A Real Problem For Retail? A Shoplifting Q and A

We’ve all seen viral videos of brazen shoplifters or read new stories on reports of increasing shoplifting in retail stores. Last week a Giant Food supermarket in Washington D.C. announced that, in an effort to remain open, it is removing all brand name health and beauty products from store shelves and will check receipts of customers leaving the store, drastic steps to combat the shoplifting that the company said is causing the store to become unprofitable. It is the last remaining grocery store in that area of Washington, D.C. and its closing would severely limit the access to fresh food to people living there.

Retail shoplifting has been a frequent topic in the news and discussion on social media. It inspires passionate discourse from both sides on whether the trend is real. Those on one side point to the viral videos, store closings, and measures stores take to combat theft as evidence of the trend, while the other side cite official police statistics and the lack of details from corporations as evidence that the problem is overblown. As someone who both works at a store and follows this topic in the news, I have a lot of opinions on this issue and some insight that might clear up some misinformation that I often see.

Q: What makes you an authority on this topic? Why should we listen to you?

A: I’ve worked in retail for over two decades, from being a part-time clerk to an assistant store manager for a supermarket chain in New England (the parent company I work for also owns Giant). I’ve worked in multiple stores in many different types of neighborhoods.

Q: So is retail shoplifting a real problem or imagined?

A: This is a problem that has definitely gotten worse in the last half decade. There has been an increase in the number of people stealing and also the brazenness of some who know they can’t be stopped. The main causes are the ability to sell stolen merchandise online, certain jurisdictions declining to prosecute most potential cases, and some companies changing their policies on stopping shoplifters. The viral story of the Lululemon employees who were fired for trying to stop some shoplifters is the most known example but many stores now have a policy of not stopping shoplifters at all or having a strict multistep protocol that employees must follow before they do. Stores do this for the safety of employees and to limit legal liability if something goes wrong during a stop. Whether you think this the correct decision or not by stores, it means that shoplifters know that in some stores (the frequent shoplifters know exactly which stores those are), they can walk in, fill up their bags or a shopping carriage with product, and walk out without anyone stopping them.

San Francisco has been making headlines in recent years for their shoplifting problems, but they are not the only area in the country with such problems. I live in the Boston area and after the city’s district attorney decided not to prosecute shoplifters in 2019, shoplifting has skyrocketed and been just as much of a problem as in San Francisco, even though it has so far avoid national headlines.

Of course if you’re skeptical that this is happening I wouldn’t expect you to take my word for it. I also acknowledge that while viral videos are great content, they’re anecdotes, not data, and store closings often have multiple factors, not all of which are related to shoplifting. The evidence I would cite are the public steps some stores have taken that would not make sense at all if the shoplifting problem isn’t real. It’s very common for stores to have security devices on high-priced items, but now stores are locking up cheaper items like Spam. In high theft areas, stores are putting entire aisles or almost the whole store under lock and key. This is not good for business. Actual customers hate it and go elsewhere if they have a choice, and you need more employees to fetch products every time a customer needs something. The Giant store not carrying any private brand products is a bit extreme but many stores have stopped carrying high theft items in certain locations. Other steps stores have taken include limiting store hours, closing certain entrances and exits, and hiring more security.

One other thing that I sometimes suggest on Twitter: go to a store in your area and talk to the employees. I suggest a grocery store or convenience store. I’m not saying you have to take the word of a company’s CEO or spokesman. Talk to the cashier, the workers you see stocking the shelves, or find a manager. I’d bet if you ask them they’ll tell you shoplifting is a big problem, and one that’s increased in recent years, and if they’re anything like the people I work with, they’ll be more than happy to tell you the details and the incidents they’re witnessed personally.

Q: Isn’t a lot of theft in grocery stores just poor people stealing food to feed their family?

A: No, nor is it teenagers stealing candy or makeup after they get out of school. By far the items that get stolen most often from grocery stores are those with resale value: various high priced health and beauty care items, batteries, and Tide laundry detergent. Those are the items you’d often see people selling on the streets in poor neighborhoods, and in recent years on websites like Facebook and eBay.

Q: You mentioned stores hiring security. Wouldn’t that stop shoplifters?

A: An open secret that all frequent shoplifters already know is that security doesn’t actually do anything. The same issues with safety and liability apply to security guards. If a store has a policy where employees can’t stop shoplifters, that’s probably also going to apply to security guards. Now if a store hires a police detail, that’s different, but they are much more costly. At $60 an hour that’s over $250,000 a year. Unless you’re a big box store your annual profit is unlikely to come close to that number.

Q: Isn’t the theft cover by insurance anyway?

A: Theft at retail stores is not insured. In some cases, robbery (i.e. someone comes in with a gun and takes money from the cash registers) is insured, but not regular theft. This is in my opinion the biggest myth about retail shoplifting, that the losses are covered by insurance. When an item is stolen it is pure shrink. And if you think about it it wouldn’t make sense anyway. For something that’s a regular occurrence, the insurance premiums would just be what you’re losing in theft every month; otherwise the insurance company would quickly go out of business.

Q: Didn’t Walgreens admit they were lying about shoplifting being a problem?

A: It was one person on an earnings call trying to downplay how much money they were losing from shoplifting. I would expect them to try to put a positive spin on things.

Q: What about official government statistics that says shoplifting is down?

A: Those numbers are from police reports. All usual caveats about the accuracy of police reports apply. In recent years police have been much more reluctant to file reports because they know it won’t be prosecuted, and in response stores are much less likely to call the police because they know nothing would happen.

Q: If the problem is as bad as you’re saying why aren’t more stores closing?

A: My knowledge is in grocery stores. Grocery stores are a highly competitive field of business well-known to have a small profit margin, typically around 1-3%. But that’s just the industry average and there’s some variance in individual stores. This also means some stores don’t make any money at all and in fact are losing money every month. So why don’t these stores close if they’re not making money? There’s value in having market share and being known as a store that’s everywhere. Maybe you’re hoping a competitor who’s also losing money close their store nearby before you do. If you decide to close a store, it’s a lot of bad publicity, especially if you’re the last store in the area. And often it’s because you’re in the middle of a multi-year lease you can’t get out of. Grocery stores often have leases that last a decade or more, and economic conditions, both nationally and locally, can be much different from when you signed the lease.

(Other retail stores have higher profit margins and typically shorter leases but I don’t know much about them so I won’t speculate.)

Q: What about wage theft?

Wage theft is bad! It also doesn’t have anything to do with shoplifting. One thing being bad has little to do with whether another unrelated thing is bad. Yet wage theft is often brought up whenever people talk about shoplifting, possibly because some think that if corporations are bad for stealing wages from employees, then it is morally right for others to steal from them.

If you’re someone who thinks it’s right and good to steal from corporations, I’m definitely not the person who’s going to convince you otherwise. But I hope I have at least made the case that retail shoplifting is a real growing problem that stores are concerned about and not just something made up.