Today’s loss prevention executives have access to a wider, more robust array of technologies. Along with the technology selection, the procurement process is changing at many retail chains. A recent LP Magazine survey found that while loss prevention executives remain the primary decision makers for LP-related purchases at 63%, procurement is emerging as a strong influencer. Both the quality and effectiveness of the technology as well as the cost to deploy now play a prominent role in the equation. What considerations should LP executives take into account when making technology decisions—especially when it comes to new versus used EAS solutions?
Catch up to the future of credit card fraud with our FREE Special Report, Credit Card Fraud Detection and Prevention: Lessons on Credit Card Skimming, e-Commerce Scams, and Theft Investigations right now!
For the first time in its 24-year history, the National Retail Security Survey, conducted by the University of Florida, found that external theft, which includes shoplifting and ORC, outpaced internal theft. In order to interpret this data, it is important to consider electronic article surveillance (EAS), a long-standing staple in many AP/LP programs.This technology is proven to be effective in countering external theft when there is a solid set of processes and procedures established behind it and adhered to at the store level.
Retailers have spent millions of dollars over the years to build and maintain their EAS infrastructure. Most embarked on a thorough vetting process before selecting the technology that worked best in their environment and best for their product mix before making a decision and deploying the systems, whether that be AM- or RF-based. Once the decision and investments were made, how do you ensure that you add some level of future-proofing to that decision? According to John Gantenbein, president of BSI, “That is when you should ask yourself whether buying new or pre-owned, certified systems and components makes the most sense. Both have their merits, and many times the answer is a combination of the two.”
Often retailers find themselves in the following situation. They have invested in a chain-wide implementation of a certain brand and model of EAS solution, and the original equipment manufacturer, for a variety of reasons, discontinues the model and subsequently the support of those systems. They could replace the infrastructure with newer technology, which comes with a fairly significant capital expenditure, or they could look for pre-owned, certified systems that meet the original specifications to supplement their existing investment. An important factor behind this decision is to ensure that these systems come with a warranty of their own. “While pre-owned systems typically do not fall under the capital investment category at most companies,” says Gantenbein, a veteran LP executive with Macy’s,“they can deliver significant savings and/or leverage your equipment budget and extend your ROI to the organization.”
Another area where pre-owned, certified or repaired/refurbished components may make sense is in the area of accessories to the existing technology, such as tags, deactivators or detachers. Remember to look for a guarantee that these components will work with your current EAS systems with the same level of performance as new ones.
What about the case for new equipment purchases and the factors behind those decisions? “The first question to ask is whether a capital budget is approved for switching out the existing infrastructure for new technology,” recommends Gatenbein. “One factor to be considered might be the need for advanced features available in newer technologies to support your company’s strategic and tactical plans. Another option may be to implement a phased approach between new and certified, pre-owned systems.”As new stores are opened or existing ones renovated, new models of EAS solutions that are compatible with the existing infrastructure can be deployed as long as the other components of the EAS system are compatible as well, particularly as it relates to tags and labels.
Another option that is available to retailers and often times overlooked is the ability to refurbish their existing inventory and warehouse it until needed at the next location. It is not uncommon for companies to close or re-locate stores to remain competitive. For those retailers who do not perceive the need to hold the used equipment in inventory, some companies will also offer to buy back the EAS inventory or trade it in for newer systems. This is just one more way that retailers can extend the investment they made years earlier and helps the overall industry access legacy solutions that could complement their existing infrastructure.
Today’s retail security and loss prevention executives have a number of EAS technology options that were not available in the past, and all are worth a closer look before deciding which path best suits the retailer’s individual needs.