Jump in Shoplifting Hurt Penney
Wall Street Journal (11/20/13) Kapner, Suzanne
J.C. Penney Chief Executive Mike Ullman said Wednesday that shoplifting at his company's stores spiked in the third quarter, taking a full percentage point off the chain's profit margins. The increase in shoplifting has been attributed to several factors, including the transition to a new inventory tracking system that used radio frequency identification (RFID) tags. It was hoped that the RFID tags would make it easier to manage inventory, though the company found that it had to remove the security sensor tags that are designed to prevent the theft of merchandise as they would have interfered with the radio frequency tags. During this transition, Penney also introduced a new return policy that did not require customers to have their receipts. However, this combination of changes resulted in people entering the store, grabbing armloads of merchandise, taking them to a cash register and returning them, said a person familiar with the issue. In January, Penney scaled back its RFID ambitions, due to increasing thefts. The company has also begun retagging items with the anti-theft sensor tags and has altered its return policy so that customers only receive store credit if they return goods without a receipt and cannot provide the credit card used to make the original purchase.
