I have a relative who worked at Walgreens in the bay area. Mind blowing daily theft. The walgreen shut down.
Local politicians say theft is falling. But at least this location did not report each theft - it wasn't worth it, they'd be busy filling out forms to report theft all day and even if caught nothing would happen.
The big risk was actually that a thief would be caught and get hurt and then sue. There was a much higher chance of consequences for that then the theft itself. This location at least went to extreme lengths to tell employees not to stop the thefts.
I got my booster shot scheduled in one of the Walgreens about a week before it closed (300 gough st), this is anecdotal but it's what it felt like there.
I live in dogpatch and like SF (the area I live is nice).
The shelves were 90% empty (likely because they were closing shortly), what remained on the shelves was entirely locked down. They had one security guard. Behind the counter in the pharmacy was a sign that said "we will get through this together" that looked like it had been put up by the employees (it wasn't some corporate poster, but something that looked printed). The lighting was harsh, the employees seemed stressed out.
The tiny room they took us into for the shot was dirty, and the entire place was in generally pretty poor shape. This was one of the ones that got hit a lot by people with garbage bags emptying shelves repeatedly.
Relatedly the raids in Union Square also looked pretty extreme and there are lots of pictures of boarded up retail to try and prevent future raids. There's also a ton of car smash and grabs and you see a lot of window glass on the street walking around. I think London Breed's response is the right one, hopefully she's able to do what she says.
This is controversial off topic politics for HN, but lots of police presence in the tenderloin, a strong crack down on dealers, and giving addicts on the street an option of treatment or prison seems like the way forward (in addition to building a lot more housing to increase supply/lower costs generally).
The US is a big and varied place and the culture is interesting - though I’m biased. People are free to meet their ambitions and achieve great things without as much cultural cynicism. That said, even across states that have wildly different politics, there’s a unifying cultural thread that makes Americans more similar than different (it’s easier to notice after spending some time out of the country).
There are regional quirks though and problems with incentive structures that can lead to bad outcomes nobody wants. The politics in SF right now are pretty bad, but there are 2 recall elections coming up that are likely to pass. Hopefully things are starting to turn around.
The UK isn’t immune to these issues either I remember looting in 2011 or so? It’s hard to get the full picture from these kinds of snippets.
I really dislike the trend where reporters invent narratives in a headline and then throw out some BS statistics in the story that readers will inevitably skim and then walk away thinking they were "informed" by.. Take the following statement:
> If organized retail thieves steal $70 billion annually, and California accounts for 10% of the U.S., California’s losses add up to $7 billion, meaning the Bay Area “is likely in the billions itself.”
CA being 10% of the population does not mean you can take a national $ of retail theft and divide it by 10. Yet, the author tries to conflate this multiple times in the article and then comes up with a non-sensical conclusion in the last paragraph. There are so many leaps of logic that it made my head hurt.
Did you miss the part where it was a California Retail Association staffer who made that comment:
"Asked how the organization arrived at that figure, a CRA staffer said that “there’s no way of knowing exactly” how much organized retail crime affects the bottom line of businesses. The staffer said the estimate was based on a back-of-the-napkin calculation: If organized retail thieves steal $70 billion annually, and California accounts for 10% of the U.S., California’s losses add up to $7 billion, meaning the Bay Area “is likely in the billions itself.”"
It was immediately followed by,
"Leaving aside some of those assumptions, how did they come up with that $70-billion number? The staffer pointed to a report from the Retail Industry Leaders Assn. published this year. But that report didn’t find that organized retail thieves stole $68.9 billion per year at all — it estimated that all retail crime combined, including employee theft, regular shoplifting and fraud, added up to that number."
In other words, a rebuttal of the quote.
The final paragraph is,
"On the other hand, stolen merchandise can sometimes be recovered. The CHP reported that it contributed to recovering $20 million in merchandise stolen by organized theft rings in 2020. If the national average of 0.07% losses holds for California — Mathews at the NRF said the group could not break out data by state — that’s more than 10% of losses to organized retail theft in the state, well above the national recovery rate for stolen items (excluding cars), which hovers below 4%, according to the FBI."
They report everything missing that wasn't sold when they do inventory at least once a week so they can get reimbursed from their insurance and so they can be restocked. It's no additional work for a store.
These are "shrink" numbers not police reports.
Source: former front end/grocery manager for a grocery store.
The purpose of insurance is not to reimburse an expected loss. The insurance rates will promptly go up to cover these losses. Insurance companies are not charities. Ultimately, the losses will be borne by the business, and then their customers.
I don't see the benefit to a major retailer chain to even buy insurance. Are we sure they do? Insurers would simply look at Walgreens' specific loss amount and charge them that same number plus overhead and profit.
In Silicon Valley speak: RAaaS - Risk Aversion as a Service. Most retail runs on pretty thin margins so simultaneous robberies means a low quarter which means someone's head on a platter at corporate. It's a wash on the day to day, and the insurance comes out ahead on a big robbery because of the premiums, but the corporate keeps it's numbers versus the previous year.
It's mainly an accounting hack with little value to negative value for the company as a whole after your company reaches a certain size, I agree. There is the classic idea insurance idea that because retail runs on thin margins, keeping the money flowing is important so the whole house of cards doesn't fall down from a huge decrease at an inopportune time, but the relationship stays around way longer than is necessary because of the social organizational effects above, IMO.
Which is why the stores use it as a service to mainly to account for a big robbery, and the insurance is OK with pretty close to a wash on the day to day in order to have way more data for their actuaries.
I had close friends working in retail / warehouses who told the worst stories but I've never heard about insurance scams.
If this was possible, more and more businesses would do it, increasing the cost of insurance (for the insured and for everyone else in their business) until what you pay in insurance balances out what you scammed for.
Sure, maybe one store could do it and get a bit more money than competitors or maybe they just all claim a little bit, part of which is real shoplifting, part is wrong data (whether intentionally wrong or not).
Considering insurances are still standing and making more money than ever, what you say can't be more than anecdotal.
That's the whole point of essentially opening your books to the insurance company on as a regular a basis as corporate sees. They're a lot better than corporate at noticing 'systemic irregularities' that correspond to org charts, and have a financial interest in rooting them out. And insurance knows this and so gives you a better rate on it all because of the 'close relationship'. Additionally corporate typically values smooth revenue streams over strictly maximized revenue streams which is why they have insurance for shrink in the first place.
Commercial insurance often covers theft but not shoplifting.
At least locally, these stores would be uninsurable even if coverage was offered. Insurance companies are not idiots. "Insurance" is not intended for ongoing steady losses, but irregular hard to predict losses.
Are you sure this was insurance paying? Did you ever see a claim form?
Many businesses do have a shrink budget, and if corp doesn't want action taken (ie, no stops) a local store can claim back shrink to be fair to its local managers in terms of their numbers.
I didn't see the initial claim forms, but I was involved in the dispute processes.
And like I've said below, insurance isn't an idiot here. They come out ahead on pretty much every situation, either as a wash for money but with way more data for their actuaries, or they increase premiums if larger robberies occur more frequently. 'Insurance always comes out ahead' is a great axiom to live by.
Yeah, it's all automated. You have to go through the whole store and mark what you have at least once a week. The system internally matches that against what the cash registers sold, and then makes an order for new stuff and corporate runs a report and submits that to insurance. It's all pretty orthogonal to if anything was actually stolen or if there was just process mistakes like saying 4qty for something when each was a different flavor/SKU or something.
I doubt that any insurance will cover it considering you can't prove missing inventory was stolen vs misplaced vs fake inventory on the computer unless you have the thieves check out as they leave. Also insurance is to hedge against unusual and infrequent occurrences, while inventory shrink is a normal feature of a store. Like the insurance company would have to charge more than the inventory losses to make it work for them.
"The country’s largest retail industry group, the National Retail Federation, estimated in its latest report that losses from organized retail theft average $700,000 per $1 billion in sales — or 0.07% of total sales — an amount roughly 330 times lower than the CRA’s estimate."
0.07% is the estimate for "organized retail theft" which does not include "employee theft, regular shoplifting and fraud". How often did gangs of thieves break into the Walgreens to steal all the cosmetics?
"The walgreen shut down."
There was a restaurant near me, a local landmark. It closed down when the original owner retired, but was reopened by one of his relatives several months later. It lasted about a couple of months, then closed abruptly with hilarious signs on the door about the government stealing all the money---apparently the new operator hadn't realized that employment taxes were a thing. Was it the evil government that killed the restaurant, or the new operator's incompetence?
I have a relative who worked at Walgreens in the bay area. Mind blowing daily theft. The walgreen shut down.
Local politicians say theft is falling. But at least this location did not report each theft - it wasn't worth it, they'd be busy filling out forms to report theft all day and even if caught nothing would happen.
The big risk was actually that a thief would be caught and get hurt and then sue. There was a much higher chance of consequences for that then the theft itself. This location at least went to extreme lengths to tell employees not to stop the thefts.