Globally, businesses are under attack, and the cost of retail theft is crippling–forcing long-established companies to close their doors.
Business Insider recently reported the staggering cost of retail theft in the United States—a whopping $62 billion, a figure steadfastly increasing annually.
And it’s not just the public you need to keep an eye on, with employee theft rising exponentially year on year. With so many retailers under the constant strain of inventory shrinkage, many turn to technological solutions to curb losses.
What can retailers do to stop product shrinkage?
It is possible to address retail crime in several ways—introducing security measures like artificial intelligence video systems, credit card fraud detection, inventory controls, and security tags on a variety of merchandise.
Since the introduction of RFID technology, would-be thieves have been actively trying to defeat it with a variant degree of success. Fortunately, ongoing research and development have made significant technological changes in stamping out efforts to bypass shoplifter efforts.
Let’s take a look at how RFID technology is helping businesses, new and old, overcome inventory shrinkage and boost retail security by implementing security tags as their anti-theft initiative.
What is RFID technology?
Radio Frequency Identification Technology was introduced in 1994 by Motorola Inc. as an alternative for barcode scanning systems. It uses radio waves instead of light or sound to identify objects. The first generation of this system used low-frequency electromagnetic fields capable of penetrating up to 1 metre into solid materials such as wood, concrete, metal, plastic and glass.
Due to the low-frequency signal, the system had limited range and could not read through the packaging material.
Over the last two decades, RFID tag technology has undergone significant change. Today, most tags feature an RFID chip technology that is interchangeable with all major EAS brands—due to its high-detection field; the technology is now available in a broader range of applications.
How do RFID readers work?
RFID (Radio Frequency Identification) reader consists of several components: a power supply, control circuitry, data storage, reader, transponder, and antennas. A small antenna inside the reader sends out signals which activate the transponder when they come close enough together.
There are three primary tag-types;
- Passive—tags receive power from the RFID reader to send back a response.
- Semi-passive—tags have an internal power source and rely on the RFID reader to provide power to transmit a response back to the reader.
- Active—tags have an internal power source to send and receive responses to the reader.
Active RFID tags transmit information back to the RFID reader via modulated magnetic fluxes. Depending on the frequency band used, RFID has a range between 10cm and 100 metres.
The advantage of RFID technology is line-of-sight is not required; however, the communication distance depends on the strength of the received RF signal.
Strengths and weaknesses of security tags.
The benefits of security tags are their ability to lower the stock shrinkage significantly. Just the presence of security tags on clothing or apparel is a visual and physical deterrent, making them less desirable due to the potential for shoplifters to be caught. Without a detacher to remove the tags, the clothing has little value.
In the past, thieves have been able to bypass tag security by wrapping the tag in foil. The foil prevents the receiver from detecting the tag when an article passes through the security sensors.
Some thieves in possession of tag detachers will target stores using compatible tags or stores using tags they have successfully mastered the removal of tags using other methods.
Unfortunately, experience shoplifters have been able to escape the watchful eye of business owners—until now.
RFID technology in the apparel industry.
Advances in design, fastening technology, materials and lower production and implementation costs have started to turn the tide against shoplifters. A range of high-tech anti-theft solutions is now within the grasp of the majority of retailers.
For clothing retailers looking to purchase their first security tag system, it’s imperative to familiarise yourself with the leaders in the retail security industry and the various technological solutions available.
We recommend fully evaluating the pros and cons of each system and ask your vendor for a no-obligation trial for a week or two.
When taking the system through its paces, you’ll need to consider;
- Does the tag spoil the customer experience
- The tags weight and size
- Are the tags gentle on clothing
- What is the tags maximum detection range
- Are they easy to remove
- Vendor track record
- Customer satisfaction
Customer experience is an important consideration in the purchase cycle, so it’s crucial to gauge whether the tags impact unduly the fitting process. Heavy or oversized tags irritate and lower customer experience.
Be sure to examine any possible impact clothing tags has on your products by checking closely for damage or poor fitting.
The OMAC security tag is the result of decades of industry experience and innovation. Our vision was to create a tamperproof, durable clothing tag that stands up to the challenge of regular assault from would-be shoplifters. We are so confident our anti-theft solution is the best on the market we encourage prospective clients to try our 3-minute challenge to crack OMAC.
Security tags vs Smart Labels.
Both RFID tags and smart labels use the same technology and have minimalistic electronic circuitry in their design, but the similarities end there.
Smart labels are a one-use application, and although they provide greater flexibility in attaching them to packaging, they have less detection range and fewer features. Entry point pricing for RFID tags and smart labels is similar—however, the more sophisticated the tag technology, the greater the price tag.
The greatest advantage of active RFID tags is detection range—regular battery checks are required to ensure product security is not compromised.
Although passive tags and smart adhesive labels lack range, they are easier to maintain.
How bottle tags are changing liquor security.
Wine and spirits have always been suspectable to theft, relatively easy to conceal and difficult to tag by conventional measures. Unlike cheap liquor and wine caskets, theft of high-value wine and spirits poses a considerable problem to liquor stores. Favoured by shoplifters, unchecked and uncontrolled, theft of high-value liquor can lead to devastating effects on business profits.
Fortunately, OMAC has successfully solved the problem with a unique liquor cap. Just fasten the security bottle cap to your high-value spirits, and the tag will take care of the rest.
The unevasive and tamperproof design features an embedded RFID chip that works seamlessly with your shop sensors, warning you whenever a tagged bottle leaves your store.
Store owners using the technology report a significant drop in inventory shrinkage. The caps are available in several colours and can be customised to help increase store brand awareness.
Prevention versus stock loss.
There’s an old and often quoted proverb, “prevention is better than a cure”, and nothing could be more accurate when preventing stock losses.
Theft is a global concern that affects all businesses, regardless of industry and size; however, the most vulnerable are undoubtedly within the retail sector.
Theft is an unfortunate reality for most retail businesses—you can’t avoid being targeted by unscrupulous thieves. However, it is possible to reduce the impact, disruption, and financial loss your business suffers by implementing the right deterrents.
There is no one-suits-all approach to store security—the most cost-effective and proactive way to lower inventory loss is a preventative strategy. Do not wait for your business to become a victim of a targeted attack.
The benefits of an inventory control system.
Over recent years, the cost of introducing inventory control measures has become more affordable with the advent of integrated inventory control and barcoding into the majority of POS systems.
Inventory control makes it easier for staff to manage and monitor stock levels and shrinkage—combined with barcode scanning, it can help staff avoid POS sales errors and increase productivity.
The benefits of inventory control are;
- Reduce costs associated with lost or stolen goods.
- Increased customer satisfaction through better service delivery.
- Improve cash flow management.
- Easier compliance with government regulations and tax codes.
The good news is that every step you take to improve product security increases the efficiency of your store and enhances customer satisfaction.
Although technological changes have influenced how customers shop online, retail commerce plays a significant role in purchasing.
Online transactions cannot replace the retail customer experience that enables individuals a visual and physical way of evaluating a product, interacting with staff and walking out with their chosen item the same day.
When implementing any system into your retail store, consider the potential impact that system may have on the customer experience and their loyalty long-term.