the store and who has left. Be sure that small (easily pocketable) items are located near the cash register or a counter that is overseen by an employee, not off in a corner where someone can easily steal them. Be aware of blind spots. Design the facility so the clerk has an unimpeded view of aisles. Position elaborate or unwieldy merchandise displays where they won’t provide easy cover, and place mirrors in corners to give a full perspective of the store. At indoor and outdoor food stands, make sure that lines are configured so that patrons picking up food are in view of the cashier. Food areas should be laid out so that it’s clear where guests are to pay for food.

Inventory controls are an important component in shrinkage prevention. While knowing what’s being stolen won’t fight shoplifting directly, it can give managers an idea of where it is occurring. Once this is determined, then equipment, undercover personnel, and other methods can be intelligently installed to eliminate the problem.

Proper staff training is also important. Many seminars and training videos are available from IAAPA and other outlets. Employees should be aware of the myriad methods of shoplifting and internal theft, as well as know strategies that can deter shoplifters, and details of what they should (and shouldn’t) do if they see shoplifting going on. (See sidebar at end of this article.)

Kent Reed, senior operations manager of Dollywood, says that preventing shoplifting begins with making sure employees are invested in their workplace. Management at Dollywood works on a bonus program based onstore profits, and shrinkage is a part of that. Reed adds that his park had some of the lowest shrinkage in its history. “We were well below our budgeted shrinkage this year,” he says.

He gives credit to the management team at Dollywood. “I had never seen people operate shops like they were their own, but that’s how they do here. Our team leaders are very conscientious about where products are placed,” he says. “They recognize what the high-theft items are and make sure these items aren’t in places where they can be easily stolen.”

This is especially important at a park like Dollywood, which has retail facilities that stock very high-end items, such as leather coats, custom-made jewelry, saddles, and grandfather clocks that can sell for as much as $15,000.

Keep in mind that shoplifting is not a crime until the shoplifter leaves the store. Because of this, the most diplomatic way to deal with it, without causing a scene, is to intervene quickly inside the store. If a clerk witnesses someone stash away an item, the clerk should approach the stasher and ask something like, “Would you like to pay for that now?” or “Would you like me to hold that for you until you’re ready to check out?” “One of the best deterrents is to have a salesperson walk up to someone who they suspect could be a shoplifter and ask if the person needs help,” Tryman says. “It usually drives the shoplifter out of the store.”

“By and large,” she continues, “external theft at amusement facilities is more spur-of-the-moment. Internal theft is the biggest, most significant shrinkage factor in parks.”

From the Inside
It is true that, outside the retail world, when shrinkage is discussed, most people think that the main culprit is someone walking into a store, picking up an item, and leaving without paying for it. But, especially at gated attractions, this is simply not the case. Year in and year out, employee theft accounts for nearly half of the billions of dollars lost to shrinkage in the retail industry (with shoplifting accounting for just over 30 percent). The disparity between internal theft and shoplifting is even higher at amusement parks. And while shoplifting, for the most part, takes place on a known playing field (inside a retail facility), employee theft can be more difficult to combat.

Tryman points to over-ringing schemes, keeping a private till, groups of employees stealing stock, even collecting pay for fictitious employees (clocking in under a made-up name and cashing the checks). “People can be very sophisticated,” she says, “when it comes to figuring out ways to fleece their employers.”

There are point-of-sale data mining systems that detect potential theft problems at the cash register and alert appropriate personnel immediately. These systems can be integrated with digital video recorders to provide crisp, clear images of who sold what to whom with a click of a button and can be delivered to any location around the world. Waldameer Park in Erie, Pa., recently installed a GE Kalatel security system for its games counters, after it found out that games employees were stealing from the park.

And while the presence of a video camera is often deterrent enough for would-be thieves, some facilities will find the costs of such systems prohibitive. Not only are there start-up costs on the hardware and software, but someone also has to monitor these systems.

Other, less technologically advanced options do exist, such as undercover employees, anonymous tip lines, which both Waldameer and Dollywood have also recently implemented. Says Tryman, “Anonymous tip lines with rewards work because people don’t want to be seen as snitches.”
Hey, here’s a novel hypothesis: Employees who are treated well will be less likely to steal from their employer. It is vital to develop a work environment that promotes interdepartmental communication, one that makes employees feel that they are a respected and important part of the operation.

“I believe a positive management style—that is, managers being aware of what their employees are feeling—will help prevent theft,” says Tryman. “One of the most important ways a facility can prevent theft,” she says, “is to make sure employees are always part of the process. It may sound Pollyanna-ish, but good management goes a long way toward stemming internal shrinkage. If employees are disaffected or disgruntled, if there is an Us versus Them attitude among them, I believe that they will feel less loyalty toward management.”

Coda
Shrinkage is not a victimless crime. It harms retailers and businesses, and it also harms consumers, who are penalized the most, in the form of higher prices. An average family of four will be forced to spend more than $500 this year in higher prices because of inventory theft. And because thieves also generally target hot-selling items, they are often out of stock when a paying customer comes along to buy them.