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Shoplifting and Organized Retail Crime: Mall Rats

John Talamo of The Limited knows exactly how profitable shoplifting can be. He explains the fight against organized retail crime.

By Sarah D. Scalet

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What did you think of Wal-Mart's announcement last summer that it won't prosecute people who steal less than $25 of merchandise?

I don't think there's anything wrong with the announcement or the policy. Every retailer has a similar policy. It only becomes newsworthy because it's Wal-Mart, the largest retailer in the world. We work in partnership with Wal-Mart; they have an outstanding program.

It struck me as one of those things where it's not a bad idea to have the policy, but you don't really want to publicize it.

No, I don't think so. What it tells me is they're focusing their efforts on organized retail crime, which is a greater problem than someone stealing a pack of gum.

Victoria's Secret bras are a big target, with more than $2 million of them reported stolen last year. What is it about Victoria's Secret bras?

It's a few things, and this is not an infomercial or a sales pitch. But clearly Victoria's Secret is the most dominant lingerie brand in the world. The second part is, the bras are easy to steal. You could fit a lot of bras at $48 apiece into a shopping bag, more than jeans or anything else.

How much do you change your strategy around new product lines being introduced in the stores?

The greatest risk we have is on a fragrance launch. Every time we have a fragrance launch, we have a full ORC launch strategy behind it. We track the product from the moment it's produced, to the distribution facilities, to our stores. Our field people will do inspections of the product as it comes in, do carton and piece counts to make sure it all gets there. Once the product starts to be produced and reaches its finished-goods stage, we start to monitor the Internet for sales of it. Every launch, we do find the product for sale before it's available to our customers.

On our last launch, we were able to make an arrest of a guy who was fencing the fragrance online.

What kind of ROI is your management looking for? Do they expect you to recover as much value of goods as you're spending, or do they see it in the bigger picture?

They see it in the bigger picture. To figure out our ROI, we look at it a few ways. One, how much product have we recovered? Last year it was about $1.5 million retail value. We also look at what we call—and this is a new method to ORC, which is a relatively new discipline within the loss prevention function—our out-of-business value.