Small Business

Fed up with the rise in thefts and shoplifting, small biz owners across U.S. are taking action

They are brazen, aggressive and seemingly acting without a care in the world.

Shoplifters are hurting big retailers and chain stores, even reportedly forcing some locations in New York City and San Francisco to close up. But unlike many big retailers that can absorb the loss, some small business owners say the crime wave is devastating to their business. Especially now, with many still recovering from a global pandemic. 

“[When] you see … several thousand dollars just walk out the door – there really aren’t words that you can put to a situation like that. It’s just tough. It’s very, very difficult,” said small business owner Derek Friedman.

Small business owner Derek Friedman
CNBC

Friedman, who owns two retail clothing chains in Colorado and Texas – Sportsfan and Sock Em’ Sock Emporium – said four out of his 10 stores in the Denver area have seen a significant increase in theft since mid-2019, with losses totaling more than $200,000 in less than three years.

I didn’t even turn [some claims] into insurance because we would have [been dropped] – and a small business can’t afford to operate without insurance.
Derek Friedman
Denver-based small business owner

“Our average losses to theft before the beginning of the spike in 2019 were $2,000-$3,000 per month,” Friedman said. Since then, the retail value of stolen items has “averaged about $8,000 a month,” he said.

Exterior of Sportsfan store in Denver, Colorado
CNBC

“We had to delay pay increases … [and] for almost two years, I took no income and just lived off of retirement as we tried to crawl out of Covid and try to recover from all the losses from the brazen theft,” Friedman said.

He’s not alone. According to a recent survey of 700 small business owners by Business.org, 54% reported an increase in shoplifting last year, with one in four saying they’re dealing with the issue on a weekly basis.

In one surveillance video Friedman shared with CNBC, a shoplifter picks up a jersey and hat, then threatens employees with a 2 foot long machete and walks out of the store with stolen merchandise. Friedman said he reported the incident to police, but to his knowledge, no one was apprehended.

Friedman said he was on the brink of losing his insurance because of the number of incidents his businesses were enduring.

“I didn’t even turn [some claims] into insurance because we would have [been dropped] – and a small business can’t afford to operate without insurance,” he said.

Last week, Friedman implemented a 1% crime-spike fee to help offset his losses at four of his hardest-hit Denver stores, which will be added to all transactions indefinitely. And that may be just the starting point.

“Hopefully, we don’t have to raise it,” he said. “I understood that [shoplifting was always a part of doing business] when I bought retail stores … but not at this level. We didn’t sign up for that and it’s not right and it needs to change.”

I’ve been here for 12 years. It was never like this – never.
Peter Panayiotou
Owner, Cellar 53 Wine & Spirits

Peter Panayiotou, the owner of Cellar 53 Wine & Spirits in New York City, said he is always the first one in and last one out. He is so concerned about the rise in theft, he said he doesn’t remember the last time he took a day off.

Cellar 53 Wine & Spirits owner Peter Panayiotou
CNBC

“I come in before my guys and … I don’t leave the store until I close at 10 p.m. Why is that? Because I don’t want to leave them alone here,” Panayiotou said.

In one surveillance video the shop owner shared with CNBC from last month, a man grabs a bottle of liquor and races out the door. Panayiotou chases after him, but the man gets away. That scene, he said, is playing out now more than ever before.

“[I’ve been] here for 12 years. It was never like this – never,” he said, recalling a man who was coming into the store each day to swipe two bottles of Jack Daniels off the shelf.

Exterior of Cellar 53 Wine & Spirits in New York City
CNBC

Panayiotou said he is securing his most expensive wine bottles to shelves with zip ties he bought on Amazon. Meanwhile, he’s also acting double duty as a security. And when he spots a thief, he immediately locks the door. 

“I tell them, ‘put it back – it’s not worth it.’ If they put it back and they leave, it’s fine. If they don’t, I lock the door until I take back what they got from me.” Panayiotou said. “I can’t depend on the police anymore. I just have to protect my business.”

According to Jason Straczewski, the National Retail Federation’s vice president of government and political affairs, if someone comes into a store and steals below that state’s federal theft threshold, it’s highly unlikely that law enforcement will go after them – unless it’s part of a frequent occurrence or it’s a group that law enforcement is tracking.

“Several states are looking at ways to aggregate multiple crimes so that when an individual does go above the felony theft threshold, it will be easier to bring charges against that individual – or group of individuals – as well,” Straczewski said.

So many people think you can walk out [with a pair of shoes], and not have to pay for it, and you won’t get prosecuted.
Caroline Cho
Owner, Sneaker City

In Seattle, Caroline Cho’s business, Sneaker City, has been in her family for three decades. But break-ins and brazen thieves – literally walking out with shoes in broad daylight – forced her to change the way customers tried on the merchandise. 

Sneaker City owner Caroline Cho
CNBC

The solution she came up with? Allowing customers to only try on one shoe at a time.

“[It was] the only way to protect my inventory,” said Cho. “So many people think you can walk out [with a pair of shoes], and not have to pay for it, and you won’t get prosecuted.”

But her losses still added up. And when her landlord hiked her rent, she decided to liquidate her inventory and shut down for good, Cho said.

Exterior of Sneaker City in Seattle, WA
CNBC

“It’s very bittersweet because you’re saying bye to something that you grew up with, that your family sacrificed a lot to make grow and that supported us,” Cho said. “But it’s also a little bit of a relief … because it was just getting to be too much.”

Are you a small business owner impacted by a surge in shoplifting? If so, we want to hear from you. Email us at cnbctips@nbcuni.com.

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