The Importance of Visual Situational Cues and Difficulty of Removal in Creating Deterrence: The Limitations of Electronic Article Surveillance Source Tagging in the Retail Environment

Abstract

Shrinkage continues to be a considerable cost to the retail industry, with a recent estimate suggesting that globally it could be as much as $278 billion a year. In addition, it is a problem that has proved difficult to resolve, despite billions of dollars of investment every year in new technologies by loss-prevention practitioners. A relatively common approach to try to reduce the extent of the problem has been the application of electronic article surveillance tags to retail products, either in the form of a soft tag (increasingly applied at the point of manufacture) or a hard tag (usually applied in the store) to deter and detect shop thieves. This study looked at the experience of one retail company that decided to switch one of its divisions from using hard tags to source-applied soft tags on clothing sold in its stores. The results were dramatic, with a 250% increase in shrinkage after 12 months in the stores with the new source tag compared with existing stores using hard tags. The study raises important questions about the importance of creating visibility and the relative difficulty of removing the tag when using security devices if deterrence is to be achieved in retail stores and the overall cost effectiveness of using source tagging as a means to reduce shrinkage.

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