Retail security gets EASier

Nov 1, 1998 12:00 PM, GEORGE PARTINGTON

Retailers find electronic article surveillance a sure way to reduce shrinkage and increase profits. Retail outlets are adding a new item near their glass-front entrances. It stands silent and steadfast, and it has the power to stop thieves. It is an electronic article surveillance (EAS) reader, and it is appearing at a store near you. Annual sales of Checkpoint's EAS products have been growing at a phenomenal 37 percent clip for the past five years, according to David McGoldrick, director of source tagging programs for the company. Dayton's, Kmart, Winn-Dixie, Eckerds, Blockbuster Music and Circuit City are some of the retailers now using EAS. EAS systems work by setting up an invisible field - either magnetic, acousto-magnetic, microwave or radio frequency (RF) - at a store's exit. The field is created by one or more pedestal-style devices, or readers, in front of an exit. Products carry tags that are detected by a corresponding reader. The tags are either removed or deactivated at the checkout line. When products with still-active tags enter the field, they cause an alarm, alerting store personnel of a potential theft. A major reason for increasing EAS use is that retailers have begun to look at reducing shrinkage - product loss that occurs through internal and external theft and product damage - as a means to increase profits. "Retail growth has not come through an increasing population; it has come by gaining share from other retailers," notes Don Taylor, director of market planning for EAS supplier Sensormatic. "There comes a point of diminishing returns, and you have to look at other parts of your business (such as controlling shrinkage) to increase profitability." Reducing shrinkage lowers operating costs, providing better bottom line results. As EAS demand picks up, so does technological innovation; tags are more versatile and readers more reliable, says Read Hayes, a senior consultant for Loss Prevention Specialists. Tags are now smaller in length, width and depth. Radio frequency tags were the first to become miniaturized, says Hayes. They are now paper-thin and can be applied as a pressure-sensitive label, according to McGoldrick. Today's typical acousto-magnetic tag is 13/4 inches long, 3/4 inch wide and 1/16 inch deep. The micro-magnetic tag, offered by Sentry Technology Corp. as part of the Knoscape Micro-Magnetic System, is 21/2 inches long and paper-thin. The system is suitable for protecting books, CDs and videos, says Sentry Technology. Another example of improving technology is a self-recalibrating electromagnetic reader from ID Systems. "Normally, you have to get a service technician to readjust the system if you have changed the environment," says ID systems marketing coordinator Valerie Piva. The ID Systems reader will check all antennas to make sure they are synchronized; users simply turn it off, wait a minute, and turn it back on, says Piva.The "snowball" effect also has more retailers turning to EAS, says Piva. "When one store buys an EAS system, the store next to them inherits the shoplifters," she says. That is the goal of EAS - to make it so difficult to steal that thieves go elsewhere. The dramatic expansion of the market in the past 5 to 10 years attests to the ability of EAS to meet the goal. Loss prevention directors can argue to replace old systems on the grounds they have paid for themselves several times over, notes Hayes. But EAS is not a complete solution, and no EAS system is 100 percent effective, says Checkpoint's McGoldrick. "It is a tool that works with other tools such as CCTV, guards and vigilance programs," he says. Signage, too, is important because it reinforces the deterrent, according to Hayes. "The retailer's primary objective is to reduce criminal events on the front end," he says. Retailers need to alert potential thieves through signage that items are protected by EAS. Further, the threat of capture should be credible, says Hayes. It must be established that the tag will set off an alarm, store personnel will respond and the store will prosecute. "The more prevention of criminal incidents, the better," Hayes notes. "Everything flows from prevention. If we have an attempt, we have potential loss, violence, injury, death, public relations problems and liability."

The first wave Consumers first experienced EAS technology more than 30 years ago, when magnetic tags, called "Frisbee tags" because of their shape and size, were affixed to expensive apparel items. The tag was cumbersome and could be detuned by a large mass of water, a person's body, for instance. Thieves soon learned to shield the device through simple means such as putting it under an armpit. Magnetic EAS has been a part of loss prevention at libraries for decades, and Checkpoint, which started out in 1969 by selling such systems, still offers magnetic readers for library retrofits. Magnetic systems account for 13 percent of the EAS systems in use, according to the 1997 National Retail Security Survey, conducted by Dr. Richard Hollinger of the University of Florida in conjunction with Loss Prevention Specialists for the National Retail Federation. Sensormatic also began as an EAS supplier. The company was founded in 1966 by Ron Assaf, a grocery store manager in Akron, Ohio, who tired of watching thieves run out the door with merchandise, according to Taylor. Assaf's new company began selling hard-plastic, microwave "gator" tags that clamped onto apparel merchandise. Microwave, still offered by Sensormatic, has since dwindled to a 19.4 percent market share. Acousto-magnetic EAS, Sensormatic's most popular EAS technology, enjoys a 30-percent share in the marketplace, according to the survey. The acousto-magnetic tag, also called a "Chicklet tag," has small pieces that vibrate upon contact with the reader field when the tag is active, causing an alarm. Radio frequency EAS, offered by Checkpoint, is second in the marketplace with a 24-percent share, according to the survey. The tag features a circuit that is tuned to the frequency of the readers. All Checkpoint readers use 8. 2 megahertz, says McGoldrick. Sensormatic and Checkpoint are the primary EAS competitors. "The dynamics of the market are fascinating in a way that equates with the cola wars," says Hayes. Acousto-magnetic and radio frequency systems have advantages and disadvantages. Large amounts of metal can affect the performance of radio frequency tags, which usually cannot be applied directly to metal. Acousto-magnetic tags can be applied to metal, says Piva. Radio frequency can cause non-theft alarms if something else within the frequency range, an employee access card for instance, enters the field, says Hayes. Read ranges also differ. Sensormatic's Pro-Max and Floor-Max systems cover 18 feet between two sensors. The Strata system from Checkpoint offers 9 feet of coverage from two sensors, 6 feet between readers and 3 feet on either side. The proximity needed for tag deactivation further differentiates the technologies. The range for acousto-magnetic deactivations is shorter than the 15 to 18 inches offered by radio frequency, according to McGoldrick. And, he points out, RF tags do not depend on a specific orientation when passing through the deactivation field, unlike other technologies. Piva says RF systems are well designed for clothing retailers due to the versatility of tag size, shape and style; she says the systems are about half the price of acousto-magnetic.

It starts with a tag For the EAS system to work, retailers' products must be tagged. Sensormatic and Checkpoint are working with suppliers to have their tags affixed before they arrive at the retail outlet, a practice known as source tagging. The rise of source tagging is making EAS even more attractive to retailers by eliminating the cost of labor needed for tagging. According to McGoldrick, manufacturers are incorporating the Checkpoint tag into their pricing label and into tear-resistant hang tags for garments. Checkpoint is also working with label manufacturers to integrate their tags with labels that adhere to products with curved surfaces. Sensormatic offers a woven EAS tag that can be sewn into garments. Both companies manufacture a small drop-in tag that may be inserted into vitamins and pharmaceuticals during manufacture. Unfortunately, the same retailers demanding source tagging also employ differing systems. Some suppliers are source tagging with acousto-magnetic tags and some with RF tags. "I don't think there will be a single-technology answer to source tagging in the foreseeable future," says Taylor. "There are too many retailers with investments in different technologies." Consequently, EAS suppliers are finding new ways to reduce the labor associated with applying tags. In grocery stores, Sensormatic's tag can be incorporated into the weighing and pricing label of fresh meat products, and the company offers a pricing-gun-like tag applicator for other products. Further innovations in EAS include tag deactivation at the point of price scanning. Checkpoint has agreements with more than 40 scanning manufacturers to imbed its radio frequency deactivation device into the price scanner, according to McGoldrick. When a price is scanned, the EAS tag is automatically deactivated, which eliminates employee theft through "sweethearting" - when employees allow others to go through their checkout line without paying for all of their merchandise. If the cashier does not ring up the item, its EAS tag remains active and will cause an alarm at the exit. Sensormatic offers deactivation devices for stationing at the point of price scanning and a pad, the Double Checker, that signals if a live tag is present upon contact. Whatever the system, EAS is a powerful tool for reducing losses, and one many retailers cannot do without, as illustrated by the experience of an HMV music store at a Canadian mall, as related by Piva. The store opened with a 30-foot frontage, Piva says, and had decided to forego an EAS system. Not long after opening, however, management found that they could not keep tabs on their large display area and entrance. "Within a month, that open area was barred off, and they put in a couple of dual-aisle systems," says Piva.

Ink tags deny thieves benefit of their labors

Increasingly, the retail sector is embracing benefit-denial devices to supplement electronic article surveillance (EAS), CCTV and personnel training. The most common is the ink tag, which is usually attached to expensive designer clothing. If the tag is removed before deactivation or without a special tool, it will emit ink. It works on the same principle as the dye packs included in bags of money handed over to bank robbers - the ink renders stolen goods useless. Don Taylor, director of market planning for Sensormatic, calls ink tags a niche product, but says use is growing steadily. Most EAS manufacturers offer ink tags. "Ink tags attack the person's motive - what they want to use the item for. You cannot sell it or wear it or return it for a refund," says Read Hayes, senior consultant for Loss Prevention Specialists. "EAS is designed to increase a thief's sense of risk. I am seeing retailers put the two (EAS and ink tags) together on one high-risk garment." Other benefit-denial devices crack sunglasses and rip items such as wallets, belts and ties if not removed or deactivated properly, according to Hayes.

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