Wal-Mart Focuses on Big Shoplifting Fish
Organized theft rings and so-called professional shoplifters have become a huge problem for retailers and, not surprisingly, store operators and law enforcement authorities have
increased efforts to apprehend these criminals who steal billions of dollars in merchandise every year.
As the largest retailer in the world, Wal-Mart is one very big target for the professional criminal class and, as such, the chain has developed sophisticated methods of dealing
with shoplifting and a no-nonsense policy towards those who are caught.
Despite this, the reaction in some quarters to a recently leaked internal document from Wal-Mart that said it would no longer prosecute first-time shoplifters under 18 or over
65 who are caught with $25 or less in goods would have you think that the chain has gone soft on crime.
Chris Kofinis, director of communications at WakeUpWalMart.com, a critic of Wal-Mart’s policies, told The New York Times that the new policy “is a head-in-the-sand strategy
that is far different than what Sam Walton would ever have wanted, and it’s not clear this is the best strategy for Wal-Mart workers.”
J. P. Suarez, who is in charge of asset protection at Wal-Mart, said the policy makes sense from a worker and company perspective.
Employees, he said, “overwhelmingly” support the policy because it focuses their efforts on the most serious shoplifting threats.
“If I have somebody being paid $12 an hour processing a $5 theft, I have just lost money,” he said. “I have also lost the time to catch somebody stealing $100 or an organized
group stealing $3,000.”
Joseph LaRocca, vice president for loss prevention at the National Retail Federation, said many other retailers have come to the same conclusion as Mr. Suarez and Wal-Mart.
Prosecuting small thefts “does not warrant the store resources or the judicial resources required, given the dollar amount that was stolen,” he said.
Discussion Questions: Is Wal-Mart on the right track with its policy of not prosecuting first-time shoplifters caught with $25 or less in merchandise?
What will be the effect, if any, of the policy having been made public?
I think Wal-Mart deliberately leaked the memo, or made sure it would leak. And I think it was a wise thing to do. While there may be a slight increase in minor shoplifting, the company can spend its time looking for the culprits who cost it REAL money, organized rings and employee conspiracies.
Wal-Mart is evidently taking a wider look at its PR problems, and for the first time is doing things it isn’t being nagged to do. I spent 20 years covering the chain, and this is something new under the sun.
WM is getting very close to no longer being the premier retailer in the U.S. Retail Forward’s study about Target shows that if Target continues to build its food presence, something it has been overly cautious about, in my opinion, it will become the most-shopped store in the country.
And, Costco and Trader Joe’s and Whole Foods are all growing a lot faster than Wal-Mart.
I’ve been fooled before, but this time it appears that Wal-Mart is genuinely trying to change at least part of its culture.
Retail leaders could lobby for an expedited justice procedure for shoplifters, to reduce retailers’ prosecution costs. Perhaps the retailers of a particular town or mall could run a co-op web site with photos of all the shoplifters. Stew Leonard’s used to prominently post the customer bad checks. Clearly the current justice system is dysfunctional, so creative approaches are needed. Otherwise, shoplifting will just grow. If the cutoff is $25 today, will it be $125 4 years from now? Top shoplifter excuse: I do it because so many other people do it so I’d be a sucker if I didn’t do it. By not prosecuting, is the excuse validated?
I think they’re going to regret both the publicity and the policy itself. Taking this frankly lax attitude toward shrink suggests to both customers and employees that a little stealing is OK. In an environment where so much of the company’s assets are in plain view and the average item sold is under $25, I’m not sure how this makes sense. From a transactional perspective (cost to monitor theft in store, process the theft, etc.), yes, I can do the calculation. But this ignores the broader effect of saying that a little crime is OK. I’m particularly concerned with the effect on employees — typically the biggest source of theft. I can just see the fellows on the stocking crew eyeing that new display of Slim Jims at checkout #5….
Didn’t Rudy figure this out with the whole “broken glass” approach to crime-fighting in New York?
Wal-Mart is very focused on “shrink” and has been for many years. They have an aggressive and well understood policy on the consequences of internal shrink, and if you look at their % of shrink to sales, it is obvious that what they do works well.
I think a “leaked” internal memo, that outlines the implications to Wal-Mart in prosecuting all shoplifters is not an accurate assessment of their “going soft,” and believe they (as all other retailers must also do) have to weigh the cost of prosecution vs. the size of each individual problem.
Ask any Wal-Mart associate in the store on their opinions of Wal-Mart’s continued focus on self policing each store on shoplifting, and their clear position on consequences, and I’m sure you will hear the priority message loud and clear. You don’t reach the low shrink levels Wal-Mart has by being soft on policy.
Keep in mind that if this policy does not work, Wal-Mart has to option to returning to its old policy. When I worked in retail, we rarely prosecuted shoplifters. Organized theft rings are a major threat and Wal-Mart realizes how their resources can be better spent.
Shoplifting is not something that I think increases because I can stay under the $25 limit without a prior. The focus on priorities, as with all efforts, seems like the best way to address this. If I remember correctly, Sam Walton’s quest for that one item to drive sales was the same type of priority to build sales as this effort seems to be in finding those customers less inclined to pay for purchases.
There are several key issues here: First is the PR issue with prosecuting a 75 year old shoplifter caught with a bottle of Tylenol…you can imagine the headline that would bring. No company especially Wal-Mart could deal with that kind of publicity. Flip-side is the 15 year-old caught stealing a CD who then freaks out when caught creating a major scene in the store. The buzz that would instantly be created thanks to instant messenger, MySpace, and other communication means used by teens to spread information would quickly become a PR nightmare.
Now the problem is that with the leaking of this memo it has almost created an environment of “happy hunting” for those under 18 and over 65 for shoplifting at Wal-Mart. Word of this memo will travel quickly resulting in Wal-Mart having to do further explaining both pro and con. This is just another example where when you get to be as big as Wal-Mart you begin to encounter problems nobody else has to deal with.
The correct solution is to empower the store director to make the appropriate decision based on the individual situation. However when you’re as big as Wal-Mart you can’t allow this because what one store director does can at anytime become national news because of the size of Wal-Mart. Therefore as much as anyone hates to see an attitude of accepting a certain element of shoplifting by a key retailer it is really the only option they have. Keep in mind for many retailers shrinkage can be the second highest cost center a store manager can impact, with only labor being bigger.
My store is in an area with a large elderly (over 70) population. There is also a high school within walking distance. If we implemented Wal-Mart’s policy, two things would happen:
First, the elderly that steal will continue. Although we do not prosecute elderly due to PR reasons, we have several regulars that “make the rounds.” Once they are asked to leave our store, they go down the road to the next store until they are asked to leave. Eventually, they come back – and steal again. There is no “embarrassment factor.” They steal for many reasons, maybe even due to illness. There should be a social service agency to investigate.
Second, the teenagers will continue to steal. We do prosecute teenagers. If we don’t, they will tell their friends. Who wants a parking lot full of bored teenagers all summer? Especially if they know the only “punishment” is that they will be asked to leave? Again, there is no “embarrassment.” We have had parents complain all the way to our corporate office because it was OUR fault that their child was arrested for shoplifting – FROM US.
Bottom line; theft is theft. While nobody wants an old lady to get a heart attack because she was “caught,” we are not a daycare or eldercare facility. We are a retail establishment with a very low profit margin.
Retail stores work because of people’s over-all good will. Most of us appreciate that the stores are there for us and we like to be good and pay. And yes, sometimes, some of us make mistakes, especially while young (or I guess desperately poor and old). We learn more by the example of good people than bad, and the overall larger feeling of good will toward a store who understands us like we’re a family is going to get more people trying to help it.
But there are people who see a system and deliberately take advantage of it. This is where the anger of the law needs to be directed. I don’t know the statistics, but I’ll bet the 80/20 rule applies to good people making a mistake vs. the real criminals. I say, free up those guards’ time, Wal-Mart, and concentrate them on crime. I’ll be helping (oh and buying even more stuff at my friendly local Wal-Mart.) Smart always trumps system.
I don’t see how they would avoid an age-based discrimination suit if they prosecuted thieves based upon their age. If I get this right, I can steal the Tylenol if I am 66 but not 65? And the CD is free if I am 17 but not 18? And we are worried about bad publicity by people who are caught making a stink about it? What a world.
“If I have somebody being paid $12 an hour processing a $5 theft, I have just lost money…”
True, but if prosecution ultimately deters 3 such thefts, then you’ve saved money; I don’t have the answer to this, since it’s one of those “on the one hand…” arguments that turns on empirical evidence, but I am a little disappointed that not even one wag has quipped that every item in a Wal-Mart is under $25 (or at least should be).
This is really much ado about nothing. We’re talking about first-time shoplifters, who are under 18 or over 65, who steal something selling for $25 or less. They still get caught and scared, and only get a one-time free pass. Wal-Mart has always had signs in the restrooms that say something to the effect of “Shoplifting is a Crime. If you do it, you will have a criminal record that will haunt you for the rest of your life.” What does that say to folks using the bathroom about what Wal-Mart really thinks of its shoppers?
Sure, shoplifting is a crime, and costs retailers money, but it isn’t the small time, one-time shoplifter that is causing the problem.
I don’t think you publish a policy like this, and if it leaks, you do not verify it. It’s a practical internal policy, but I agree that it can impact employee attitudes toward theft. Train store managers to use discretion in those categories, make sure they understand the business reasons behind it, and leave it at that.
I think Wal-Mart may be trying too hard to put on a kinder, gentler face to the public.
Famously cost-conscious Wal-Mart has concluded that prosecutions of minor thefts cost more in company resources than the losses they represent. But not prosecuting doesn’t mean abandoning vigilance. If an individual is stopped in the act of shoplifting an inexpensive item, questioned and escorted from the premises, at least that theft has been prevented. Many will not return out of shame.
The “leaked” memo (I agree) may just be the company’s way of putting organized thieves on notice that it has been overhauling and strengthening other security protocols.
It’s well documented that petty theft, bad check cases and other crime from big-box retail greatly taxes local law enforcement agencies. Wal-Mart’s decision not to prosecute low dollar shoplifting cases could be driven by the need to reduce their contribution to the burden.
Wal-Mart has it right this time. Many of the first time thefts are a result of young kids and non-career shoplifters. By focusing its time and efforts on the habitual and professional shoplifters, Wal-Mart will be able to reduce its losses without increasing its loss prevention costs.