Partnering With Businesses to Address Public Safety Problems
Tool Guide No. 5 (2006)
What This Guide Is About
The annual cost of crime against business is in the billions of dollars. Business victimization hurts business owners, employees, neighbors, customers, and the public at large. Still, convincing businesses of the importance of participating in crime prevention partnerships with the police can be challenging.
This guide addresses crime prevention partnerships and related issues. It begins by discussing the impact of crime against business and the roles businesses play in contributing to crime. Different forms of partnerships and strategies for forming partnerships are presented and analyzed. Characteristics of good and bad partnerships are listed, along with ideas for overcoming barriers that may prevent businesses from participating in crime prevention partnerships. The guide concludes with examples of business-police partnerships and programs, some that are known to be effective and others that are still largely untested.
This guide does not include detailed information about preventing specific crimes against business. However, several of the guides in the Problem-Oriented Policing Guides series do address particular crimes that affect businesses, including the following:
- Assaults in and Around Bars
- Bank Robbery
- Burglary of Retail Establishments
- Check and Card Fraud
- Crimes Against Tourists
- Disorder at Budget Motels
- Disorderly Youth in Public Places
- False Burglar Alarms, 2nd Edition
- Gasoline Drive-Offs
- Prescription Fraud and Abuse, 2nd Edition
- Robbery at Automatic Teller Machines
- Robbery of Convenience Stores
- Robbery of Pharmacies
- Robbery of Taxi Drivers
- Shoplifting, 2nd Edition
- Stolen Goods Markets
- Street Prostitution, 2nd Edition
- Theft of Customers' Personal Property in Cafés and Bars
- Theft of Scrap Metal
- Thefts of and from Cars in Parking Facilities
What Is Known About Crime Against Business?
Because there has not been a national victimization survey of businesses in the United States for over 20 years, 1 we do not have a clear picture of the extent of crime against business. However, small-scale studies and research from other countries suggest that such crimes are a serious problem.
- In 2003, business targets such as commercial houses, banks, gas and service stations, and convenience stores suffered over 100,000 robberies, compared to 60,000 for residential locations. About one-quarter of all robberies, including street robberies, occurred in businesses. Over one-third of all burglaries occurred in non-residences.2 The actual rates of business crime are much higher than these numbers suggest, because there are fewer businesses than there are residences.
- A British study of small businesses found that nearly two-thirds had suffered some form of criminal victimization over a five-year span. Theft and vandalism were the most common crimes. The most vulnerable industries were hotel and catering, construction, and retail.3
- Businesses suffer disproportionately from crime in comparison to households and individuals. For example, a British national survey found that only 4 percent of households were burglarized in 1993, compared to 24 percent of retail premises.4 Cross-national surveys suggest that retail businesses may have an overall burglary risk that is 10 times greater than the risk faced by households.5
- Many businesses suffer from revictimization. In one town in England , 40 percent of businesses that were burglarized were victimized again within one year. Of this group, 49 percent were burglarized a second time, and 57 percent of the latter group were burglarized at least one additional time, again within a one-year period.6
- The typical business loses close to 6 percent of its yearly revenue to fraud. Small businesses are particularly vulnerable: those with fewer than 100 employees suffer median losses of $98,000 a year.7
- Goods and services are priced 15 percent higher to make up for business losses from theft.8
- Business crime costs the U.S. economy at least $186 billion annually.9
Who Are the Victims of Business Crime?§
There are four immediate victims of crimes against business: businesses themselves, their employees, their customers, and the public. But because businesses are parts of their communities, business crime affects the community as much as crime in the community affects businesses. Thus, other stakeholders are affected as well: shareholders, management, suppliers and vendors, neighboring residents, and nearby businesses.
§ Although this section focuses on the costs of crime against business, it is important to remember that some businesses benefit when other businesses are victimized. For example, commercial entities that provide target-hardening devices and security services reap their profits from business crime, as do those manufacturers, retailers, and shippers who benefit when a stolen item is replaced with a new one.
The cost of crime threatens the viability of businesses by increasing expenses in a number of ways. For example, money might be spent repairing damage caused by vandals, or on security devices, such as mirrors, closed circuit television, and alarm systems. Insurance premiums can be increased.10 It can be harder to hire and retain staff, leading to increased recruiting expenses or higher wages.11 If fear of victimization causes customers to stop frequenting the business, sales will drop. All of these factors, in addition to direct losses from theft, can result in lower profits. This can be devastating, particularly to small businesses or to those operating on slim profit margins.
If the viability of a business is compromised due to the costs associated with crime, employee hours may be cut to reduce expenses. In addition, employees who work in businesses with crime problems are at risk of violence in the workplace; at the very least they are more likely to experience fear on the job. Employees of victimized businesses reportedly suffer many of the same damaging psychological effects that residents experience when their homes are burglarized.12
The cost of business crime is often passed on to customers in the form of higher prices, reduced operating hours, or even relocation of the business to a safer area. In addition, certain crime prevention measures, such as security guards, target-hardening, and closed circuit television, can make customers feel as though they are shopping in a hostile environment or are being treated as suspected thieves.
Businesses play an important role in communitystability by providing goods, services, and employment opportunities. A thriving business community is indicative of a strong local economy and a good quality of life. Businesses also contribute to social cohesion by providing places for area residents to interact casually.13 When businesses relocate, close, or reduce their hours because of crime, neighborhoods can be substantially impacted. Business relocation can also negatively affect residential property values, because not only does proximity to a blighted area make adjacent properties less attractive to potential buyers, but landlords may have difficulty finding tenants if goods and services are not located nearby or if the social environment creates a sense of fear among community residents.
In addition to local effects, crime against business exacts a cost from the general public. Besides the obvious cost of the resources needed to investigate and prosecute such crime, there are a variety of less obvious drains on public resources. For example, individuals who become unemployed when businesses close or who are unable to find work due to poor economic conditions in their communities can become a burden on the system, as they often do not pay taxes and sometimes even receive subsidies from the government. In addition, failed businesses do not contribute to the public weal in the form of sales or income taxes. And reduced property values around blighted commercial areas can lead to lower assessments, and hence, lower taxes and revenues.
How Do Businesses Contribute to Crime?
Like most other types of crime, business victimization is not spread randomly across all potential targets. Rather, it is concentrated in certain sectors of the economy; and even within certain classes of business there are wide variations in victimization rates. For example, a study of budget motels in Chula Vista, California found that the annual rate of calls for service per room ranged from a low of 0.25 to a high of over 11.14 Similarly, a study of victimization in Britain found that 2 percent of retail premises suffered 25 percent of all retail burglaries in 1993, meaning that certain locations were victimized considerably more frequently than were others.15
Commercial areas are full of criminal targets: goods to be shoplifted; cars to be broken into; purses and wallets to be grabbed; employees to be robbed. Still, many businesses do not seem particularly concerned that their methods of operation can actually cause crime—not only inside their establishments, but in neighboring areas as well. Businesses do not operate in a vacuum; they are parts of their communities. There is much they can do to reduce the situational conditions that create opportunities for crime.
Consumers like to be able to touch items, to pick them up, to imagine using them. Accordingly, retailers frequently arrange their stores to allow customers easy access to merchandise. But encouraging purchases also encourages shoplifting. For example, small items placed near cash registers and check-out lines can be easily slipped into a dishonest customer's pocket. Products placed near open doorways or on the sidewalk outside provide opportunities for thieves to grab something and run away. By creating an environment that generates sales, businesses also create an environment that contributes to crime.
§ More information about how merchandise displays and store layouts can affect the risk of shoplifting can be found in the Shoplifting POP guide.
Businesses that keep their staffing levels low can be vulnerable to crime in two ways. First, fewer staff means less supervision of customers and higher levels of shoplifting. Second, fewer staff typically means more autonomy for employees, which can result in higher levels of employee theft, from outright stealing to "sweet-hearting"§§ and time theft. Although understandable, the desire to run an efficient operation by minimizing staffing expenses can lead to poorly supervised settings with inadequate surveillance.
§§ "Sweet-hearting" means giving unauthorized discounts or free items to friends or family.
Commercial areas are often bustling with people shopping, waiting for buses, or chatting with neighbors. Such activities can provide good cover for those engaged in illegal activities. In high-crime areas, businesses must be especially vigilant, lest their premises be used to facilitate criminal activities. Businesses that allow vagrants, prostitutes, or drug dealers to loiter or to use their facilities—even if they are making purchases or otherwise behaving as legitimate customers—make it easier for these sorts of people to operate. This is especially true at night, when the failure to provide adequate lighting or surveillance in parking lots can encourage transactions between prostitutes or drug dealers and their clients and can make it easier for predatory criminals to victimize legitimate customers.
§§§ More information about how burglary risk is affected by external security can be found in the Burglary of Retail Establishments POP guide.
Businesses also contribute to crime because of the products they manufacture and sell. Often, the victims of these crimes are not the businesses themselves, but customers who are hapless enough to buy goods that are both attractive to thieves and designed so that they are easy to steal. People can also be victimized by those who use products in a harmful way; an example of this is alcohol-related crime. At issue is whether businesses have any responsibility in these matters; that is, under what circumstances should businesses be expected to share the burden of crime prevention? It can be argued that if a product or service somehow contributes to a particular type of crime and the seller can do something to reduce the incidence of that crime, then the seller should be expected to do so. This is not always clear however, because in some situations there is no way for the business to know the intended use of the product it sells. For example, a kitchen knife can be used in a stabbing, but it may be unreasonable to hold a seller liable when the knife is used in such a manner. 16
§ Designing products that are crime-resistant and the role of the corporate sector in preventing crime are discussed in Clarke and Newman (2005).
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