If fraud, shoplifting and organized retail crime (ORC) were the only threats that retail executives needed to worry about, that would be hard enough. But theft by employees has risen too, plus cargo theft. Factor in distressing violence in shops — which makes it even harder to attract frontline employees — and the retail industry has itself a $100 billion+ issue.
It’s easy to spot the challenges. Much harder to find a solution.
This brings us to the topic of RFID, short for radio frequency identification.
High Praise For RFID
“RFID is a vastly underused Loss Prevention solution”, says Dr. Read Hayes, considered by many to be the world’s leading expert on retail crime.
Hayes, a University of Florida Criminologist also leads the Loss Prevention Research Council (LPRC) — a research center he founded in 2000 with backing from Walmart
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Hayes says “RFID gives retailers capabilities they have wanted for decades”. The technology makes it easier to identify:
a) What has been stolen
b) Who stole the items
c) How they stole the items
d) When they stole the items
e) Who else might be helping them
f) What else they stole on past occasions
Equally important, if an item is no longer in the retailer’s possession, the retailer becomes aware of this critical fact much more quickly.
If you think this is all just theoretical, think again.
Macy’s excels at linking information from its video surveillance and RFID systems. Its team solves crime quicker than ever. And the cases it packages up for prosecution are brimming with solid evidence. This simplifies the work of prosecutors.
The ability to connect seemingly unrelated theft incidents has led to the demise of several ORC networks that in past years would have remained operational. And with regard to individual crooks, connecting the dots via RFID helps turns misdemeanor cases into felony prosecutions.
RFID Itself Is Already Common
When Hayes says RFID is underused, it is only in the context of Loss Prevention, not in the context of inventory management.
A huge group of retailers uses RFID for replenishing sales floors and stockrooms. Much or all of their inventory already arrives with an RFID tag. Those tags are applied upstream, at the factory.
For retailers who already use RFID in their stores and supply chain for inventory management, whether to also use it for Loss Prevention is a no-brainer. The merchandise is already tagged!
For retailers who still aren’t using RFID for inventory management, it begs the question: why not? Some retailers started over 10 years ago.
Lingering Misconceptions
Some believe that an item needs to sell for more than $5 to justify tagging it. In reality, today there are items being tagged that sell for under $1.
And this notional price threshold will keep dropping. The more ways you put an RFID tag to work, the less an item needs to cost.
Many businesses using RFID for inventory management have not yet started using it to reduce theft. Plenty of other uses exist too, from factory to store, including using RFID to automate self-checkout.
Another common misconception is that products made of liquid or metal aren’t suitable for RFID tagging. The truth? Whether it’s a bottle of household cleaner, a cheese grater or a tube of lipstick, a cost-effective RFID label today exists for any consumer product you can imagine.
The Bottom Line
The global community of Loss Prevention professionals, as a whole, is doing very good work under exceedingly difficult circumstances. It’s important for that to be recognized.
Having said that, it’s perfectly reasonable for a retail CEO to be asking his/her Loss Prevention team to present a plan for putting RFID to work — regardless of whether their company is already using RFID for inventory management.
If the world’s leading retail crime expert calls RFID a game changer, then clearly it’s time for retailers to act.
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