Savvy Retailers Find Value in New Benefit-Denial Technology

Sponsored by Avery Dennison

Benefit denial, which has a long history as an effective loss prevention strategy, is now taking an even more central role in stopping retail theft. Aided by advances in technology—Avery Dennison’s theft prevention labels are a case in point—retailers are increasingly finding value in keeping products available to customers while still deterring their theft and aiding investigations.

“The concept of benefit denial is something that we put out in the criminology literature about 17 years ago,” explained Read Hayes, Ph.D, CPP, director of the Loss Prevention Research Council (LPRC). He cited as an early example the use of ink tags, which discourage theft by staining garments if improperly removed, thereby making the garments less valuable for personal use and harder to convert to cash. Currently, retailers are extending the strategy to electronic products, permitting customers to interact with devices in-store but using software to deny use if stolen. “In these cases, if the product is not rung up correctly at the register, then it will not function properly,” said Hayes.

The most widespread application of benefit-denial strategy is the use of identifying labels on commonly stolen merchandise. “It’s a form of benefit denial because fences aren’t going to want to handle items with a unique identifier, and a thief isn’t going to want those labels on there if they are pulled over by police,” said Hayes. “So they’re going to go after products that are anonymous instead.”

While not a new concept, the value of product marking—and the return on investment it provides—has soared with new label technology. Avery Dennison Theft Deterrent and Recovery labels feature difficult-to-remove adhesives that work on a wide range of product material. “It’s difficult to remove, and even if you manage to [dislodge it], it will break apart and leave a residue behind,” explained Bob Glavin, vice president for innovation in Avery Dennison’s printer solutions division. Because it sharply curtails any value that can be derived from the stolen products, the mere presence of labels curbs theft. “Thieves quickly learn that it doesn’t pay to steal from that outlet, and they move on,” Glavin added.

Avery Dennison has a long history of working with partners to identify innovations that will yield the most value in the most applications, explained Glavin. Benefit denial is an area they’ve extensively researched. “We’ve discussed it with law enforcement and listen to customers, and then work with our supplies engineers, who have over 120-plus years of combined experience with various adhesives, to ensure that each retailer has the best theft deterrence and recovery solution for their products.”

The company, a worldwide leader in labeling technologies, even has labels that work on pints of ice cream. “We have a special way to manage the more challenging, specialty items, and we design different solutions for specific categories,” said Glavin. “But the common theme is that these labels are intended to be extremely hard to peel off and leave a residue—and so the thieves are going to walk next door instead.”

The quality of adhesive is critical to the ability of labels to deter organized retail crime gangs. “We did a study with real criminal offenders in which we continued to escalate the time and energy required to remove labels,” said Hayes. “For some outliers, it won’t matter—they don’t care how long it takes—but for most offenders, there was a tipping point where they perceived it as too much effort. The longer it takes to remove a label, the less likely thieves are going to try to steal from that place.”

Word can spread quickly among ORC thieves—something witnessed firsthand by Daniel Boutelle, assistant loss prevention director at Blain Supply, a family-owned retailer that operates 38 Blain’s Farm & Fleet stores throughout the Midwest. “We have seen a direct impact of labels depressing theft rates,” said Boutelle.

The retailer, already using cable locks, spider wraps, and EAS for theft prevention, was facing a challenge in its power tool product category two years ago. “We noticed some products were being sold online, and we wanted to identify if they were ours or someone else’s and what else we could use to stop theft. That’s when we launched into attaching Avery Dennison labels to power tools and batteries for power tools to ID them as ours, including the store number and location.” The results were immediate. “Once we started labeling those items, we pretty much killed the theft of those items from our stores,” Boutelle said.

It’s made a huge financial difference for the company. “When people were stealing those items, it wasn’t one or two; they were filling up a cart load of items, and out the door they went.” But when they realized the items were affixed with Avery Dennison labels—and knowing that the merchandise would require significant additional labor to ready it for resale—the thieves simply moved on. “Professional thieves like a clean package,” said Boutelle.

The ease of application of Avery Dennison labels multiplies their value, according to Boutelle. If theft trends suggest that a new product category has entered thieves’ crosshairs—as electronic dog collars did recently—it takes little time to apply store identification labels and extend benefit denial to those items. A hand-held labeler allows store associates to print and apply the label all in one motion, eliminating the need to touch the label and cutting labor, explains Glavin. “We’ve been able to cut the application time in half, and our studies show that you can label an item in two seconds on average.”

Hayes believes benefit denial is a particularly attractive solution because it allows for open marketing of high-theft products. Keeping products available to customers has been proven to increase sales. Additionally, in instances in which a thief is not deterred, having retailer and store identification on a stolen product aids investigations, either by strengthening criminal cases against fencing operations, which cuts into ORC operations, or by directly helping to catch criminals.

“We’ve had police departments call us because they have arrested someone, like in a traffic stop, who has our stuff,” said Boutelle. By using the identifying information on the labels, his investigators have then been able to dig into its surveillance video for proof of the person stealing from its stores, he said.

Boutelle says they also get calls from law enforcement if they find marked products in pawnshops or at flea markets. That information helps retail investigators identify which stores are being hit by thieves, the type of schemes they’re falling victim to, the extent of a fencing operation trafficking their products, and other information law enforcement needs to pursue a case. Moreover, if a retailer can show that they own products seized in an investigation, they can recover it and potentially make it available again for sale.

Avery Dennison labels fit neatly into the growing trend of using benefit denial as a critical layer in a holistic loss prevention strategy. “Product marking has been and continues to be a key part of asset protection,” according to Hayes. “These techniques work well—and they provide additional benefits for sales, tracking, and investigations.” He adds that research has been done all over the globe in an effort to test the effectiveness of product labels to deter theft, in Australia, Britain, and the United States. “They’ve all demonstrated the effectiveness of product marking,” he said.

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