The curious shoplifter

Last week, I witnessed something dramatic.

I was standing in the auto care aisle at Wal*Mart when a teenage boy entered the aisle. He looked about 14, with a very long shirt and baggy shorts. He started fiddling with the merchandise, which seemed odd to me because he couldn't possibly be old enough to drive a car.

Suddenly, a man came up to him. The man was tall, with a shirt and tie and a big official Wal*Mart badge. He was holding a torn-open, empty package of something - I couldn't tell what, but it looked like maybe razors or video games. "Do you know anything about this?" he barked. The boy shook his head no. "So if the police searched your pockets on the way out, they wouldn't find anything?" Again, the boy shook his head. The man stared at him for another few seconds. "All right then." And he left.

I stood staring at the kid, having abandoned all manner of social inhibition. He continued to look at the stuff on the shelves, but his hands hovered nervously around his pockets. Then he glanced at me and we locked eyes. He looked scared.

Finally, the kid left the aisle and he was gone. The man came back a minute later, searching all around between the shelves and under the products, presumably trying to find the item which he assumed the kid had unloaded. After all, the auto care aisle is relatively secluded and if I were trying to hide inside Wal*Mart, it's exactly where I would go.

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Retail theft is a big, big problem in the US. Professional thieves wear trench coats with inside pockets, so that they can reach their arms into the shelves and sweep out all the product at once. And they go for items that fit their target criteria: small and valuable. High-theft items include traditionally valuable items like razor blades and DVDs, as well as more recently valuable items like cough medicine and baby formula, the ingredients of which are used to make drugs.

This problem is formally called shrinkage, and many attempts have been made to solve it. You can watch your store - Wal*Mart installs security cameras every few feet, disguised in eerie little domes and suspended from the ceiling. You can secure your product - Walgreens has locked up razor blades for years, and Best Buy ties down cellphones with massive security cables. You can move your product's location - FedEx Kinko's now puts printer cartridges behind the counter. You can install shelf-level security - this solution has clear shelf guards, and if the shopper holds the guard open too long it sounds an alarm!

The problem with all these tactics is that while they deter thieves, they also deter honest shoppers. I hate finding an employee to unlock the case, so sometimes I just skip it. So while theft goes down, sales go down too. But the even crazier thing is that these solutions still provide retailers with a return on investment. Shrinkage causes so much loss that it is literally cheaper for them to make shopping hard for honest people, than it is to make it easy for thieves.

But folks, this is a losing battle. The smarter the stores get, the smarter the thieves get. It seems we are caught in a downward spiral, where the ultimate loss is to the shopping experience. And like any systemic problem, I don't think it can be solved by putting a bandaid on the end state. You have to start farther up the chain.

Maybe it involves communicating trust in your shoppers. Maybe it means treating your employees with respect - after all, half of the loss is from employee theft. Maybe it means going even farther back, to the root causes of the need, and getting involved in the community.

Instead of scaring that kid, which will only make him tougher next time, maybe the Wal*Mart man could have taken his information, called his parents, and invited him to a class on how to be smart with money. Maybe he could have recruited him into an internship program or a Wal*Mart volunteering squad. Maybe he could have sat him down and interviewed him about his reasons for shoplifting. Maybe he could have taken him in the back and showed him the security guard station. Maybe he could have invited him and his family over for dinner. I know these ideas sound crazy, but they aren't much crazier than yelling at every suspicious-looking teenager.

I don't presume to know the answer to this one. It's something that a lot of smart people have spent a lot of time trying to solve. What I do know is that there are some dishonest people out there, but far more honest ones. And if the shopping experience becomes so bad that the honest ones feel their business isn't welcomed, they will take their business elsewhere.