Less DVD theft with lower prices

Though retailers maintain vigilance

Eliza Gallo -- Video Business, 7/28/2005

JULY 28 | Although indie video retailers face a number of difficult issues, store theft is one front that presents good news.

Retailers say merchandise theft isn't as big a problem as it once was, due to a combination of effective security measures and market factors.

Fifty-one percent of indie rentailers reported that they had no videotapes stolen in an average month in 2004, as opposed to 40% in 2002, according to a survey conducted by the Independent Dealers of Entertainment Assn.

Retailers reporting no stolen videogames rose from 61% in 2002 to 66% two years later.

For DVDs, the picture was slightly different: only 48% experienced no theft in 2004, as opposed to 50% in 2002, and those who did experience theft, lost more units than they had two years earlier.

Curt Waite, owner of My Video Store in Santa Clarita, Calif., said indies don't have the problem with theft they did when costly VHS tapes filled the shelves.

"The movies were more expensive," Waite noted. "You can go out and buy [DVD] movies anywhere for $10 a couple weeks after they're out, so where's the value?"

Observed Charles Annable of Campus Video in Oberlin, Ohio, "You lost a $72 wholesale tape, and that was $105 retail. It used to really hurt."

However, videogames are still an attractive target, as they can retail for $50 each. Two months ago, one customer "rented" five videogames and disappeared, Waite recalled.

At My Video Store, most theft happens through use of fraudulent or bad credit cards, he added.

In 2004, 67% of indie rentailers used a radio-frequency or magnetic security tag system, according to the IDEA survey; this was up from 62% in 2002. In addition, 78% reported using surveillance cameras in their stores, up from 69% in 2002.

Many stores still employ the ultimate anti-shoplifting strategy: the closed inventory, in which product is kept behind the counter. In 2004, this traditional video store setup was used for videogames by 67% of rentailers surveyed by IDEA, for DVDs by 42% and for videotapes by 28%.

Several years ago, Dwayne Hemminger, owner of The Video Place in Harlan, Iowa, looked at some stores that kept live inventory out on the shelves and decided he didn't like it.

"Maybe I'm a little bit old-fashioned, but there's nothing much out on [my] floor to steal," Hemminger said.

At The Video Room locations in New York, owner Michael Becker maintains a closed inventory. He even keeps sell-through DVDs behind the counter, displaying a rental box for each title on the shelves so customers know what's available.

Rick Blackman of Scott's Super Video in San Jose, Calif., is one of the many retailers who combine closed and live inventories.

Blackman's DVDs are kept behind the counter, but he leaves VHS out on the floor. The store's shoplifting problem is declining along with the demand for VHS, he explained.

His real fear is one he worries security systems can't foil. He experienced an armed robbery attempt several years ago, but fortunately the thief ran off when a customer drove up outside.

"We've lucked out," Blackman said. "I know there have been some real catastrophes at other video stores."