From The Sacramento Bee - September 14, 1998

To Catch a Thief (and Enroll Him)

By ISADORE BARMASH

For shoplifters, Peter D. Berlin is both a scourge and a savior.
For the last two decades, Mr. Berlin has been a sort of policeman for the American retailer, ferreting out and apprehending those who steal merchandise in stores. In addition, for the last seven months, he has taken to heart the problems of individual shoplifters, running a rehabilitation service for first offenders.

Mr. Berlin, 48 years old, whose round face and soft-spoken manner inspire confidence and trust, is probably the nation's best-known and most active consultant on what the retail industry euphemistically calls "inventory shrinkage." Through the Peter Berlin Retail Consulting Group, he writes newsletters, sponsors so-called shrink seminars and advises some of the country's biggest retailers on how to grapple with the rising problem of theft.

"It might seem strange to some people that I am working both sides of the fence, the prevention and the rehabilitative, on this type of crime," Mr. Berlin said. "But my real objective is not detection and punishment but prevention and rehabilitation. It's a much more practical solution to the problem."

From Thieves, Season's Greetings

Since tomorrow marks the traditional opening of the Christmas shopping season, shoplifting will be much on the minds of the nation's retailers, Both external and internal theft soars during the holiday season, as the crush of customers in stores and the sheer volume of goods being stocked and sold place enormous pressure on security officials.

Out of $1 trillion In United States retail sales In the year ended June 30 -
not including automobile or gas station purchases - it is estimated that inventory shrinkage amounted to about $13.5 billion, or nearly 1.4 percent, according to government and retailing industry data. That is about $38 million in losses each day.

Three elements contribute: shoplifting, internal theft and computer or bookkeeping errors. Shoplifting, Mr. Berlin said, is the only element of the three that continues to grow.

That is one reason why, last April, Mr. Berlin added another dimension to his work by buying control of Shoplifters Anonymous an 11-vear old rehabilitation service for first-offense shoplifters. He transferred its offices from Glen Mills, Pa., to his own firm's offices in Jericho, L.I.

Now, in the process of helping to rehabilitate shoplifters, he not only learns how they go about pocketing what does not belong to them, but gets their opinions on the effectiveness of new anti-shoplifting devices and methods.

The Shoplifters Anonymous service was started in 1977 by Larry Conner, a former civil service official. He obtained permission from the court system of Delaware County, Pa., to try to rehabilitate shoplifters arrested for the first time. The service languished after Mr. Conner's death in December 1986. and Mr. Berlin purchased it from Mr. Conner's family.

The rehabilitation process, which is voluntary, requires some work: at least three hours in a classroom or six hours of home study. A shoplifter's arrest record is expunged only if he or she passes the course.

Mr. Berlin charges the shoplifting student $48 for the course, which includes a presentation on how much shoplifting costs American society. That allows the participant to see that his or her actions are hurting business and raising prices to consumers. Often, Mr. Berlin said, the opportunity to discuss personal problems with a sympathetic listener removes a student's need to steal.

As for Mr. Berlin, the rehabilitation service has helped him to get more deeply involved in both the problem and the solution. "I have no regrets about my career choice," he said, adding with a smile: "It allows me to be a perfectionist, which I am. A detail man."

Mr. Berlin said he could now help retailers while performing "a humane function."

"Even first offenders, we find, have been habitually stealing, and it's only when they're caught for the first lime that we can help," he said. "It's an addiction, perhaps like overeating."

Many people say they steal because of tension or stress in their lives, Mr. Berlin said. Factors they often cite include marital problems, divorce or the serious illness of a family member.

There is no simple profile of a shoplifter, he has found. "They are all kinds of people, ranging across all incomes, races and educational backgrounds," Mr. Berlin said. "We have even found some policemen and nuns who steal. Not long ago, a local polling group went into a West Coast shopping mall and asked random shoppers if they had stolen anything in the mall. About 12 percent said that they had stolen something within the last 30 days."

Other organizations also seek to help rehabilitate shoplifters and other thieves, including The National Corrective Training Institute in Burnsville, Minn., and the National Traffic Safety Institute in Salem, Ore.

Roster of Corporate Clients

In his other role, as a retail consultant, Mr. Berlin's current clients include Glemby International, Management Horizons, Turtles Records and Tapes, the Melville Corporation and Lamont's Family Clothing Stores.

"Peter has been very effective for us in preparing a security review for all our store managers, which we've widely used to train them in securing our stores," said Lyman Wood, president of Brennan College Services, a chain of 51 college bookstores based in Springfield, Mass. "We also find his newsletters very appropriate and useful. It has authentic stuff that we can adapt to our business."

Born in Brooklyn in 1940, Mr. Berlin attended Brooklyn College for two years, then received a bachelor of arts degree in psychology from Long Island University. In 1966, he joined the executive training program at Abraham & Straus, was assigned 10 inventory control and two years later became head of the department. His job primarily involved checking markdowns and paperwork errors, he said, "but I soon realized that we had to get into theft, both internal and external."

Saw Value of Alarm Tags

In 1969. he was one of the first retail executives to use the Sensormatic theft device, a system of plastic tags that set off an alarm if they arc not removed before an item is taken from a store. In the A.& S. junior apparel department, shrinkage amounted to 7 percent of sales, but within a year of adding the Sensormatic, he said, it dropped to I percent. Later he found that shoplifters considered the plastic lags to be the most effective theft deterrent.

In 1972, Mr. Berlin moved to Bonwit Teller as security chief and head of inventory control. He was put in charge of 40 uniformed security guards, plus plainclothes guards and outside investigators, and remained with the chain for three years.

When Bonwit's owners eliminated his post in a cost-cutting move, Mr. Berlin became an inventory shrinkage consultant, working with Bloomingdale's, Bergdorf Goodman, Lord & Taylor and B. Altman & Company. They particularly wanted his expertise on refund fraud, which was growing as stores liberalized their policies on returned goods.

The fraud technique was simple: A customer would buy a sweater, for example, and return later without it, but with the sales slip. The customer could take an identical sweater off the rack and, with the previous day's sales slip, bring it to the cashier for a refund.

Eliminating on-the-spot refunds in favor of mailing a check to the shopper's home has helped control the situation, M r. Berlin explained. "What we do is to run the· list of refunds, with names and addresses, on the computer, and we look for suspicious data, such as one customer making multiple purchases of similar merchandise on the same day at various branches of the same retailer," he said. "It's important to keep up with refunds - between 2 and 6 percent of them are fraudulent."

Repurchased His Company

After a five-year period when his company was a division of Price Waterhouse & Company, Mr. Berlin early in 1987 repurchased his concern and his two newsletters, one aimed at top executives and the other at store managers.

Mr. Berlin declined to provide any financial details about his business, which has a staff of five, but said that revenues were about equal in both his consulting activities and his newsletters, while the rehabilitation service remained small. "I expect, though, that in a few years it will be three to four times as big in revenues as my consulting business," he said.
The newsletters are issued 10 times a year, and cost subscribers $135 for the executive edition and $12 for the store manager's edition. They are the most profitable part of the business, he said, followed by consulting.

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