Flash mob thefts in stores raise security and risk management concerns

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Retailers worried about the recent wave of flash mobs invading high-end stores and stealing thousands of dollars worth of merchandise can take practical steps to minimize the risk, experts say.

Goods stolen in raids are likely to be covered by policyholders’ property insurance, but losses may fall under companies’ self-insured retentions.

Recent “smash and grab” thefts have been reported in northern and southern California, Chicago and Minneapolis, among other places.

In a Nov. 20 incident in Walnut Creek, California, some 80 people arrived in about 25 cars, many without license plates, and ransacked a large Nordstrom store.

Two employees were assaulted and another was pepper sprayed, according to news reports. Three people were later arrested and charged with theft and conspiracy.

Bryan Paarmann, head of intelligence and operations at Brosnan Risk Consultants, a New York-based security services firm, said most of the goods stolen in such raids are posted on the internet to be resold at discounted prices.

While organized retail crime has a long history, the latest incidents are “a new wrinkle,” said Rachel Michelin, president and CEO of the Sacramento-based California Retailers Association. “It’s something we’ve never seen before.”

Rich Rossman, a Broward County Sheriff’s Office sergeant who serves as vice president of the Coalition of Law Enforcement and Retailers in Fort Lauderdale, Fla., said criminals “use fear and intimidation to appropriate property”.

“These flash mobs have happened in the past, but not to the point where they’ve just grown bolder,” and they’re getting more and more violent, he said.

“The best plan is prevention,” said Mike Bugielski, a Glendale, Calif.-based senior risk control consultant and regional vice president of Arthur J. Gallagher & Co. Retailers should have “a procedural plan of thoughtful proactive emergency that they often review,” he said.

According to experts, it is important to establish close working relationships with local police services. “It’s really going to take a public-private partnership to deter that,” Paarmann said.

Additionally, retailers with both risk managers and loss prevention directors “need to work together closely,” Bugielski said. And businesses should develop or revise emergency controls or procedures, including reviewing emergency lockdown procedures, he said.

“Most importantly, review security plans and procedures” with retailer security companies, Bugielski said.

Integrated security systems and controls on the doors are also useful. Brittain Ladd, a Dallas-based consultant, suggested retailers install padlocked security doors that can be locked remotely.

Criminals rely on quick entry and exit, so “anything that can slow down that process, even by a few seconds, will discourage them from trying to enter an establishment,” loss control specialist Thomas Franzoni said. based in Las Vegas for Alliant Insurance Services Inc. .

He suggested a two-door system, where people first enter a small hall before entering a second interior door.

Other possibilities include the installation of special films that prevent windows from being broken, the placement of bollards in front of doors and windows which will prevent cars from entering, and the installation of reinforced locks and grilles. on the doors after hours, Mr. Franzoni said.

He also suggested shelving big-ticket items, displaying empty boxes instead, and asking vendors to pick up the items when needed, or scattering those goods around the store.

Experts also recommend perimeter controls including, where possible, not allowing cars to park near gates to thwart the rapid escape of criminals.

However, curbside pickups from retailers also need to be considered, Bugielski said. “You want to make sure your parking lot or your loading area or your curbside pickup is safe.”

Retailers should also ensure that there is adequate lighting and surveillance cameras placed in key areas.

Bugielski, however, recommends against arming security guards with firearms, which he described as a “public relations nightmare for any retailer. … It’s just not safe. Any retailer considering arming guards “should check with their broker to make sure there are no armed exclusions in the police,” he said.

Retailers have property coverage for theft, but in a hardening market, underwriters are looking at coverage much more closely, he said.

Brett Borelli, senior vice president of Alliant’s New York-based real estate group, said the value of the stolen property, which in some cases is around $100,000, is likely at or just above the self-insured retentions from retailers.

Self-insured retentions can be a problem for retailers that aren’t large, publicly traded companies, said policyholder attorney Peter S. Selvin, partner at Ervin Cohen & Jessup LLP in Los Angeles.

“It’s an unreimbursed expense that will have its own effect” on the sustainability of these retail operations, he said.

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