Is Shoplifting eating away at your Bottom Line?

Do you think shaming the suspect on social media might save you money? Think again…it might have greater impact on your bottom line.

Before we get into what you can do about it let’s agree to bust a few myths.

“Shoplifting is just a cost of doing business”

NO, it’s not. It’s an exception and one that should not be tolerated.

“Shoplifting increases the prices that honest customers pay”

MAYBE, but not everywhere if you want to stay competitive, and you probably already know that. Retailers typically do not increase retail prices to offset losses, they take the hit at the bottom line though.

“Shoplifting is not a real crime”

YES, it is a crime. In fact, it is not called shoplifting it is theft.

The Criminal Code of Canada does not distinguish between the act of theft, other than a threshold of under or over $5000 which determines the different penalty administered in Court.

Shrinkage in Canada exceeds $5 Billion per annum.

That’s a lot of money, but unfortunately, that’s not all of the loss. That number does not include cash loss, or online fraud, or insurable claims, or fraud charge-backs.

So what can be done?

There are a lot of solutions available to retailers. Some can cost a lot of money, but others are …wait for it …FREE!

Yes, that’s right, FREE.

To the degree that you are already invested in these practices to sell merchandise, they are not an extra expense. Customer service, for example, is the best deterrent to address external theft.

A word of Caution!! though…

If not done correctly, addressing crime can have some unintended consequences. A false accusation, or a false arrest, can cost thousands of dollars more than what you think you might have lost.

And posting a picture of a suspected shoplifter on social media can be a double whammy! and here’s why…

Part 1: The situation

Retailer ABC experiences a theft. Fortunately, they have security cameras in the store and review the video footage to see “who done it”. Several hours before the discovery of the theft the see the crime. It appears that a young girl acting alone is the culprit. The retailer finds the best view of the face of the young girl and calls the police. Police explain that they can not attend, but that if the image is good enough, just to post the photo on Facebook. They explain that that should be enough to either draw out a tip from the community or shame her into thinking about her actions if she every considers stealing from them again. The retailer does just that.

Part 2: So what happened?

In this case, the mother turned the girl in. No harm done, all product returned. And the girl is labeled a shoplifter in the community. “Well deserved” some might think. “Serves her right” they say.

Part 3: What’s wrong with this picture?

Many things for sure.

We can start with the community being tasked with the role of being judge and jury.

But the big issue – one word – “consent”.

Here’s the Bottom Line! A business must obtain consent to use personal information – even from a shoplifter!

The double whammy? You may be paying the shoplifter and the Office of the Privacy Commissioner of Canada.

Now here’s the detail for your reading pleasure…

Background

Identity theft was a huge issue before the introduction of strict privacy laws. Identity theft was made possible by the irresponsible handling of personal information by businesses in some case.

There are laws protecting a person’s identifiable information. PIPEDA (Personal Information Protection and Electronic Documents Act) is a law that applies to businesses.

In many cases, retailers don’t think of this law when it comes to shoplifters.

A shoplifter is still an individual though.

As a result, a business must also be sensitive to what they do with the personal information of a shoplifter.

A photo has been determined to be PII (personally identifiable information) and is subject to privacy laws outlined in the privacy legislation.

This means a business must apply the 10 guiding principles of PIPEDA for instance, to anything they do with a photo.

The privacy laws are not enforced by Police, but rather by investigators dedicated to the Office of there Privacy Commissioner of Canada.

As a result, there is no provision in the Criminal Code that makes it a criminal offense if the privacy laws are breached.

But there are provisions in the Privacy Act that speak to what might happen if a business breaks the law.

The amounts in terms of penalties are enormous, up to $100,000

You can see how there might be confusion with a police officer who gives his or her permission to a business to post a shoplifter photo as a deterrent, they are referring to laws they enforce.

So the bottom line is this; without permission from the shoplifter, a photo cannot be posted of that shoplifter.

The exception is if the Police post the photo, as they are exempt from the act.

Hello, I'm Stephen O'Keefe. The information you read here is intended to help businesses answer some of the tough questions about everyday events in the retail environment. After spending over 3 decades in this industry we've seen a lot!

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