Leverage the power of RFID for loss prevention

EAS: From Visual Deterrent to Hidden Observer

May 27 2021

As a retailer, if you didn’t have a proper security system at the beginning of this century, you could count on theft happening in your stores. Electronic Article Surveillance (EAS) has been a great way to combat thieves, i.e. leave the store without paying, and the alarms would go off. But as any other technology within the retail space, EAS needs to adapt to new expectations. What new capabilities is EAS progressing towards?

From Apprehension to Deterrence

The first patent for an EAS system was registered in 1966. This first EAS system practically had the same setup that we know today: a pedestal at the exit of the store that could ‘read’ radiofrequency waves and would sound the alarm if a white, plastic tag on a piece of clothing passed by.

Up until this moment, store owners had to be creative to apprehend shoplifters. As described in the book The Steal, A Cultural History of Shoplifting, ‘some stores hired off-duty cops to protect their merchandise. They would stand for hours inside “observation perches” - hollowed out pillars – peering through one-way mirrors watching for shoplifters.’

In the 1970s, retailers used EAS to apprehend shoplifters. As more and more large chains began to install EAS systems, the focus changed to deterrence rather than apprehension. Retailers began to recognize that it was more effective to stop shoplifters when attempting to steal, and they began to employ EAS more fully and completely.

As time progressed, EAS progressed too. Security hard tags became slimmer, easier to attach to various items. EAS pedestals fitted more and more within the ambience of the store. And when shoplifters started bringing along booster bags to block radiofrequency signals, we put metal detection in our antennas to detect those bags and prevent losses.

And today, EAS is evolving again to meet today’s expectations. There are several reasons for why the role of EAS is changing.

In the early 1970s, Nedap stood at the beginning of systems for electronic shoplifting detection. Nedap was also one of the first companies to develop practical applications for RFID, now used in the iD Top: our concealed EAS system. Can you spot them in the picture on the right?

The Detachment of Hard Tags: a Barrier to Omnichannel

One of the key elements in an effective EAS setup is the security tag on the items that you want to protect. And for good reason: evidence suggest that visible security tags tend to be associated with greater reductions in shrinkage.

But the cons are starting to outweigh those pros. The security hard tag becomes more of an omnichannel annoyance than the visual deterrence it used to be. Consumers nowadays expect a seamless shopping experience: wherever they shop (online or in store), they expect fast and frictionless checkouts. Hard tags stand in the way of offering a seamless shopping experience. Having to remove a security tag from one or multiple items during the checkout process can cause long queues, slow down omnichannel processes such as picking up orders for in-store fulfillments and can create dangerous situations at self-checkout stations.

Rise of Organized Retail Crime

The rise of Organized Retail Crime (ORC) in the US is a catalyst to rethink the role of EAS. An occasional shoplifter might be stopped by setting off an alarm, but an ORC booster doesn’t care if he sets off an alarm or not. And given the aggressive attitude of most ORC rings, it is often not desirable to apprehend these thieves.

Also read: this EAS technology helps LP/AP managers to combat the ORC surge

A Broader Scope For Loss Prevention

Loss prevention is traditionally centered around theft in stores. But as retailers embrace an omnichannel approach to serve their customers better, losses and shrinkage are not limited to the store alone. Losses can occur anywhere in the supply chain: from vendor fraud occurring in distribution centers to items that were shipped from store, but never arrived at the consumer (‘last mile loss prevention’).

Similarly, the mindset for many loss prevention departments is changing, too. Today’s LP/AP managers see their role as not only preventing losses, but also combating profit erosion. Profit erosion occurs due to out-of-stocks or overstocking, leading to all kinds of risks and costs. Therefore, ensuring inventory accuracy, coupled with protecting inventory from theft and fraud, is the way forward for loss prevention.

The objective for EAS is clear: help to improve inventory accuracy by protecting inventory from theft and fraud, without causing any friction that affects the shoppers’ experience. Sounds ambitious? There are retailers that already have this kind of EAS in place. Their strategy? Empowering their EAS with RFID technology to capture item level data.

The Future of EAS is Item Level Data

Radio-frequency identification (RFID) technology elevates your EAS system to meet these high expectations. Where traditional RF/AM EAS systems only alarm on active labels or tags, RFID creates a layer of identification (hence the ID in RFID) to help you detect items individually. In fact, according to McKinsey & Company, RFID has the power to unlock up to 5 percent top-line growth from better stockout management and shrinkage reduction as well as to achieve a 10–15 percent reduction in inventory-related labor hours.

Observing exactly which items are leaving your store, whether paid for or not, gives LP/AP an enormous business intelligence boost. It allows you to see that one high value theft event in the giant haystack of other alarms. You can notify store associates, guards, or even neighboring stores when a specific theft event occurred. Having item level insights prevents sweethearting, combats return fraud and gives you the ability to replenish stolen items the same day, instead of waiting for the next inventory count.

And these are just some of the actions you can take in the short term. In the long term, you can observe patterns in the data, enabling you to make better security decisions. Which are the high theft items? Which stores need more security training, guard planning or other security measures? These questions can now be answered, based on data and business insights.

Seamlessly Secured

But RFID powered EAS doesn’t stop at protecting your inventory against theft and fraud. This true and tested technology also allows retailers to offer seamless shopping experiences.

This better experience starts at the entrance of your store. RFID doesn’t need a detection field between two antennas, which brings up the possibility of a hidden EAS antenna hanging from the ceiling. Such an EAS antenna is a good-looking alternative to traditional EAS pedestals. A concealed EAS antenna creates welcoming and open entrances, allowing for more space to show off your merchandise.

And remember the hard tag? RFID protects your merchandise just as well. In fact, it’s not uncommon that retailers tag their whole inventory with RFID labels, meaning your whole inventory is now 100% secured. Security hard tags can now be used more effectively; based on your data, you can add additional security hard tags to the items that have a higher likelihood of being shoplifted. This will not only enhance your shoppers’ in-store experience, as you can now offer more flexible checkouts, it also saves you money on hard tagging expenses.

When the first EAS system was designed, security managers no longer had to hide in hollow columns to be on the lookout for shoplifters.

With RFID, you are no longer limited to beeping sounds and flashing lights to catch thieves but can take full advantage of all the modern technology that is available today.