Knock, Knock

One in three jewelers had a merchandise loss in the past year. Common-sense precautions could have reduced that figure sharply, say experts

A 1994 Labor Day weekend burglary of Tiffany’s in New York City unnerved some jewelers. “If Tiffany with all its security can be robbed, what chance do the rest of us have?” asked a jeweler interviewed on a TV news show.

But it was violation of a simple security procedure – not Tiffany’s sophisticated security equipment – that gave thieves access to the store. A security guard, who wasn’t part of the plot, simply opened the door and let them in.

Incredible? Maybe not. JCK wondered how common it is for jewelers to ignore such simple security procedures as keeping the door locked after closing and doing background checks on new or promoted employees. We polled more than 400 U.S. retail jewelers – from mom-and-pop stores

to multimillion-dollar chains – and reviewed the results with John Kennedy, president of the Jewelers’ Security Alliance, and Ronald R. Harder, president of Jewelers Mutual Insurance Company.

The results of the poll shocked the experts and showed that many jewelers make themselves easy targets by ignoring common-sense precautions. The results have “serious” implications, says Kennedy, because business people who respond to such polls tend to be serious and know what they should be doing. “If these people aren’t taking basic security measures,” he says, “then lapses in security among jewelers in general are more serious than indicated by these [results].”

Here are highlights from JCK’s poll.

Knock, knock: The Tiffany incident occurred because a security guard let in a fellow employee and two companions after the store closed. Two out of three jewelers polled (68%) say they do the same thing. That shocks Harder and Kennedy. “It’s extremely dangerous,” says Kennedy. “I’m surprised that so many people can be so lax [because that] frequently is how and when robberies of jewelers occur.”

One in five jewelers say they would open the door for a utility or repair person, one in three for a postal employee and more than half for “a customer” or a security or police officer. Many of the jewelers contend this isn’t as foolhardy as it might seem. They say they’d open the door only if they knew the individual or if the person could show identification.

Kennedy sees it differently. ID cards can be stolen or faked, he points out. The Tiffany incident proves that simply knowing someone doesn’t guarantee security. And even if a jeweler opens the door for a trusted friend or staff member, any thief who is lurking outside has a chance to push the person aside and run into the store.

A number of jewelers agree. A third say they never let in anyone, no matter who it is, before opening the store or after closing it. One Texas jeweler says emphatically that if his “employees aren’t in here by 8:55 a.m., they are locked out until the cases are loaded.”

That’s the type of rigid rule that JSA recommends.

Two by two: Three out of four jewelers say they always open and close the store with at least two people. “Having one person open while another watches from nearby really does deter `bad guys,'” says Kennedy. “Everyone should do it.”

But the fact that 24% say they don’t disturbs Harder. “That’s dangerous,” he says. “Doing it alone leaves you or that staff person open to robbery or a hostage situation.”

Some jewelers’ staffs aren’t big enough to double-team openings and closings. But even they can reduce risk, says Harder. “Ask a nearby merchant to watch when you open and close,” he suggests. “And consider where you go in and out. Where is the store located? What’s its exposure? Is it a back door? Can other people see you?”

Merchandise: Waiting until after you close the store to put away merchandise is a commonly accepted security rule of thumb. Yet almost half (45%) of the jewelers polled start before they close for the day. Do a few minutes either way really make a difference?

Yes, say Harder and Kennedy.

“Removing a percentage of merchandise not only leaves less available for sale,” says Harder, “it also concentrates much of your merchandise in a small area and [leaves you open for] a possible large loss.”

Adds Kennedy, “Nothing should be put away before closing. If you do, you not only have merchandise out [of the cases and vulnerable], but you also give [thieves] access to your open safe or vault. This is a terrific time for a robbery, theft or distraction theft.”

Most jewelers polled put most or all merchandise away each night; half say the maximum value of any single item left overnight in a showcase is $250 or less. That’s firmly within Jewelers Mutual guidelines. “We like to see all diamond merchandise, rings, gold chains – any high-value piece – put away,” says Harder. “Anything under $250 can stay out.”

While what goes in the vault each night depends on a jeweler’s insurance requirements and inventory, Kennedy says it’s smart to put away as much as possible. “If the jeweler does leave expensive things out overnight,” he says, “then he needs extra protection against people who will try to break in.”

Protection: Virtually all respondents have safes (and vaults) and alarm systems. After that, a gap develops in security equipment. Just over half of JCK panelists have video surveillance cameras and shatterproof window glass. One in four has buzz-in doors; one in seven has shatterproof showcase glass.

Harder and Kennedy say all jewelers should use video surveillance and showcases with shatterproof glass on the top and sides. “[The glass] is cost-effective and a great deterrent to robberies, thefts and smash-and-grabs,” says Kennedy.

Personnel checks: Virtually all jewelers polled check the information that potential employees provide about their previous employment. And three out of four do background checks on people they hire for, or promote to, supervisory or managerial positions.

JSA strongly recommends both procedures. “Anyone who has access to valuable goods should have some background checks done [if they are promoted to a managerial post or higher] – even if they’ve been around 10 or 15 years,” says Kennedy. “Today, you can hire services with computerized links with state courthouses to do background checks.”

When it comes to written security procedures, barely half the jewelers polled (49%) have them. Interestingly, almost the same number believe their employees know the procedures “very well.”

Even though most jewelers review such procedures with their staffs once every quarter or more, Harder finds it “disturbing” that only half have actually put them in writing. “When you put these guidelines in writing, it’s concrete and specific,” he says. “Everyone – including new employees – knows exactly what to do.”

Written guidelines don’t have to be long, adds Kennedy. A couple of pages are sufficient to spell out what your staff should do when opening or closing the store; taking out, showing and putting away merchandise; reacting to an emergency such as a robbery; and reacting to the presence of a suspicious person in the store.

The toll: In view of other findings, it’s not surprising that one in three jewelers (34%) says he or she had at least one merchandise loss in the past year.

Burglaries and armed robberies together accounted for a third of these losses. Distraction thefts and smash-and-grabs produced a majority. But most surprising, and unsettling to the experts, is that 20% of jewelers polled blame their losses on “mysterious disappearance.”

“That’s very significant,” says Harder. “If one in five jewelers can’t even explain a [merchandise] loss, then something’s wrong with those security procedures. They’re not as effective or defined as they possibly can be.

“There’s enough loss in a jewelry store business without `mysterious disappearances’ that could be prevented with more attention to security.”

CLOSING TIME

When do you usually start to put away merchandise at day’s end?
30 min. before closing 9%
15 min. before closing 23%
5-10 min. before closing 10%
After closing 55%
No answer 3%
How much merchandise (% of total value) stays in your cases overnight?
None 9%
1%-9% 43%
10%-24% 32%
25%-49% 7%
50%-99% 4%
100% 1%
No answer 4%
What is the maximum value of any item not put in your safe at night?
Zero 4%
$250 49%
$500 9%
$1,000 7%
$5,000 10%
$10,000 1%
$25,000 1%
$50,000 4%
$100,000 2%
More than $100,000 1%
No answer 12%
Source: JCKRetail Jewelers Panel poll.

BACKGROUND CHECKS

Do you confirm job histories of potential employees?
Yes 95%
No 3%
Sometimes 1%
No answer 1%
Do you run background checks on people hired for or promoted to supervisory or managerial positions?
Yes 69%
No 27%
No answer 4%
Source:JCKRetail Jewelers Panel poll.

PROTECTION

Do you have:
Safe or safes 97%
Alarm system 95%
Video surveillance cameras  55%
Shatterproof window glass 55%
Buzz-in doors 24%
Shatterproof showcase glass 15%
Armed uniformed guards 7%
All of the above 1%
Other 7%
No answer 2%
Note: The total exceeds 100% because of multiple answers. Source: JCKRetail Jewelers Panel poll.

SECURITY MATTERS

Do you have written security procedures?
Yes 49%
No 49%
No answer 2%
How well do your employees know security procedures?
Very well 52%
Aware we have them 33%
Not sure 9%
No answer 6%
How often do you review security procedures with your staff?
Weekly 5%
Monthly 30%
Quarterly 35%
Once a year 22%
Constantly 2%
As needed 4%
Never 1%
No answer 1%
Source: JCK Retail Jewelers Panel poll.

KNOCK, KNOCK

Do you always open and close your store with at least two people?
Yes 73%
No 24%
Usually 1%
No answer 2%
How long before opening or after closing will you let someone in?
15-30 minutes 12%
10-15 minutes 14%
5 minutes 14%
Rarely 28%
Never 32%
Who would you most likely let in before opening or after closing?*
Relative or friend of owner or staff 70%
Staff member 65%
Security or law enforcement officer 53%
Customer 61%
Postal employee 34%
Utility/repair person 19%
Other 8%
No answer 3%
*The totals exceed 100% because of multiple answers. Source: JCK Retail Jewelers Panel poll.

LOSS OF MERCHANDISE

Have you had a merchandise loss in the past 12 months?
Yes 31%
No 68%
No answer 1%
If yes, how often?
Once 57%
Twice 17%
Several times 3%
No answer 23%
What type was it?*
Distraction theft 35%
Burglary 26%
Mysterious disappearance 21%
Smash-and-grab 26%
Internal theft 9%
Armed robbery 9%
No answer 3%
*Total exceeds 100% because of multiple answers.
Source: JCK Retail Jewelers Panel poll.
Photo courtesy of Jewelers Mutual Insurance Co.