GCR talks to Jeremy Davies, managing director of GCS (GB) Ltd, about the hidden costs of shrinkage to garden centres. Jeremy tells us the processes he recommends to mitigate these losses
Jeremy Davies has been in in the security industry since 1994 and has 24 years working within the retail loss prevention field.
In this time, garden centres have changed from plants only shops to leisure destinations.
This has led to desirable, expensive items sold via into garden centres.
High street stores have reduced shrinkage by implementing tagging systems and staff training. The garden centre industry hasn?t woken up to the hidden costs of stealing.
High street staff receive loss prevention training and switch on to customer theft.
They train on the best way to approach a potential thief. If they don?t pick the threat up, the tagging system, supported by placed CCTV cameras, will help.
BRC figures show theft as 75% cause of shrinkage
Latest BRC figures show that around 75% of the shrink is due to customer theft. Jeremy believes that the garden centre industry suffers much more than the average retailer. It is still lagging behind when it comes to security.
Jeremy?s company GCS focuses in this area, along with mitigating the risk of burglaries and staff theft. It is also the designated HTA security advice line provider. Garden Centres call upon GCS has to test existing customer theft security measures.
They do this using a ?Secret Thief? exercise. A member of the GCS team will take on the role of a shoplifter for an hour. The ?Secret Thief? often steals more than ?450 worth of products in an hour, and sometimes as much as ?800.
Desirable products increases shrinkage
?Garden centres now sell the same desirable products as the high street,? says Jeremy.
?Thieves aren?t stupid. They know it’s easy to blend in with the crowd in a garden centre. They know that the security isn?t as hot in garden centres as it is in high street stores.
“It is logical for a thief to target garden centres. They can park for free, wander into the store, pick up a few items, take them back out to the car and start again.?
As there is no tangible bill for these losses, garden centres often don?t realise the extent of what is happening. Due to the stock-managing systems that many garden centres use, it could take a year for a garden centre to value the shrinkage. Customer theft could be as much as 5% of a company?s turnover.
This means that for a business that turns over ?1m per year, the shrinkage could be as much as ?50,000. ?If an owner of a garden centre received a bill for ?50,000, they would jump on that issue straight away,? says Jeremy. ?As there is no invoice sent for the sale value of the items, they can?t account for the cost.
?Garden centres that operate a well-run tagging system have seen their stock loss reduced and managed. sales increase through improved product availability.
“If the item isn’t stolen, it is still available to the genuine customer to buy. The garden centre industry is an easy-going, laid back industry that thinks the best of people. Thieves are taking advantage, meaning garden centres are a soft target.?
There are five product categories deemed desirable targets by thieves:
?Seeds are worth more than gold by weight, and are easy to pocket,? Jeremy explains. Stolen in bundles of five to 20, a handful can get stuffed into a pocket ? hardly noticeable as a thief walks out.
?At ?2.50 per packet, this may not seem a lot, but multiply that by 20 and theft can wipe off all the margin in that category.?
Candles are desirable, high-value products that are easy for a thief to resell. ?Professional thieves sell these products on eBay, then steal to order,? says Jeremy.
These are high-value items, considering their size. ?Things like lawnmowers do get stolen. But things such as secateurs are easier to conceal,? Jeremy tells us.
These are the products such as spray guns and hose connectors. Customers will often buy a watering system, but don’t want to pay for the extras, so take them.
This includes branded Wellington boots and high-value branded jackets and gardening gloves.
?These are the core targets for a thief. They tend not to steal bulkier items such as fencing, plants and aggregates,? says Jeremy.
Professional thieves put their energy into stealing what they can turn into hard cash. Often, they going into a store with a shopping list, to get most value for the time they invest in stealing.
At the other end of the spectrum are the pilferers. These are people shopping in store. They will pocket two packets of seeds as a discount they believe they are entitled to it.
The easiest way to increase profit without increasing sales is to reduce costs.
By installing a security tagging system, a garden centre can protect key categories.
A well-run tagging system will keep watch on your products. Irrespective on how big your garden centre is or how many staff you have.
It is also vital to ensure the tag used is suitable for the product it is protecting. GCS helps with this, and trains staff on how to approach customers when the alarm sounds.
It?s crucial to train staff how to respond to the tagging system when a customer has set it off. The customer needs to good service while you investigate the cause of the alarm.
GCS trains staff to think about the tagging system alarm in the same way they think about the EPoS card machine declining a card. It is the machine that has raised the flag, and not the member of staff who is accusing a customer.
Tills are usually located near the exit. Staff there are on hand to help customers and react to the tagging system when the alarm goes off.
Customer interaction training is very important. There are several stages you need to go through.
Even if you don?t get to the bottom of what has caused the alarm to sound, a thief wants to be anonymous, and the moment the tagging system goes off, they aren?t.
Retailers invest in tagging systems because a well-run system works. Another thing garden centres can do to prevent theft is to create a red route. Take the layout of a garden centre, with tills at one end and the caf? at the other.
Between the two, you map out the high-risk areas of the centre. Create a formal route for staff to go through to make it more difficult for thieves.
This also helps to improve customer service, and more sales happen due to customers asking staff for advice. Customer service is a fantastic way to prevent stealing.
The most common types of internal theft are staff members skimming from the till. They may not charge friends and family for every item. They may process refunds with receipts left behind by customers.
Skimming is most common in garden centre caf?s. These are cash-rich environments. staff members may fail on purpose to process a transaction and pocket the money.
Processing a receipt kept from a previous transaction is also a common form of internal theft.
The product is either never returned and the staff member will take the cash from the till. They may find a receipt, go into the garden centre, find an item on that receipt and get the refund that way.
Home deliveries also suffer from internal theft. Jeremy has come across many instances where a staff member will load extra things onto the van when delivering to a genuine customer?s home. These are then delivered to their own house.
CCTV is a fantastic tool to have in your security armoury. Most businesses incorrectly believe that CCTV on its own is enough to prevent customer theft. Unless you invest in someone to watch the footage all day, every day, this isn?t the best use of this deployed security system.
Closed Circuit Television has its place and is best deployed over tills, in the cash office and on the cash collection route. Anywhere handling money happend should have surveillance. CCTV should also be at entrances and exits, on the main thoroughfares in and out of the business and covering the customer toilet entrance.
It can also be useful at night to prevent burglary and damage. Customer theft is best prevented by having a tagging system supplemented by CCTV.
Jeremy recounted a recent meeting with the director of a large independent garden centre.
?This business had focused on growing sales and improving customer experience. The gross profit had not reflected these efforts,? he tells us. ?This business estimates to be losing ?90k-120k every year due to shrinkage.
“There was no tagging system and little coverage from their home-installed CCTV. Staff had not received any loss prevention training.?
Other garden centres in the same area were much harder targets for thieves. Jeremy expects his business will be able to improve this company?s fortunes.