Undercover Loss Prevention vs. Visible LP: Has the Debate Changed?

One study finds visible security reduces shrinkage better—but the use of undercover loss prevention / plainclothes agents is the strategy that is growing.

undercover loss prevention

Writing on the issue of store detectives and loss prevention several years ago, Read Hayes, Ph.D., CPP, director of the Loss Prevention Research Council, outlined a critical issue that all LP leaders face. “The question for senior loss prevention decision-makers is whether having their detectives stand at the store entrance/exit overtly identified as a member of loss prevention staff prevents more theft attempts than does apprehending shop thieves after covertly observing their theft activities,” he wrote.

One recent study took aim at that question. It’s only one analysis, of a single Brooklyn retailer’s experience, but it found visible loss prevention agents reduced shrink better than undercover loss prevention agents do.

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The John Jay College of Criminal Justice thesis study compared two time periods at the retail store, one in which the store used a uniformed loss prevention agent and one in which it employed an undercover loss prevention agent. Data from the store’s loss prevention district manager included the rate of shrinkage, arrest numbers for the years in question, and other data.

After controlling for variables, it concluded that the deterrence impact of the uniformed agent was more significant than the higher number of merchandise recoveries made by the undercover agent. “This study found that uniformed LPA is a more effective loss prevention strategy for reducing the rate of shrinkage,” reports Rustam Zakirov, author of the July 2017 study, Comparative Study of Uniformed/Undercover Loss Prevention Agents in Reducing Shrinkage in Retail Businesses. The overall shrink differential between the two LP strategies was 5.4 percent.

Because the relative effectiveness of different types of LPAs will vary, especially in light of the security devices in play at a store location and type of retailer, the study suggests the need for retailers to test their own assumptions about what works.

The author also acknowledges that the study reflected only one store’s experience. “It is crucial for the retail store management to gather data on the effectiveness of security strategies being utilized,” it notes. “This will allow [examining] which style of security is appropriate for each retailer, as well as having a database that can be referred to.”

There have always been arguments for and against each type of security staffing strategy, explains Breck Ellison [shown], COO of Gallaher and Associates, a Tennessee security and safety company. “Retailers have discovered that each has its place and brings value to the table,” he told LP Magazine. “Uniformed or visible security personnel can provide peace of mind to shoppers that someone is there not only to protect them, but to offer support in a variety of ways such as giving directions or assisting with an issue.”

The peace of mind that visible officers may provide to shoppers is one reason that Goodwill Industries of Southeastern Wisconsin is looking to increase their use at the 60 retail locations in its territory, according to Paul Stone, CFE, LPC, vice president of security. LP agents rotate throughout the Goodwill territory’s retail locations, and Stone thinks that increasing their visibility may help improve customer satisfaction and retention and to prevent theft. “We’re looking at more visible security agents versus undercover agents, and having them there at critical times, to further stop ticket switching,” he said.

Ellison believes the public’s attitude toward overt security in retail has changed in recent years. “In years gone by, there were two strong camps—those who wanted to use visible security personnel as a deterrent, and those who preferred to have plainclothes security so as to not stand out and ‘scare’ customers,” he said. “There was a negative aura around visible or uniformed security personnel. People felt less safe, asking themselves ‘If this is a safe place, why do they need security?'”

Over time, however, shopper attitudes have shifted, according to Ellison. “People have become accustomed to seeing more visible security and to law enforcement presence. And as such aren’t as intimidated by it as they used to be.”

Still, plainclothes detectives continue to play a critical role in LP operations. Indeed, their use is growing, according to the results of the 2018 National Retail Security Survey by the National Retail Federation. Its survey of 63 retailers found that use of plainclothes store detectives increased to 30.2 percent from 22.2 percent in 2017. This, “while uniformed guards, fitting room attendants, and door greeters/receipt checkers dropped,” according to the NRF study.

With strong arguments in favor on both sides—identifiable security personnel are better able to direct response in an emergency; plainclothes detectives and undercover loss prevention can more easily follow individuals without risking accusations of racial targeting—the main function that officers are expected to serve should be the driving consideration in selecting a staffing model, advised Ellison.

“Uniformed security personnel can be a strong deterrent, giving customers peace of mind and another resource for staff to utilize. By definition plainclothes security personnel don’t draw unwanted attention and can provide security in a much more subtle way, allowing them to interact with customers more discreetly,” he explained. “I would encourage retailers to consider what the goals of having security personnel are before choosing a path forward.”

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