The document discusses future trends in retail security and loss prevention. It notes that theft accounts for 72% of retail shrinkage, with employee theft being the largest source. To reduce losses, the document recommends investing in security measures like CCTV, electronic tagging, and staff training. It also advocates for developing loss prevention partnerships between retailers and law enforcement to share intelligence on crime trends. The overall message is that loss prevention requires a strategic, multifaceted approach that addresses theft deterrence, process improvements, and organizational compliance.

1. FUTURE OF RETAIL SECURITY
By Harold Ritcher

2. Let’s talk security

3. Retail Security to Loss Prevention
My 24 years of Security experience has taught me one
fundamental thought and application process…
“SECURITY IS NOT A DEMOCRACY”…
however, protecting a retail corporation’s
assets was a role seen primarily as a
policing one & was judged by the
number of arrests made.
The emphasis increasingly has changed towards the prevention &
deterrence of offending, and much less upon apprehension of
thieves.

4. 2012/2013
National Economic Survey
growth registered by
wholesale & retail sector this
being the second most
important economic driver in
Kenya, beating the
manufacturing, building and
construction, agriculture,
transport and communication
sectors.
7.3%

5. Sources of Retail Shrinkage - KENYA
Retail crime statistics 2012 by Synovate:
Employee Theft Statistics Percent
Percent of total thefts committed by a manager 37.1 %
Percent of total thefts by an employee who had ideas stolen at work 29 %
Average time office fraud lasts before detected 2 years
Retail employees arrested for workplace theft 1 in 30
Sources of Inventory Shrinkage in Retail Percent
Employee Theft 42.7 %
Shoplifting 35.6 %
Administrative Error 15.4 %
Vendor Fraud 3.7 %
Unknown 3.9 %

6. Retail Crime
 THEFT from business is identified as the number 1 cause of
LOSS in the retail sector to date.
 There is no single Government agency leading the area in the
prevention of these losses.
 THEFT is a major problem for retailers and it is at times
perceived as a “victimless crime” or a “loss of doing business.”
 CRIME losses, and the demand for safety, are increasing with
volume increases.
 Overall loss totals are going up because sales revenue
numbers are increasing.

7. Why theft & why me?
 The complex explanations of theft & loss are many, & often not well
understood among ground level practitioners.
 Loss problems have always been a function of demand, supply and the
“plumbing” that connect the two.
 Greedy demand for basic & luxury items by consumers & commercial buyers
as well as opportunistic, ad-hoc & illicit supply chains are fed by vulnerable
supply chains and stores, manned by a number of ill equipped, corruptible &
incompetent staff.
However, not all is lost, what we now know is helpful for devising a formalised
approach to Crime & Loss Control.
Credible scholarly work has been done on the broad understanding of crime and
it’s causes and the possible resolution/reduction thereof.
Interaction between retail business owners and loss control adjustors are
paramount in wanting to combat crime and reducing losses.

8. Emerging Organised Syndicates
If you are a shopper in Nairobi and walk into any or most supermarkets, you will
notice something:
Baby milk is stored in a glass cabinet, under lock & key…and the key is in
the custody of one employee!
 These security measures by retail outlets are as a result of increased cases of
operational losses occasioned by shoplifting and general theft.
 The loss control (shrinkage) industry players fear that it is a case of emerging
organised pilferage ring/s targeting local supermarkets.
 Market research company, proved that local retailers are losing more than
1.5% of turnover due to increased cases of shoplifting & theft of stock.
 These syndicates are targeting high value products such as electronics,
furniture items, baby food products, cosmetics & general food items.

9. Global Retail Theft Barometer (GRTB)
200
billion
Kenya’s formal retail trade market worth
3
billion
Annual losses from pilferage
$119
billion
Global shrinkage to internal system errors
The study covered
1187 global retailers
in 43 countries.

10. Global Retail Theft Barometer (GRTB)
 What we previously thought to be small time cases of shoplifting has
unfortunately evolved to become large scale organised crime, leading to high
shrinkage rates on the stockholders.
 Conventional in store policing measures are not helping – review of existing
laws , company policies and procedures is a necessity.
1.45%
1.36%
6.6% global shrinkage rate

11. Simple…
Why do
shoplifters, staff
and syndicates
steal??
because they can!

12. Focus Points
The lack or control of policies, systems and procedures and or the poor supervision
thereof, are the main contributing factors why staff are able to steal specific company
assets.
It is not necessary for you to try and differentiate between these areas. All 3 focus points
should receive the same amount of attention. It is recommended that you consult or
appoint a specialist in loss prevention & physical risk management that can focus on the
areas mentioned above
Theft
Activities
Security
Matters
Loss
Control
Matter
3 Key
Areas Of
Focus

13. How To Deal With Shrinkage
What actions to be considered & what are the focus points?
1. Recruitment process – Sourcing, aptitude tests & integrity
polygraph tests.
2. Employment contract- stipulate in the employment contract that
the company will conduct random polygraph tests.
3. Retail Training – empower staff with the proper knowledge & skills
for efficiency, optimisation and better LP awareness.
4. Key position appointments – are areas of high risk where the
movement of stock is independently monitored (record & report).
5. CCTV – installation of overt/covert cameras at strategic points is
essential.
6. Control Room – cameras are obsolete without the full use of a
dedicated/remote control room and operator.

14. How To Deal With Shrinkage
(continued)
7. Business Intelligence – the placement and infiltration of “Undercover
agents” within the workforce to provide ongoing detailed information
on all forms of irregularities, are ever more eminent.
8. Stock take – regular (monthly, quarterly, bi-yearly) independent stock
takes must be conducted.
9. Loss/systems control officer – is key & is essential to ensure that
controls, systems and policies are implemented and adhered to.
10. Loss prevention/compliance audits - to ensure that all employees,
stores & depots apply themselves consistently and adheres to
company loss prevention policy & procedures.
11. Electronic tagging and RFID – Radio-frequency identification devices
are electronic tags capable of carrying more data that have a wide
range of applications in the retail sector, including loss prevention.

15. Apprehending thieves, processing them and handing them to
the police(inevitably involving court appearances) is extremely
expensive & often costs more than the merchandise recovered
when a thief is caught.
Loss prevention specialists certainly patrol the stores &
investigate suspicious behaviour, but loss prevention also
includes preparing improved procedures, conformity with
company loss prevention policies, training of staff, analysing
loss to mitigate actual/potential losses caused by error or
procedural failures and help develop new policies for the
changing pattern of retail losses.
How To Deal With Shrinkage
(continued)

16. Summary & Conclusion
1. Loss Prevention (LP) is wide in scope – There is a wide variety of targets for
crime & fraud in retail, so LP has to take a strategic view and work on inhibiting
theft in multiple different areas.
2. Theft = 72% of Shrinkage – so alleviating shoplifting and staff theft should do
most to reduce losses.
3. “Paper” shrinkage/procedural error – accounts for an average of 16.2% of
shrinkage. Poorly designed processes, weak supervision and poor training &
errors are main contributors.
4. Investment in LP – plays a major part on reducing shrinkage.
5. Relationships – LP officer’s role is to work with other parts of the business by
developing joint methods of shrinkage analysis & controls by means of LP
electronic surveillance data & RFID etc.
6. LP partnerships – to be established with other retailers, organisations & law
enforcement as one can learn more about crime movement & trends in a
region and information can be exchanged to combat loss.

17. Summary & Conclusion
8. Refund Fraud – growing problem of both shoplifting & customer theft
based on abuse of company procedures. LP needs to give higher priority to
developing better procedures.
9. Organised Retail Crime – is a major concern and retailers need to set up
internal teams to assess the scale of the problem & produce appropriate
solutions, work together with other retailers, law enforcement and
organisations like RETRAK
10. Cargo theft & distribution fraud – growing and a costly problem which
involves organised syndicates
11. New recruits – employers must establish that new employees are not a
new source of loss. (Pre-employment polygraph tests to be implemented).
12. LP policy & compliance – should become a standard element of the
business. Regular robust compliance & procedures audits is vital.

18. Questions?
Harold Ritcher
Hipora Business Solutions
Tel: 0202 514 781 / 0715 346 746
Cell: +254 732 55 1114
Email: harold.richter@hiporabsea.com
Website: www.hiporabsea.com
Thank you!