Industry Insiders Discuss Pain Points Around Theft

Organizations constantly struggle to protect their assets in today's competitive business landscape. Theft is a pervasive issue that causes significant financial losses and remains challenging for many businesses.

Craig Webb is president of Webb Analytics, a consulting and research company that recently hosted a webinar with industry experts to talk through industry pain points and solutions. The panel included Nathan Loman, president and co-owner of Watcher Total Protection, Kate Borroni with Woodson Lumber in Central Texas, and Jeff Saunders with Cascade Home Center in Dallas, Oregon. The four panelists had over 100 years of combined industry experience.

The impact of theft on small to medium-sized businesses

Craig referenced a recent survey by the National Retail Federation, which conducted interviews with over 122 brands that revealed some pretty shocking stats about theft within the industry. According to the data in 2022, shoplifters were more aggressive in 2002 than in 2021 and organized retail crime increased. CVS-style brands represented 13% of companies that reported losing 3% of revenue due to theft. Brands that lost 1% or less were clothing establishments with more on-premise security.

As an owner of a security firm dedicated to aiding businesses against theft, Nathan serves over 10,000 hardware, lumber, and garden businesses nationwide. He has seen just about every way thieves are attacking businesses. “Most stores are reporting an increase in theft, with the economy wearing on people and them becoming desperate,” Lohman said. “It’s not a one-size-fits-all issue. We are seeing thieves target a group of stores and hit them all. They look for the path of least resistance. They chose the store based on stakeouts where they check the lighting quality and staff attentiveness.”

Jeff pinpoints a healthy camera system as the best safeguard against theft. "With our camera system, we're able to follow people around, communicating with associates on radio to let them know what's going on," he said. Jeff said he has over 20 cameras in his 6,000 sq. ft. store.

Nathan recommends having between eight and 16 cameras for stores under 6,000 sq. ft., 16 to 24 cameras for building sizes between 10 and 15,000 sq. ft., and over 32 cameras for anything over 20,000 sq. ft. He references the necessity of cameras not only for theft but also to safeguard against workers comp claims toward accidents and injuries.

Tackling employee theft with tech

Nate sees a world where security systems and point-of-sales or ERPs will be synched.

“ECI is one of our integrating partners; the data from the register is sent to the camera system, making it searchable,” he said. “If you have fraudulent situations, you can pull up the transactions by the transaction number." This functionality allows owners to find theft by employees who return cash sales to themselves. This is when a customer comes in and buys low-ticket items under $30. The customer does not take the receipt, but the employee keeps it. The employee does the return of that receipt and pockets the money.

“You can catch that with point-of-sale integration,” he said. “Technology makes it easier to catch that.”

Credit card fraud

“What we’re seeing more and more is credit card fraud fraud,” Kate said. “It’s helped by sharing what’s happening within the Lumber Association of Texas, where I serve as President. The thieves have improved their technology; we’re just trying to keep up with it.”

“When we launched our ecommerce site, we weren't sure of our retail presence,” she said. “We quickly found it was a hot spot for fraud. People were coming in with stolen credit cards. All the information matched, and they would place huge orders for pick-up. Then, a month later, we would get that chargeback, forcing us to work with the police to get that product back.”

Kate wanted to secure her products without sacrificing the customer service that they built their reputation on. “We got creative with categorizing our online sales and taking credit cards over the phone,” she said. “We still need to do both of those to give optimal customer service. We have put in infrastructure based on material combinations and zip codes.”

What the future holds

In the future, Nate looks forward to digital fence lines and RFIDs (radio-frequency inventorying), which Wal-Mart is rolling out in 2024. This tech enables businesses to enter inventory information on their systems by scanning a bar-coded label with a hand-held device. “It’s already here; it will just be more prevalent,” he said.

Many companies are incorporating “aggressive hospitality,” where employees prioritize watching customers and establishing a bold presence in aisles and with customer interactions. Using an integrated POS can help move workers from behind a counter to in the aisles with customers.

Want to hear the full discussion? You can access it here.

If you enjoyed reading this article, check out these assets for more information:

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