So much for holiday cheer. The busiest season of the year for shopping is also the busiest for shoplifting. Consider the damage done when humbugs fill stockings with stolen goods.
Petty thieves and organized shoplifting rings exploit the chaos of the holiday season to swipe goods at stores across the country.
Retailers lost $31 billion -- the equivalent of 1.5 percent of their annual sales -- on shoplifting, employee theft and other fraud in 2004, according to a report released Tuesday. And the largest chunk of those losses, referred to as shrinkage, came during the final three months of the year.
"It's largely a function of the busiest time for retailing. It introduces professional shoplifters who are always there, as well as a whole bunch of amateur shoplifters who normally wouldn't be in the stores at the same time," said Richard Hollinger, University of Florida criminologist who analyzed thefts at 107 U.S. retail chains to compile the National Retail Security Survey. "There's a certain level of chaos that occurs in retail stores at this time that shoplifters find helpful in disguising their activity."
According to Hollinger, shoplifting has become a $10.5 billion industry, with organized theft rings accounting for the majority of the thefts. Their favorite time to operate is during the chaotic holiday season when store employees are overwhelmed and distracted by throngs of shoppers.
"Any time you have higher traffic levels in your stores, (shoplifting) is certainly something that's higher on your radar screen," said Charles Hodges, a spokesman for RadioShack Corp. Like several other retailers asap contacted, Hodges wouldn't discuss his stores' security.
Retailers also risk losing more merchandise because of large holiday displays.
"There is just more product out on the floor, so it would stand to reason that the shrinkage would be higher," Hodges said. "We don't want people to walk in and see everything in locked cases, and we're willing to take a reasonable amount of risk."
Professional shoplifters put stolen items into boxes or bags lined with foil to prevent security tags from triggering magnetic security scanners. Some wear spandex under their coats so they can wad up clothes under the tight inner garment without adding suspicious bulk to their frame. Thieves who return the items for store credit can then sell the gift cards they receive in bulk on Internet auction sites.
Theft by employees costs retailers even more than shoplifting, or about $14.6 billion in 2004. This type of theft can be exacerbated when stores who need extra bodies don't screen part-time holiday employees as rigorously as they would full-time workers.
"A lot of employees go to work for retailers at this time of year for the purpose of stealing at the store because they know they can get away with it," Hollinger said.
Many stores beef up security around the holidays, hiring extra security guards or actually monitoring video cameras that are just for looks the rest of the year, Hollinger says. ADT Security Services said it typically sells the most security tags in September and October as stores prepare for holiday shopping.
ADT has also seen a marked increase in the popularity of sophisticated digital camera surveillance systems in the last year as they have become more affordable. Since footage is recorded onto a computer hard drive instead of video cassette, it can be beamed to law enforcement officials and other retailers, which helps combat organized rings that hit multiple targets.
The computer systems associated with the digital cameras also allow retailers to pull up footage of a specific cash register at the exact time of a questionable transaction, allowing them to fight employee theft.
Hollinger compares the way retailers and thieves try to one-up each other to an arms race.
"It's an escalation on both sides," he said.