5 ms·

It sounds like that store has deeper problems. They aren't checking thier stock and so do not notice a theft when it happens. That has insurance implications.

It sounds like that store has deeper problems. They aren't checking thier stock and so do not notice a theft when it happens. That has insurance implications. Also, it suggests inside jobs. If the staff are turning a blind eye to theft, not reporting missing stock, there is a reasonable chance that the staff are involved.

retSava 5y ago
No implication of insiders imho - rarely do reps see exactly what is stolen and can -- that line item. Many stores do a (costly) stock inventory check once a year, literally going from shelf to shelf and counting what's there, then that is crosschecked and corrects the store inventory database.
- deleted 5y ago
  [deleted]
ethbr0 5y ago
A Home Depot has somewhere around 40,000 different products per store. The count is always wrong. It's continually updated, but it's still always wrong. Because the amount of labor cost to ensure it's accurate at all times would be a silly use of scarce resources. Sometimes it's as simple as a customer picking up an item, wandering around, and dropping it somewhere else. Sometimes it's theft. Sometimes it's an incorrect count in receiving. All of this is an average day at a warehouse store. Walmart deals with the same thing.
- sandworm101 5y ago
  Eight chainsaws? I dont think they are lying in the wrong aisle. Powertools and other high value items should be stock checked.
  - ethbr0 5y ago
    How often? Daily? So ~15 minutes / 60 x ~360 days x ~2000 stores (US) x ~$30/hr ($20+benefits) = $5.4 M in labor costs ... and that's just to check chainsaws.
    - ipaddr 5y ago
      Knock the 30 dollars and benefits down to part time 15 an hour employees. We're down to 2 million.. let's select the 10% worst stores.. we are down to $200,000. They can check other inventory items and check out customers. Cheaper than a one second ad during the superbowl
      - ethbr0 5y ago
        > Knock the 30 dollars and benefits down to part time 15 an hour employees. So, you're encouraging a business to hire minimum wage labor and schedule so as to avoid paying benefits? And these people (you've just screwed) are the ones you're proposing be granted the responsibility to detect theft? > let's select the 10% worst stores Infeasible, as most theft by dollar is organized, which targets a somewhat random scattering of stores, intermittently. Highest shrink retail stores already have additional theft mitigation tech deployed. > They can check other inventory items and check out customers Not if they can't be in two places at once. 15 minutes is a fairly middle of the road estimate for: walking to the area, checking the on-shelf number, checking above the rack, and possibly checking the back. If anything, it's already under-estimating the time required.
        cto_of_antifa 5y ago
        The solution is simple. Punish the employees
        ipaddr 5y ago
        Yes.. or hire students not phds to do the inventory
    - Cycl0ps 5y ago
      Assume high value items are the majority of the thefts by value: $800'000 in thefts from that aisle * 51% for a (slim) majority * 2000 stores = $816M in shrinkage. If your store is seeing six figure losses due to theft you hire out some Loomis guys or rent-a-cops and park them at both entrances. That 800k number does seem to get quoted alot in the comments here, I wonder if it's an actual figure or just some part of a training video that sticks with people
  - thrower123 5y ago
    Odds are good that they are physically in the store somewhere, but nobody knows where, because they are on a pallet on a shelf sixteen feet up in the air.
- danuker 5y ago
  > a silly use of scarce resources. When your losses are so bad, it's time to invest more in security. Accounting together with video evidence can more timely detect thieves, and might be worth it.
  - repiret 5y ago
    Two points: 1. Unless store security catches the thief at the door, many police departments don’t have the resources to track them down. So finding out that you were burgled within a couple days isn’t much better than finding out at a quarterly or even annual inventory. 2. It’s not that big of a problem. From the article: “Organized retail crime costs retailers an average of $719,548 per $1 billion in sales”. Putting that in a more accessible scale, that’s 72¢ per $1,000 of sales.
    - namelessoracle 5y ago
      One point about 1. Even if Store Security DOES catch them at the door. What do you do when the person says "I dont care im taking this and going" and refuses to stop for the security person. The security person is not a cop, and is probably not the very expensive armed security that banks have. If the person calls their bluff not much can be done at that point. And thieves know this. They then head to their car and leave. You try to take their license plate number. Oh wait it says "tag applied for". Criminals regularly take the plates off when they do their work, if a cop pulls them over, they can say some story about how they needed to get it reattached, and no cop pulls over a car just because of a "tag applied for" sign because they know it will likely be just that 9 times out of 10, so if they did pull over that car its some other ticket-able offense, but no registration wont be likely part of that ticket. Maybe you got a picture of their face? Except everyone wears masks now....
      - frosted-flakes 5y ago
        What is a "tag-applied for" sign? Some sort of temporary licence plate? In Ontario, temporary registration is a normal licence plate with a "T" registration sticker, instead of an annual sticker.
- ipaddr 5y ago
  How many of them are over $500.00? Check those first.
- michaelt 5y ago
  > Because the amount of labor cost to ensure it's accurate at all times would be a silly use of scarce resources. I'm no MBA, but if a single store is losing $800,000 of merchandise a year from a single aisle, you could have it guarded 24/7 by guys on $50 an hour and you'd still come out $300k ahead. Far more likely IMHO is that when the rep said "over $800k of merchandise had disappeared from that aisle" that was actually the loss from all the yard equipment aisles in all stores nationwide.
  - matheweis 5y ago
    Well those chainsaws were worth $300 ... that's $2400 in one model of chainsaw alone. I'd guess that's about average for prices of equipment in that aisle, with several hundred different items (mowers, weed eaters, blowers, etc.) If they are having $2400 worth of a single model walk in a year, over 350 different items, they'd get to over $800k in the one store in a heartbeat. My money would be on this was in fact just the one store, if not just the one aisle.
CPLX 5y ago
Why do people think giant multi-billion dollar stores have "insurance" for shoplifting of various items of merchandise? How would such a policy even work, how would you price and underwrite it, and evaluate risk? How would claims be processed? Is there any evidence anywhere that this is actually a thing?
- sandworm101 5y ago
  At these sizes, insurance is more about taxation than cost recovery. Even of they are effectively self-insured, Home Depo does indeed have an interest in documenting all losses.
  - mindslight 5y ago
    Are we sure that Home Depot has already paid for the items sitting on the shelves? I've seen them do so many returns by marking things Return To Vendor. Margins these days seem to be based around branding/design/quality control rather than sunk production cost, and I'd imagine that retail stores have optimized things so that they aren't assuming the full wholesale-cost risk of theft/damage/clearance.
    - orthoxerox 5y ago
      Depends on how long the item has been sitting on that shelf. They usually factor their invoices to attract suppliers, so they pay their factoring bank a few weeks after the item has been received.

retSava 5y ago

No implication of insiders imho - rarely do reps see exactly what is stolen and can -- that line item. Many stores do a (costly) stock inventory check once a year, literally going from shelf to shelf and counting what's there, then that is crosschecked and corrects the store inventory database.

deleted 5y ago
[deleted]

ethbr0 5y ago

A Home Depot has somewhere around 40,000 different products per store. The count is always wrong. It's continually updated, but it's still always wrong. Because the amount of labor cost to ensure it's accurate at all times would be a silly use of scarce resources. Sometimes it's as simple as a customer picking up an item, wandering around, and dropping it somewhere else. Sometimes it's theft. Sometimes it's an incorrect count in receiving. All of this is an average day at a warehouse store. Walmart deals with the same thing.

sandworm101 5y ago
Eight chainsaws? I dont think they are lying in the wrong aisle. Powertools and other high value items should be stock checked.
- ethbr0 5y ago
  How often? Daily? So ~15 minutes / 60 x ~360 days x ~2000 stores (US) x ~$30/hr ($20+benefits) = $5.4 M in labor costs ... and that's just to check chainsaws.
  - ipaddr 5y ago
    Knock the 30 dollars and benefits down to part time 15 an hour employees. We're down to 2 million.. let's select the 10% worst stores.. we are down to $200,000. They can check other inventory items and check out customers. Cheaper than a one second ad during the superbowl
    - ethbr0 5y ago
      > Knock the 30 dollars and benefits down to part time 15 an hour employees. So, you're encouraging a business to hire minimum wage labor and schedule so as to avoid paying benefits? And these people (you've just screwed) are the ones you're proposing be granted the responsibility to detect theft? > let's select the 10% worst stores Infeasible, as most theft by dollar is organized, which targets a somewhat random scattering of stores, intermittently. Highest shrink retail stores already have additional theft mitigation tech deployed. > They can check other inventory items and check out customers Not if they can't be in two places at once. 15 minutes is a fairly middle of the road estimate for: walking to the area, checking the on-shelf number, checking above the rack, and possibly checking the back. If anything, it's already under-estimating the time required.
      - cto_of_antifa 5y ago
        The solution is simple. Punish the employees
      - ipaddr 5y ago
        Yes.. or hire students not phds to do the inventory
  - Cycl0ps 5y ago
    Assume high value items are the majority of the thefts by value: $800'000 in thefts from that aisle * 51% for a (slim) majority * 2000 stores = $816M in shrinkage. If your store is seeing six figure losses due to theft you hire out some Loomis guys or rent-a-cops and park them at both entrances. That 800k number does seem to get quoted alot in the comments here, I wonder if it's an actual figure or just some part of a training video that sticks with people
- thrower123 5y ago
  Odds are good that they are physically in the store somewhere, but nobody knows where, because they are on a pallet on a shelf sixteen feet up in the air.
danuker 5y ago
> a silly use of scarce resources. When your losses are so bad, it's time to invest more in security. Accounting together with video evidence can more timely detect thieves, and might be worth it.
- repiret 5y ago
  Two points: 1. Unless store security catches the thief at the door, many police departments don’t have the resources to track them down. So finding out that you were burgled within a couple days isn’t much better than finding out at a quarterly or even annual inventory. 2. It’s not that big of a problem. From the article: “Organized retail crime costs retailers an average of $719,548 per $1 billion in sales”. Putting that in a more accessible scale, that’s 72¢ per $1,000 of sales.
  - namelessoracle 5y ago
    One point about 1. Even if Store Security DOES catch them at the door. What do you do when the person says "I dont care im taking this and going" and refuses to stop for the security person. The security person is not a cop, and is probably not the very expensive armed security that banks have. If the person calls their bluff not much can be done at that point. And thieves know this. They then head to their car and leave. You try to take their license plate number. Oh wait it says "tag applied for". Criminals regularly take the plates off when they do their work, if a cop pulls them over, they can say some story about how they needed to get it reattached, and no cop pulls over a car just because of a "tag applied for" sign because they know it will likely be just that 9 times out of 10, so if they did pull over that car its some other ticket-able offense, but no registration wont be likely part of that ticket. Maybe you got a picture of their face? Except everyone wears masks now....
    - frosted-flakes 5y ago
      What is a "tag-applied for" sign? Some sort of temporary licence plate? In Ontario, temporary registration is a normal licence plate with a "T" registration sticker, instead of an annual sticker.
ipaddr 5y ago
How many of them are over $500.00? Check those first.
michaelt 5y ago
> Because the amount of labor cost to ensure it's accurate at all times would be a silly use of scarce resources. I'm no MBA, but if a single store is losing $800,000 of merchandise a year from a single aisle, you could have it guarded 24/7 by guys on $50 an hour and you'd still come out $300k ahead. Far more likely IMHO is that when the rep said "over $800k of merchandise had disappeared from that aisle" that was actually the loss from all the yard equipment aisles in all stores nationwide.
- matheweis 5y ago
  Well those chainsaws were worth $300 ... that's $2400 in one model of chainsaw alone. I'd guess that's about average for prices of equipment in that aisle, with several hundred different items (mowers, weed eaters, blowers, etc.) If they are having $2400 worth of a single model walk in a year, over 350 different items, they'd get to over $800k in the one store in a heartbeat. My money would be on this was in fact just the one store, if not just the one aisle.

CPLX 5y ago

Why do people think giant multi-billion dollar stores have "insurance" for shoplifting of various items of merchandise? How would such a policy even work, how would you price and underwrite it, and evaluate risk? How would claims be processed? Is there any evidence anywhere that this is actually a thing?

sandworm101 5y ago
At these sizes, insurance is more about taxation than cost recovery. Even of they are effectively self-insured, Home Depo does indeed have an interest in documenting all losses.
- mindslight 5y ago
  Are we sure that Home Depot has already paid for the items sitting on the shelves? I've seen them do so many returns by marking things Return To Vendor. Margins these days seem to be based around branding/design/quality control rather than sunk production cost, and I'd imagine that retail stores have optimized things so that they aren't assuming the full wholesale-cost risk of theft/damage/clearance.
  - orthoxerox 5y ago
    Depends on how long the item has been sitting on that shelf. They usually factor their invoices to attract suppliers, so they pay their factoring bank a few weeks after the item has been received.