In Depth

Loss Prevention: What Do the Mob, eBay and Winona Ryder Have in Common?

Loss prevention experts like Tiffany CSO David McGowan say closer integration among security disciplines will go a long way toward managing the retail industry's myriad risks.

By Daintry Duffy

April 01, 2004 — CSO — The world of retail theft is as old as the five-finger discount, but today's thieves are more organized and more sophisticated. To find out about the current challenges facing the loss prevention field, CSO Senior Editor Daintry Duffy spoke with two experts: David F. McGowan, vice president for worldwide security services at Tiffany & Co., and King Rogers, a consultant and former vice president for assets protection at Target.

It turns out that guarding the contents of the little blue box is not all that different from guarding a big box discount retailer. Rogers and McGowan offer surprising insights regarding the growing influence of the Internet in retail theft and fraud, the often difficult task of convincing management to invest in loss prevention efforts, and why Winona Ryder's sticky-fingered work caught on a store security camera may have a greater impact than anything she has done on the big screen.CSO: By one estimate, organized retail theft (ORT) costs retailers $34 billion a year in the United States. Why is ORT on the rise, and how has it affected the loss prevention industry?King Rogers: We're definitely seeing more and more organized theft, as opposed to opportunists and amateurs. Part of the reason for this could be the ease of getting rid of the merchandise. In the past you would find stolen products showing up in flea markets across the country. But today with Internet auctions like eBay, there's a whole new outlet for stolen products.

David F. McGowan: From the jewelry industry perspective, what we're seeing in the traditional retail stores is a greater degree of risk-taking with people coming in during the day and doing grab-and-run thefts: Rolex watches, solitaire diamond rings, anything with stones that can be separated from the metal and peddled in a secondary market. The thieves are more aggressive and are taking more risks.

Rogers: David, what about the phenomenon of smash-and-grabs that was so common 10 years ago?

McGowan: Smash-and-grabs continue to occur, but I don't think the frequency is as great. A lot of retailers have taken steps to improve their glass standards [on windows and merchandise display tables] to make it more difficult. However, we have seen, particularly in the past three to five years, a higher degree of what we call three-minute gang attacks. These traditionally happen overnight, and the thieves are generally in and out in three minutesbecause that's the average police response time in major metropolitan areas at night. It may take them a minute to penetrate the perimeter of a jewelry location, so then they have 90 seconds to grab everything they possibly can.

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