C-stores have unique challenges that make them ripe for crime. Products are easily accessible. Footprints are small. Many stores have a handful of employees. And many operate around the clock. It’s no wonder, then, that c-stores are popular targets of grab and go or armed robberies.
And that doesn’t even take into account casual shoplifting, which might not be given a second thought, given the low price point of the merchandise. But consider this: shoplifters say they are caught an average of only once every 48 times they steal.
The overall impact of theft on retail is significant. The National Retail Federation estimates that theft of all forms costs retailers $46.8 billion a year—or about 1.3% of total sales.
Could technology that combats specific areas of loss prevention be the solution? Tools have grown increasingly sophisticated, but at this point, remain best suited for specific-use cases.
Problem: Theft of Every Type / Solution: Cutting-Edge Cameras
Digital camera technology has improved dramatically. You see it in the quality of photographs and videos that your smartphone can produce. The same is true for retail security cameras.
Sprint Food Stores, a Georgia-based chain of 30 stores, recently improved its digital cameras and connected them so that they can be viewed offsite. The cameras offer 360-degree views, eliminating blind spots, an area that savvy shoplifters will scope out.
But the cameras were enhanced by integrating with POS and smart ER exception reporting software, which scans all transactions to identify questionable activity. It pulls up the specific spot on the video for review; no more sifting through hours of video footage to see if anything untoward occurred.
Cameras have additional benefits—and this is where they might provide a quicker return on investment: deterring fraudulent injury claims. Recently, a workplace captured an employee faking his own slip-and-fall. The placement of cameras and accessibility of footage saved the company well into six figures. C-stores with these same sorts of bogus claims might consider the tool—even if shoplifting isn’t a problem.
Even if those aren’t issues in a specific store, don’t dismiss this loss prevention tool too quickly. With the advent of 5G, all of technology is about to change. “Higher speeds and lower latency will also make new experiences possible in augmented and virtual reality, connected cars and the smart home — any realm where machines need to talk to each other constantly and without lag.”
Cameras will play an important role as these advances come together. In Japan, a security camera called “AI Guardian” uses cameras and artificial intelligence to read body language of potential shoplifters. If the body language is suspicious, the store employee is notified via an app. And yes, it is very much like Minority Report’s predictive policing.
Problem: Repeat or Professional Shoplifters / Solution: Facial Recognition Software
If the store is a frequent target for organized retail crime, facial technology might be the right loss prevention solution. The facial recognition technology scans the image of a person entering the store, compares it to a database of shoplifting convictions, and alerts the store employees that a shoplifter is in their midst.
While this is probably too costly to combat petty shoplifting, improvements in technology also make this an area worth watching. Prices have dropped and the quality of captured images has improved, making apprehension more likely. Speed has increased, too. Closed-circuit cameras paired with facial recognition software can identify a potential shoplifter before they’ve taken three steps into the store.
This might be an appropriate loss prevention tool for stores that are an easy target for professional shoplifters, who are more likely to grab higher-priced items such as technology, cigarettes, and cases of beer.
Problem: Chronic Robberies at Night / Solution: Entry on Approval
If robberies are an issue, entry upon approval technology allows the store to control who enters and when. Robberies in particular hit c-stores hard and are dangerous as well as costly. According to FBI figures, c-stores rank as the most robbed storefront, with gas stations second. Both are significantly higher than bank robberies. About half of all robberies net $200-1,000.
FKG Oil had one location that had been robbed numerous times by armed masked men. The store posted a sign telling customers that they must look at a camera to gain entry into the store between the hours of 8 p.m. and 6 a.m. All faces are scanned and recorded. One shoplifter who has been recorded stealing has been flagged, so that he is never allowed entry. Anyone wearing a mask—a hallmark of those armed robberies—is automatically denied entry as well.
Blue Line Technology, the facial recognition maker, says that 78% of all retail robberies occur between 11 p.m. and 5 a.m. and that half of those crimes involve violence. While most convenience stores keep the cash in the register low—mitigating the dollar loss with a robbery—the added toll of employee injury or death is incalculable. FKG Oil says employees are now more willing to work the overnight shift as a result of feeling safer.
Still, there are privacy concerns. As biometric identifiers like facial recognition increase in use, hackers are looking to steal that information.
Problem: Employee Theft / Solution: Exception-Based Reporting
What if the criminal is operating inside the store—and has access to the cash register? Exception-based reporting might be the loss prevention solution to catch devious employees. The National Retail Federation’s survey ranks employee theft just behind shoplifting as the greatest cause of retail shrink. Another survey, by Jack L. Hayes International, found that one in 35 employees was apprehended for theft from their employer and that employers recovered $38 million from dishonest employees in 2017.
Mark Doyle, Hayes president, says employee theft has two big misconceptions: that it is an isolated act and that it costs the employer very little. In fact, Doyle puts employee theft as “the most severe problem facing the industry.”
While exception-based reporting can note anomalies at the cash register, it may work best when deployed with other loss prevention tools. Cameras can show whether employees are under-ringing items or inappropriately voiding transactions. An added benefit: disclosing whether employees are asking for ID for products like beer and cigarettes. Failing to do so can be costly in terms of publicity and potential loss of license to sell.
The Bigger Picture on Theft Prevention Technology
Technologies like exception-based reporting tend to work best in tandem with new cameras, upping the initial cost of investment. But they also bring by-products like improved employee safety, thwarted fraudulent lawsuits, and verified ID checks.
When deciding whether to deploy new technologies, understanding the specific reasons for the intervention is key. Stores with robberies, for instance, may need more aggressive loss prevention strategies because of the likelihood of violence. In other cases, the ROI isn’t there—yet at least.
Still, if theft persists in your store, keep an eye on these technologies as prices drop.
In many cases, the best theft prevention tools could already be at work in your stores: your employees. Retailers use CB4’s machine learning technology to keep employees engaged, a proven deterrent to retail crime. Learn how here.