A Word I Hate To Use…

     …is slowly but inexorably forcing its way into my vocabulary. And no, it’s not should.

     Let’s spend a few moments on the incentive structure of retailing. For simplicity, let’s focus on a merchant who buys all his stock-in-trade from others, and attempts to sell it at a profit sufficient to be worth his while. Let’s call our hypothetical retailer Smith.

     Smith’s fundamentals fall into a small number of categories:

1. Wholesale costs of stock;
2. Retail prices of stock;
3. Overhead costs (i.e., costs of operation);
4. What return Smith deems an acceptable return for his time and labor.

     Even a retailer who sells only one kind of one item must reckon up all four of those considerations. Smith will do his best to know those four numbers as accurately as possible. A significant error in any of them could put him out of business.

     If Smith is a “brick-and-mortar” retailer, he’ll be particularly sensitive to overhead costs. Those include such mundane components as storefront rent, utilities, contracted services (e.g., someone to clean the place every so often), government permits and fees…and “shrinkage.” That last term is one that makes Smith scowl. “Shrinkage” is retailers’ jargon term for stock that cannot be sold. It must be paid for, like everything in Smith’s store, but before he can sell it, thus defraying the price he paid for it, it…vanishes.

     The usual reason for shrinkage is theft. Shoplifting. While Smith can write it off on his commercial tax returns, that only partly salves the wound. It’s very hard to estimate it beforehand – and afterward, there’s little to nothing Smith can do about it.

     Smith can take certain steps to discourage shoplifting, but each of them comes at a cost. Some of the measures in use today:

• Security guards;
• Closed-circuit TV systems;
• Anti-theft RFID tags and door sensors for them;
• Stock protected by locked cases that must be opened by Smith or his employee;
• Remotely controlled dual-door systems that create a confinement space for entering customers.

     Smith must confront each measure’s cost and determine what it will do to his business overall before deciding whether to embrace it. Some of the costs could come in reduced good will from Smith’s customers, including losing their trade to competitors.

     No anti-theft measure is indefeasible. All of them will fall to a sufficiently determined thief. The thief who defeats all the prevention measures will be deterred only by his personal estimate of whether the justice system will catch him and call him to account…and that, Smith can do nothing to control.

     Some municipalities have thrown away the very possibility of bringing retail shoplifters to justice. The consequences have been appalling:

     [Organized Retail Crime] is prompting retailers to permanently shut down stores all over the nation. Right now, retail theft is happening from coast to coast on a scale that we have never seen in our entire history. Marauding bands of looters are barging into stores, grabbing as much merchandise as they can possibly carry, and then loading it into their vehicles. Online marketplaces make it easier than ever to turn stolen goods into cash, and at this point organized retail crime has become a multi-billion dollar business. As I have repeatedly warned my readers, America is descending into lawlessness. The thin veneer of civilization that we all depend upon on a daily basis is rapidly disappearing, and if we stay on this path our society will soon be completely unrecognizable.

     Smith, however he might try, could not do anything about an organized, well equipped gang of marauding thieves should it select his store to loot. Neither could Target or Walmart. All a victimized retailer could hope for is vigorous investigation, pursuit, and prosecution of such a gang…and several large municipalities decline to do so.

     And you thought porch package thieves are bad.

     The number of Americans who acquire everything they ever need or want through their own labor is small enough to be deemed negligible. Practically speaking, every one of us depends upon the ability to buy and sell without interference. But interference by criminals threatens that ability. Unwillingness among legislatures and prosecutors to act against such criminals magnifies the threat by removing the deterrence that would otherwise exist. And here at long last we come to the word I alluded to at the top:

     That retail commerce would suffer massively from the default of the justice system was inevitable, as the cited articles suggest. But that’s not the only inevitability. Others are already rearing their heads:

• Theft insurance is becoming unaffordable.
• Retailers are imposing stringent shopping conditions on their customers.
• Many retailers are closing stores; others are going completely out of business.

     As “obvious” as those consequences might seem, there’s another that’s just as “obvious” but considerably more horrifying: Retailers personally acting against thieves, usually with firearms.

     There are specific kinds of retail commerce where “the gun behind the counter” has been a feature for some time. Liquor stores in urban districts come to mind. That practice will spread. For some personal and familial proprietorships, it will become a literal matter of survival. This, too, is inevitable.

     I feel comfortable predicting a few of the consequences of a retailer killing a thief before the miscreant can get away:

• The media will condemn the retailer for his “wanton act of violence.”
• Politicians will trumpet the “need” for gun control.
• The “justice system” will disclaim any responsibility for the crime wave.

     Perhaps these things are not inevitable…but I wouldn’t advise my Gentle Readers to bet against them.