Building Kirkland’s Loss Prevention Program

Founded in 1966 by its namesake Carl Kirkland, Kirkland’s admittedly fills an odd niche in the retail world, although it has become more mainstream as the decades have passed. Carl Kirkland’s vision originated in Jackson, Tennessee, with a single store that sold items meant to be gifted. For 20 years, the store lineup stayed more or less the same—to wit, a 1979 catalog bore the slogan, “We sell everything from fruit to nuts,” its cover depicting a tin of candy, a jar of almonds, a plush toy turkey, and a plastic thermometer—eclectic, to say the least.

In the early 1980s, as Kirkland’s expanded, it began to grow its repertoire of products, venturing further into home décor item sales, while still maintaining a supply of “giftable” items.

The lay of the land where it pertains to a loss prevention program at Kirkland’s is fairly typical of a company that was founded by a single individual, and then saw expansion in fits and starts over the years; namely, not much thought was given to loss prevention until its director of LP, Bill McParland, joined the company in 2002.

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“My initial field visits found that while the stores had dedicated procedures in place to try to control theft, the field was lacking the core understanding and focus of loss prevention,” said McParland. He is a career loss prevention professional, having held senior positions in LP at such companies as Payless Shoe Source and G&G Shops, and he also holds a bachelor of science in law and justice for good measure. “When I started at Kirkland’s, we had exactly one auditor and one admin person working loss prevention. We didn’t have a strong loss prevention program,” said McParland.

Mall Exodus

Bill McParland
Bill McParland

A big reason that Kirkland’s began to take a more serious look at loss prevention is that in 2005, it slowly began to detach itself from its roots as an exclusively mall-based operation. Up until that time, Kirkland’s had about 200 stores, with 95 percent of them located inside malls, primarily in the Southeast.

Much of Kirkland’s original loss prevention methods relied on the mall itself to safeguard its operation. Malls provide a measure of security for tenants; they are well lit, indoors, usually have robust security measures, and more or less allow the tenant to hang their LP hat on whatever the mall is doing. Kirkland’s chief financial officer, Mike Madden, mused on the subject of Kirkland’s early mall days: “Malls provided us with lots of security, but you pay for it, and some malls are better equipped than others.”

“We started realizing that our customers were coming to visit us. The casual mall walker no longer drove our business. We had become a destination shop,” said McParland of the decision to begin ushering in new off-mall locations. Quite simply, Kirkland’s collectively woke up one day and realized that they had their own following of loyal customers; ones who weren’t tied to impulse buying or random shoppers walking through a mall. They decided to slowly detach from the mall experience.

“As we started selling larger home décor items, it began to be impractical for Kirkland’s to display the items in a small store footprint and for customers to wheel those items through a mall to get to their cars. We decided that more off-mall stores were the answer. Our customers didn’t want to walk through a mall to find us, or park a half a mile away.”

McParland found himself at the lfoss prevention helm of a company that was not only radically changing its product line, but also reinventing itself location-wise. No longer could Kirkland’s rely on the security of a mall; they had to look after themselves. “We had to beef up security due to the fact that we were now in standalone locations,” said Madden. “You’re self-contained. You have to deal with that.”

As of 2013, Kirkland’s had 320 stores spread across 34 states, and a full 282 of them were off-mall locations, meaning that Kirkland’s is very much in charge of its own security—and destiny—at this point.

Loss Prevention Program Challenges

One would think that home décor items wouldn’t necessarily represent an appealing target for the casual thief or especially organized retail criminals,Kirklands but that isn’t really the case. “That’s a common misconception,” said McParland. “Twenty-five percent of our store items are framed items, such as art or mirrors, with a price point between $40-200. They go missing two to four at a time.”

The company recognizes that this sort of pilferage is simply a part of retail business and doesn’t let it get in the way of the customer experience that Kirkland’s strives to create. McParland doesn’t believe in an overbearing security presence within the stores. “We sell products that people want, not products that people need,” he explained. “We want to make every store experience special for the customer. The last thing we want to do is hamper our store teams.”

McParland saw a demonstrable shift in pilferage that closely paralleled Kirkland’s inventory transformation. In the past, Kirkland’s mainly sold lower-cost gift items. Today, the stores are filled with high-end pieces of furniture and décor items that can cost $500 or more, which changes the loss prevention landscape and the potential losses.

In 2010, McParland decided to implement a store-wide CCTV program. At the same time, he decided that technology such as RFID wouldn’t really work for a store like Kirkland’s, simply because of the uniqueness of the product they sell and the way the stores operate with constant shifting of their product offering throughout the store. “We don’t hold product for a long time, and our store setups are fluid,” stated McParland.

Kirkland’s has had its share of employee theft and the challenges associated therein. Once again, because of Kirkland’s home décor specialty, certain theft scenarios occur that are peculiar to such a store. McParland described a thwarted theft ring in some of Kirkland’s stores, wherein a group of employees were regularly propositioning customers to purchase goods on a cash basis, essentially removing the register from the equation. “People often come to Kirkland’s to decorate an entire room or home. We had some employees who would try to make them a cash deal on product they were after,” he said. Thankfully, in some of those cases, the employees were exposed by Kirkland’s own loyal customers, who felt ill at ease giving cash directly to sales employees and not receiving a receipt.

McParland has also had to deal with the occasional fencing of Kirkland’s products. “Employees have been found taking products out of the store, hiding them in storage units, and then selling them at flea markets or other small mom-and-pop shops that either they or friends may own,” said McParland. “Our customers or other alert employees have actually reported these items for sale.” Once again, this demonstrates the integrity and loyalty of your average Kirkland’s shopper or store teams. The LP team also regularly monitors Internet sales of their products on sites like eBay and Kirkland's 2Amazon, keeping a close eye on the resale of all things Kirkland’s.

Risk Management

The average Kirkland’s employee is exposed to a potential myriad of safety considerations. “We sell heavy items, glass items, and other merchandise that can hurt employees,” said McParland. “We’ve had numerous 40-pound items, with additional new items hitting the stores weighing up to 100 pounds or more.” This risk explains why a major thrust of the loss prevention program deals with workplace safety. Kirkland’s store employees aren’t dedicated cashiers, stockroom workers, or retail salespeople. All employees are expected to move items, assist in customer carry-outs, and reset the stores, often on a daily basis, which exposes them to all sorts of potential injuries.

McParland’s team implemented a comprehensive employee training program, making sure that each employee knows how to properly lift heavy items, handle broken or sharp items, and use proper ladder techniques, thus setting policy for company safety in general.

It’s easy to see why things like theft and ORC are primary concerns, but are not the sole focus of Kirkland’s loss prevention program. “A picture frame may cost $19.99, but it’s a six-figure claim when someone falls off a ladder trying to retrieve that single frame,” explained McParland. “Ten internal theft cases don’t even approach the financial loss possibility of one severe workers’ comp claim.”

Following this line of reasoning, McParland confessed that his CCTV rollout was as much for store employee and customer safety as it was for guarding merchandise and robbery deterrence. Accidents or mishaps can now be examined in excruciating detail to both determine their cause as well as ensure that action is taken to prevent it from happening again.

Future Vision

On the one hand, Kirkland’s growth presents a range of challenges to its LP team, mostly because Kirkland’s isn’t so much growing as it is transforming. The average refund-fraud case is a several-thousand-dollar event today rather than a several-hundred-dollar event 15 years ago. This is not so much because the crooks are smarter (they aren’t), but because the average ticket item of the product Kirkland’s sells is much higher than it was years ago.

The LP team has kept pace with it all, charged with a mission to relentlessly educate Kirkland’s employees, which ultimately brings everyone in as a loss prevention partner, shattering the old adversarial “us-versus-them” LP mentality. There are no cops-and-robbers-style loss prevention tactics at work at Kirkland’s; only a dedicated team of seasoned trainers who share the most important weapon they have—their knowledge—with Kirkland’s employees. “We’re all in this together,” stated McParland, succinctly painting a picture of his loss prevention and risk management vision.

This article was originally published in 2013 and was updated April 28, 2016.

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