“What are jewelers most concerned about?” a recent survey asked.

“Theft or burglary” came in first, with “Security” second, ahead of “Making a profit.” Given the extremely perilous nature of the retail jewelry business, these answers are no surprise.

In 1994, 20 homicides occurred during retail jewelry crimes, principally robberies against jewelers, and more than 150 jewelers were injured. Over the last 10 years, an astounding 241 people have been killed in crimes against jewelers, almost all of which involved robberies of retail jewelry stores. For a jeweler, being a crime victim can mean you can no longer work at your trade, or no longer want to. (See “Jewelry industry homicides” chart.)

Today, the Jewelers’ Security Alliance enters crimes against jewelers into its data base at the rate of 2,000 a year. But the JSA estimates that if jewelers followed its recommendations, more than 60% of the crimes against them could be prevented.

This report is a starting point for the retail jeweler to examine his or her security procedures. The rules assume one essential protection, which should be called Rule #1: every retail jeweler needs jewelers’ block insurance protection. If you can’t “afford” insurance, you can’t afford to be a jeweler!

Crime against jewelers is so rampant, so widespread and so unpredictable that in one minute a lifetime’s work can be taken away. Over the course of a 25- or 30-year career (hopefully even longer), the chances of having a significant loss are high. Retailers must make sure they have proper insurance coverage to avoid the possibility of an impoverished retirement, or bankruptcy or closing due to crime. Having adequate insurance protection underlies all JSA’s loss prevention and security recommendations.

Preliminary security steps: All retail jewelers should follow these preliminary rules underlying security protection:

• Always maintain adequate inventory records.

• Be sure to schedule regular security training sessions for staff.

• Get to know personally someone – either a detective

• or high-ranking officer – from your local police department. The police can provide excellent

• assistance and advice about your community. Moreover, if you need help, it’s much better to call a friend rather than 911.

• Join the Jewelers’ Security Alliance. Have all em ployees read the materials and follow the advice which JSA sends you.

Security need not be costly: What level of protection do you need, given your location, inventory and other circumstances? Because of the enormous risks involved, security should be the last area in which to cut corners. Still, you want to avoid unnecessary or excessive expense.

This article recommends three kinds of protection:

• Physical (such as safes or gates);

• Electronic (such as alarms and cameras); and

• Procedural (such as showing only one item at a time).

Physical items, while costly, have a long capital life and represent a crucial investment for the future. Electronic items are of reasonable cost and, along with physical items, may be required by your insurance company. Procedural recommendations, which are the most important, cost a jeweler little or nothing, except a relatively small amount of staff time. This expense is tiny compared to the devastating costs of a serious crime.

Crime can bring a total loss of the business if you lack proper insurance coverage. Even with adequate insurance, there may be other “costs” – such as lost selling time; the time it takes to adjust the loss; deductible costs; damage to morale of both retailer and sales staff; and possible doubt, both conscious and unconscious, created in the minds of customers as to their safety on the premises.

There also is the ultimate cost paid by far too many jewelers, which is death or serious physical injury. If a jeweler “can’t afford” good security, that jeweler had best seek a new line of work.

Security as a state of mind: In addition to following specific security rules, a jeweler should try to develop a set of attitudes – a mindset – in hiring and training employees. That mindset can best be summarized as alert, vigilant, suspicious and skeptical. It will help identify the employee or applicant with a proper attitude toward security just as surely as it can identify the attitudes and behavior that make a good salesperson. Security rules are good, but there’s also a time to trust instincts. Remember, if your gut reaction is whispering to you that some person or thing is a security risk, it probably is!

Robbery, theft & burglary: This report has three separate sections – one each on robbery, theft and burglary. (See “1994 crimes against jewelry firms.”)

“Robbery” can be defined as an unlawful taking by force or fear, that is, the man pointing a gun at you. “Theft” is an unlawful taking without force, such as by fraud or stealth. “Burglary” is the breaking into your closed premises with the intent of stealing your goods.

Subsections under these three major headings will discuss the principal ways jewelers are victimized, and the best ways to help prevent these crimes.

ENCOURAGE ARMED ROBBERS TO AVOID YOUR STORE

A California jeweler left his 16-year-old daughter alone to handle the store while he went to the bank. Upon his return, he found his daughter tied up and $900,000 worth of jewelry stolen.

A New York jeweler, his wife and daughter were in their store being held at gunpoint while three young robbers removed jewelry from display cases. The jeweler’s son came from the back room with his gun and began to shoot. When the smoke cleared, one robber was wounded, but the jeweler and his wife both died from gunshots during the violent exchange of shots.

Tragedies like these are common in the jewelry industry. But following a few simple, practical rules can greatly reduce robberies and their violent results, as well as related losses. Some robbers will choose to go elsewhere when they see that you take serious security measures. (See “1994 robbery statistics” and “Types of violence in jewelry store robberies.”)

The following rules may save your life:

1. Use and properly maintain a visible video camera and recording system in your store. Such a system is a deterrent to crime and helps identify criminals who commit a crime in your store or even case the store. Video surveillance also helps the retailer avoid uninsured “mysterious disappearances” by keeping a complete visual record of activities on the selling floor, and deters internal theft by the jeweler’s own employees. (See “A look at video surveillance systems.”)

2. Use a buzzer system to admit customers to your store.

3. Have at least two employees on the floor at all times. The chance of armed robbery goes up if there is a single person in the store; a criminal finds the target less threatening and more appealing.

4. Do not open or close the store alone. One person should lock or unlock the doors, while another observes from a safe distance. (See “How to open & close.”)

5. Never let a stranger into your store before or after business hours. Carefully check the identification of all delivery personnel and other workers. If in doubt, keep them out! (See” Beware of robbers posing as delivery personnel” on page 124.)

6. Split your higher-value merchandise among different display cases. Robbers very frequently smash cases and remove goods themselves, rather than demand that the jeweler open the cases or safe. Time is of the essence for the robber who wants to get out of your store quickly. Making the job slower and more difficult will reduce the amount a robber can easily scoop up and take.

7. Consider keeping a significant percentage of the goods most tempting to criminals, such as Rolex watches, in your safe.

8. Use display cases with hardened or laminated glass on the sides as well as the top. This further slows the robber who is smashing cases. It is highly recommended that at least showcases containing high-end goods be constructed of this special glass. Many robbers have wound up with a very small “take” because it took them many blows and a great deal of time to break laminated cases.

9. Set up an “alert system” for your store. If you believe you have suspicious persons in the store, use a code word or phrase to alert other employees that you believe a crime may be about to occur. A phrase such as, “Did Mr. Smith’s ring come in today?” will alert the staff without disturbing genuine customers.

10. If you see a suspicious situation, have an employee conspicuously leave the store while carrying and dialing a cellular telephone. Suspicious persons will worry that they’ve already been spotted, while genuine customers will scarcely notice. If the employee going outside can do so safely, he or she should also note the descriptions and license numbers of any nearby cars that the possible crook is using.

11. Be vigilant for individuals “casing” your store, that is, observing your premises and procedures in preparation for a robbery. Report your suspicions to the police. Become friendly with your local police, and discuss with them the special problems of jewelers. (See “Are you being cased?”)

12. Develop a neighborhood alert system – a “phone or fax tree” – to share warnings with other jewelers in your area.

13. During times of special risk, such as during trunk shows or special events calling for goods of unusually high value, consider hiring an armed guard. If you do employ one, JSA strongly recommends using an armed, off-duty police officer, which is permitted by most police departments. Many departments also permit police officers to work in uniform. Civilian guards, even if armed, often lack sufficient training, and do not deter robbers nearly as well as off-duty police.

14. Retail jewelers occasionally ask if metal detectors installed at their doors will deter armed robbers. Few jewelers have such systems, which are difficult to use properly in a store. Furthermore, such a system might actually lead to violence if robbers set off an alarm or if they’re caught in a man trap. On balance, JSA does not recommend metal detectors.

Should you keep a gun? As mentioned earlier, almost all of the 241 homicides involving jewelers occurred during robberies of retail jewelry stores. An analysis of these crimes shows that the risk of death or serious physical injury to the jeweler rises dramatically if the jeweler tries to resist or doesn’t cooperate fully with the robber.

Occasionally a jeweler succeeds in pulling a gun and shooting the robber, but these are rare exceptions. As the aggressor, the robber has the tremendous advantage of knowing he will use his gun. The jeweler is the defender, and thus in second place. The tragic reality is that jewelers who pull a gun are likely to get themselves or other innocent people killed. Jewelers need insurance, not guns, to protect themselves from loss if they do have a robbery.

It is rare for a jeweler who does not resist to be shot or killed; it is more common for a jeweler who does resist to be shot and killed, or to cause the death of another innocent person. (See “When guns are used” on page 126.)

In a recent case in New Jersey, a jeweler and his wife faced an armed robber. When the jeweler reached for his gun and fired, the shot hit and killed the wife, who was resisting the gunman. The robber had his gun in the safety position, and fled from the store, never firing a shot.

Two years ago a jeweler in Pasadena, Cal., faced two robbers, one of whom had a gun. The jeweler’s wife and 10-year-old son were in the store at the time. When the jeweler reached for a gun, the robbers shot the jeweler’s wife and son to death, and wounded the jeweler in the stomach. The jeweler, who never got off a shot, lived.

Remember that bullets travel far, and any shots fired can wind up hitting an innocent person standing outside the front window or even quite a great distance away, causing not only tragedy but raising serious issues of legal liability for the jeweler.

What to do in a robbery: Even if a store follows all the rules to discourage robberies, the jeweler still may be a robbery target. JSA’s main advice if a robbery does occur is: do not resist, cooperate fully. For many years, the JSA has promoted the following life-saving guidelines on what to do in a robbery:

• Obey the robber’s orders. Do not say or do anything, even raise your hands, unless told to do so.

• Do not attempt to disarm the robber or reach for a concealed weapon. Assume that the robber will shoot without hesitation.

• Do not press the holdup button until the robbers have left the store and you have locked the door. If the police arrive with the robbers in the store, or if the robbers return, a deadly hostage situation could develop.

• Expect to be threatened; fear is one of a robber’s key weapons. Robbers commonly say: “I’ll kill you if you make a move!” This is a typical threat. Expect it. Keep calm!

• Frequently the robber will force a jeweler and his staff into a back room or washroom. Expect to be tied up or handcuffed, or told to lie on the floor. Do as you are told!

• Do not attempt to chase robbers or follow them out of the store.

• Call the police immediately after robbers leave and you have locked the door. Do not wipe or try to clean cases or other surfaces or disturb the crime scene before the police respond, because you may destroy valuable fingerprint or other evidence.

• It is important to rehearse with all employees what to do in a robbery. Being prepared may help prevent an employee from panicking and provoking violence.

While you cannot prevent an armed robbery, you should do all you can to reduce its likelihood and to reduce financial loss if one occurs. Most importantly, never risk your life by resisting a robber!

(See “Security at home,” below.)

PROPER PROCEDURES CAN CUT THEFT LOSSES

Theft is a very broad term. It takes in such jewelry crimes as distraction and sneak thefts; grab and runs; smash and grabs; switches; credit card, check and money order fraud; internal theft and shipping losses. (See “1994 theft cases by type.”) Each of these crimes has its own characteristics, which jewelers should learn to spot. They also should learn the specialized prevention techniques to deal with each type. (See “How to prevent theft” on page 128.)

Distraction & sneak thefts: Several years ago the FBI estimated that 2,000 members of South American theft gangs especially targeted jewelers. Traveling jewelry salespeople are major targets, but these thieves also often hit retail stores with distractions and other stealth crimes. Stealing jewelry is a business for these loosely affiliated gangs.

Many operate in groups of five or six men and women. Couples, sometimes several at once, will enter a store and attempt to distract the salespeople. Meanwhile, another member of the gang will try to get into a showcase elsewhere in the store or into a safe or work area in the rear, often virtually under a sales clerk’s nose. The JSA has surveillance videos showing how these theft gangs crawl under counters or stand on chairs to reach over them, hold up coats and position their bodies to block a salesperson’s view, all with unbelievable skill.

These gangs try to trick and distract a salesperson to leave showcases unlocked, leave goods out, put keys down or leave them in showcase locks. They hope to sneak into the rear of your store to find repair goods in plain sight on a workbench or to find an unlocked safe. Often they are directed by and follow the signal of an experienced “hombre” (boss) who controls the theft crew. They leave before you even know you’ve been the victim of a theft. You only discover that sometime later.

Whether the suspects are South American theft gangs or other thieves, do not be fooled by such distractions as arguments, commotions, people claiming illness or even people pushing children in strollers. All these techniques have been used to distract salespeople, permitting thefts to occur. Also be wary of people carrying large parcels, umbrellas, coats or other items over their arms that can be used to stash stolen jewelry – especially if such items are inappropriate for the day’s weather or the season. Be alert if people so attired linger near counters.

The rules to follow if you suspect that a theft crew is in your store:

1. Follow the same “alert system” described in the robbery section.

2. Make sure all cases are locked, all goods put away and all keys secure.

3. Draw all employees from the back onto the selling floor to help, or even recruit cooperating personnel by prearrangement from a neighboring store.

4. Watch the suspected thieves intently, be obvious and don’t try to make a sale.

5. Position one staff member at the door, arms folded, watching the group.

6. Pick up a phone and dial while staring at them or, better yet, have a staff member walk out dialing a cellular phone to send the suspects a message.

In many instances they will leave, seeing that you are not an easy mark. However, South American theft gangs are not easily discouraged.

Another stealth technique is to slit the adhesive that holds some glass counters down and lift the counters, either then or when they return later. Someone working with a theft gang will use a razor blade to cut the seal while leaning on a counter, sometimes holding a raincoat or other bulky garment to block the view. Entire trays have been removed in this manner. Be especially careful of customers who place coats or large packages on display case counters. They might be trying to cut or lift the top!

Secure metal edges hold the glass in some jewelry display cases, which prevents the counters from being lifted Metal clips also discourage such lifting even if the glass seal is cut. Finally, to protect against those who slit the glass tops, planning to return or have others return later, inspect showcases for tampering several times a day.

Pick & key gangs: Another problem is that many showcases have generic locks. The same or a small number of different keys will fit all similar showcases made by the same company. Thus, your lock and key are not unique to the showcases on your premises. Furthermore, some showcase locks may be picked easily.

Enterprising members of a well-dressed, African-American gang, some with locksmithing skills, have taken advantage of these vulnerable locks while using distraction techniques. When apprehended, one member of this gang had 162 jewelry display case keys in his possession; another had 134! Several jewelers who attributed losses to employee theft because their showcases did not reveal forced entry actually were victims of this gang. Detecting such “mysterious disappearances” is another reason to have surveillance cameras in your store!

It’s advisable to have unique, pick-resistant locks installed on all of your showcases and to have a vigilant key control system. This includes limiting the number of duplicate keys.

Grab-and-runs: These are very difficult to prevent. The cardinal rule in reducing losses from grab-and-runs is for salespersons never to show more than one item at a time. A thief likes nothing better than to hear his request “to compare these two watches in a better light” granted. Then he can run out with both watches, doubling his take.

Some jewelers may feel their clientele will balk, but many have been successful in requesting identification from unknown customers before showing high-end goods, particularly the kind preferred by grab-and-run artists. Many fine jewelers regularly use a simple sign that says, “My insurance company requires that I ask identification of the customer before displaying this item.” This approach may not be acceptable in every retail setting.

You must be careful to determine if you really “know” the customer, or if the person at your counter merely came in a few days earlier, made an inquiry and cased your operation. Many crimes are committed by such “customers” who have cased a store, sometimes repeatedly over many days, in an effort to lull the jeweler into relaxing his or her guard.

Proper equipment and store design can help discourage grab-and-run artists. Surveillance cameras tend to discourage them. Even the physical set-up can make a store less tempting. If you have a buzzer system on the entrance, a thief may think you can block the door electronically, preventing a quick exit.

Some stores have diamond rooms or alcoves that may make it more difficult for a thief to run. Having the thief sit to examine goods may discourage grab and runs. Not showing high-end goods near the door – where the thief has less distance to travel – also helps. In some case, thieves have been permitted to take goods outside the store “to see them better in the light”! No sooner are they outside the store than they break into a run.

If you do experience a grab-and-run, do not chase the thief because he may have a weapon. You could be hurt in any physical struggle that ensues.

Switches: Switch artists are highly skilled thieves who continue to plague the retail jeweler.

The steps to take to combat switches include:

1. After a customer has handled an item, reexamine it to make sure it is the same item before returning it to the showcase.

2. Show only one item at a time.

3. Don’t turn your back on any customer.

4. Wait on only one customer at a time.

5. If a customer drops an item, be especially on guard for a switch.

6. Use identification tags on jewelry merchandise. Do customers seem unusually interested in the tags? Perhaps they’re planning to return, or have an accomplice return, with an item to switch and a tag just like the one used in your store.

7. Keep all trays completely filled, either with goods or with markers; never leave empty spaces. Then if a space is empty, you’ll know you have a problem.

Smash & grabs: During daytime hours, smash-and-grab thieves either smash a jeweler’s window, grab goods and run away or enter the store and smash one or more cases and flee. “Three-minute” burglaries (see page 132) involve smashing windows or cases when the store is closed; smash-and-grab crimes occur when the store is open and goods are in show windows and display cases.

You can reduce losses from smash-and-grab thieves by using laminated glass on showcases. A significant number of very powerful strikes with a hammer or other tool causes only a small hole in properly laminated glass. Many thieves without time to smash open a case have cut their hands trying to remove goods through such a small hole.

Slowing thieves down puts time on the jeweler’s side, because they want to flee quickly. Laminated glass, at least for showcases containing your high-end goods, is well worth the investment.

Laminated glass also may slow down thieves who want to smash a display window and make a quick getaway. To discourage thieves, try putting a sign in the window indicating that it is made of laminated or “unbreakable” glass.

As an additional deterrent, you may place the goods in the show window in a “shadow box” also made of laminated glass and securely fixed so that the thief will have to break through two barriers to reach your merchandise. The JSA recommends, however, that you never keep goods in a show window overnight, whether it’s in a shadow box or not. When you are closed, all goods belong in your safe.

Finally, there’s been a recent rash of instances in which thieves loosen entire window frames, intending to return later and take out the entire window. A few have succeeded. Thieves created a disturbance near a jewelry store, which permitted them to remove an entire window and then its contents in broad daylight! Inspect your window frames daily and make sure they are secure and not tampered with. Further, make sure the screws or other window frame fasteners are accessible only from inside your premises.

Credit card fraud: There are two main types: fraud committed inside the store through counterfeit, stolen or altered cards and fraud committed through telephone orders.

If salespeople follow the correct authorization procedures and the customer is in the store and signs the receipt, there is rarely a chargeback. But telephone credit card calls represent a greater risk. If you ship on a phony credit card call, you often will get a chargeback, which generally won’t show up for 30 to 60 days when the real cardholder notices that he never bought such an item.

Practically all telephone credit card frauds share common characteristics. These signals should immediately put a jeweler on guard:

• Jeweler receives a telephone call from an unknown person in a distant city who wants to place an order and pay by credit card, without appearing at the store and presenting the card. The caller will provide a credit card number to be approved by the credit card company. If requested, the caller will provide an address and phone number, which are false.

• The caller may represent himself as a doctor or a soldier on active duty getting ready to ship out. Caller will always have a reason for not being able to personally appear at your store. Many calls actually are made by prisoners in state penitentiaries working with outside accomplices.

• The caller never haggles over price or discusses in detail the jewelry purchased, even though it may be a fairly expensive item. While an $800 to $2,000 order is typical, cases have involved the shipment of several Rolex watches.

• The shipping address given is different from the address of the caller, and the shipment is directed to someone other than the caller.

• The caller will request that you ship by Federal Express or UPS overnight. There is usually a sense of urgency; a birthday, wedding or anniversary for which the jewelry is needed is “tomorrow.” The following morning the caller may telephone to confirm that you shipped and request the tracking number. (See “Shipping losses ” on page 130.)

Because of jewelers’ frequent losses to scams involving telephone credit card orders, the JSA strongly recommends you do not ship unless you know the customer. However, if you do decide to assume the enormous risks involved, follow these precautions:

• Be suspicious of someone from a distant city attempting a credit card purchase and asking for speedy shipment of merchandise that is readily available in the caller’s area.

• Ask the bank or credit card company that issued the card to verify the caller’s home address.

• If you suspect a scam, ask the credit card company to contact the cardholder and verify the order.

• Consider calling telephone company “information” to determine if they have a listing for the name and address given by the caller.

• If the situation fits the described scam scenario, do not ship and contact the local office of the U.S. Secret Service, which has jurisdiction.

In-store credit card fraud: This includes use of counterfeit, altered or stolen cards. The basic security rule is that if the customer is in your store, signs a credit card slip and you follow all transaction authorization procedures specified by the card company, you will not have a chargeback if a transaction later proves to be fraudulent.

The use of counterfeit credit cards is widespread. Massive numbers of high-quality counterfeits are being produced in the Far East, particularly in Hong Kong. Some are of such high quality that few jewelers will spot them. In a recent rash of cases, Asians were using counterfeit cards, often issued by Canadian or other foreign banks, to purchase Rolex watches.

Take precautions and make sure a shopper’s name and photo identification match the card. Such a match is no guarantee of an honest purchase, however, because massive amounts of counterfeit identification are now being produced. Make sure cards are properly signed and that any card is consistent with the advisories provided to you by each card company. While high tech, sophisticated counterfeits are not easily spotted, still examine each card carefully to catch crude forgeries or obvious tampering.

There also is massive fraud going on in altering the magnetic stripes on the backs of cards. If you use a magnetic stripe machine in your authorization procedure, the number that your machine prints out should match that embossed on the front of the card. Thieves will alter the magnetic stripe on genuine but stolen cards to insert the number of another card, not their own, that they know has available credit.

Use of so-called “instant credit” is growing in retail jewelry operations. Vietnamese or other Asian suspects recently have been involved in frauds involving these systems. The applicants, who appear to have satisfactory bank credit, apply for instant credit in numerous retail jewelry or department stores. The credit immediately is charged to the limit, often with duplicate purchases of large-ticket items. Frequently a payment is made, but the check returned for insufficient funds. Before the check is returned, however, the customer makes additional large purchases, further extending the debt. When collection is attempted, the customer has disappeared, never existed or gave fraudulent employment and personal information on the credit application. Jewelers are advised to follow the proper application and authorization procedures when granting instant credit.

Checks & money orders: In most financial crimes, a thief’s ability to establish trust is crucial to his success. He may identify himself as a doctor or other affluent or professional person. He may wear expensive clothes and jewelry and drive a Mercedes. He may be a “Saudi prince,” “a rock star” or a “sports celebrity.” He may talk with an English accent or speak to you in a language of your heritage.

Whatever he claims, don’t be taken in! Don’t lower your security standards based on superficial and irrelevant factors! Your policies on how people pay should be consistent and rigorous. Going for that fantastic, totally unexpected sale of high-end watches – to a new customer, at that – may actually make you poorer by the cost of those watches!

What are the characteristics of the fraud artist who tries to con you with bad checks and money orders? He or she:

• Is a stranger in a hurry.

• Wants to give you a personal or certified check after the banks have closed or on weekends.

• Is unable to use a credit card.

Even a call to the bank on which the check is drawn may not protect a jeweler. In many cases the bad check passer calls a confederate and directs him to drain an account as soon as the thief leaves the store. The only full protection is to keep the goods in your store until the check clears and the money is in your account.

1. To discourage thieves and for protection from bad checks, the jeweler should:

2. Require photo identification.

3. Write down the information from the photo identification or, better yet, photocopy it.

4. Compare all signatures carefully.

5. Use a check verification service.

Thieves also use counterfeit or altered money orders. These often will be genuine money orders with an altered amount, such as changing a $15.00 money order to become $1500.00. If someone asks the total amount of a sale to the penny, including tax, saying that he or she will return with a money order, this customer may be setting you up for an altered money order. If the goods leave the store before the money order is successfully deposited, there is the risk of loss.

In one amazing case, a German national succeeded in passing numerous fake German Postal Money Orders to jewelers, who had never seen one before and couldn’t read German! One prestigious jeweler in Beverly Hills allowed him to leave the store with $25,000 in goods paid for with fraudulent German Postal Money Orders.

Don’t jump so eagerly for the big sale that you are taken in by a convincing con man!

Internal theft: Good hiring and supervision will minimize the risks of internal theft. If you bring in people with a clean past and have careful controls, losses can be kept to a minimum.

The JSA has been told about jewelers who said, “I knew he had a drug problem, but I hired him anyway,” and “I knew he was a heavy gambler, but I hired him because he was a good salesman.” It’s hard to believe, but jewelers made such statements about employees who had stolen from them. Unbelievably, one jeweler said he couldn’t fire someone who he’d proven was stealing from him because he needed this top salesman for the December holiday season!

Preventing internal theft begins before you hire. Be sure to have a prospective employee complete a formal job application form. Be sure, too, to confirm information on that application. If there are gaps or former employers who can’t be located or confirmed (deceased, out of business, moved, etc.), you must dig deeper.

Many private investigative services, some highly computerized, can do a background check of a potential hire at whatever depth the future employer may choose. If you are hiring someone for a position demanding trust and responsibility, it may be wise to consider spending $150 or more to confirm details of what the potential employee has told you of his or her past. The type of information you may wish to confirm includes previous employers, education, criminal history, references and motor vehicle information. It’s also wise to interview any applicant more than once.

Certain items require a release by the prospective employee, which you should seek as another cautionary action even if you don’t intend to use it. This can scare the dishonest applicant away. For example, asking permission to check a credit history may save you many later problems. So may telling a prospective employee of your drug screening procedure; anyone using drugs probably will drop the idea of working for you.

Don’t think your problems are over once you’ve hired what you believe is an honest employee. Long-time employees, with 16 years or even 30 years of service, have gone bad in many of the cases that JSA examined. Look for risk factors which can increase financial stress, such as alcohol and substance abuse or a gambling habit. Is the employee apparently living well above his means? If he is, he might be doing it with your money!

Long-time employees can get away with significant fraud because the owner or boss stops being adequately vigilant. You must have a system of checks and balances so that even a trusted employee does not have exclusive control over a function at the store, such as deliveries or refunds. Force employees to take vacations and beware of any supervisor or employee who never takes off and never permits anyone else to perform one of his functions.

The ingenuity of the methods used for stealing from the store is unlimited:

• Removing goods from the store without paying for them.

• Failing to record cash payments for repairs or goods.

• Removing cash from the cash drawer.

• Substituting less valuable for more valuable goods.

• Collusion with a customer on recording a sale.

• Collusion with another employee on recording a sale.

• Incorrectly logging goods shipped to the store.

• Recording inventories incorrectly.

• Ordering memo goods either with or without approval and then playing fraudulent schemes, such as asserting that they never arrived when they actually did.

• Colluding with others by asserting a fictitious robbery or other crime.

Be especially careful with new or part-time employees. They may have come to work for you just so they can steal! Limit their access to very valuable goods. Surprise inventories and audits, and frequent counts, may help keep employees honest.

Be careful to limit who has the combination to the safe. If any employee leaves, even under voluntary circumstances, change combinations and locks for your safe, doors, etc., if that employee knew it or had a key.

Surveillance cameras, usually thought of as deterring theft from external sources, also can deter or provided evidence in cases of internal theft and mysterious disappearance. In addition, employees sometimes have been removed from a suspect list when surveillance cameras clearly showed that a customer was responsible for the mysterious disappearance.

You must have a complete and accurate inventory of your goods to know if you are missing something. A good paper trail of orders, deliveries and sales is essential. So is a proper listing of repair goods and any other possible item that may have been taken in at the store.

Encourage your staff to report instances of employee theft or misconduct. Through training films and sessions for new and veteran employees you can drive home the point that a thief among them hurts everyone – in terms of store profits and salaries, morale and possible false accusations or suspicions of dishonesty. Your employees should be the store owner’s allies in rooting out dishonest employees.

One way to turn in a dishonest employee is to call the JSA anonymously on JSA’s Internal Theft Hotline, 1-800-325-1883. Trained JSA personnel will discuss the caller’s suspicions and bring appropriate information to the attention of the business owner.

Finally, your employees should know that you are serious and intend to prosecute crimes committed by them. When a case of internal theft arises, involve your attorney. This can avoid situations of libel or slander and bring in an objective person and possible negotiator to effect some recovery. The attorney will be less emotionally involved than an owner.

SLEEP MORE SOUNDLY & REDUCE BURGLARY LOSSES

The popular image persists that the safe is the main goal of burglars who break into jewelry stores. Statistics do not confirm this image. Very few burglars – perhaps fewer than two dozen a year – who attack jewelry stores have any intention of attacking the retailer’s safe. Most burglars break in without the equipment, skills or time to enter today’s modern safes.

But hundreds of jewelry store burglaries occur each year. These attackers are after whatever hasn’t been put away in the safe at night – goods left in showcases, repair items left on workbenches or any other goods they can easily find.

There are three main types of burglar:

• “Three-minute burglars” smash through your front door or window and don’t care whether they set off an alarm. They plan to be out in three minutes.

• A second type attempts to enter your store with stealth, either through an opening unprotected by an alarm or by disabling your alarm system. This group seeks exposed goods or goods left out of the safe, though a handful may attack the safe itself. It is a very serious threat to jewelers everywhere.

• Traditional “safecrackers” still pose a risk for jewelers, but seem to represent a dying breed. (See “1994 burglary statistics” and “How burglars get in.”)

Those three-minute burglaries: Today’s typical burglars smash your glass window or door, enter your store, smash your cases, take goods there or exposed on shelves – whatever has been left out of your safe overnight – and leave the premises swiftly. These are called three-minute burglaries because these burglars want to be out no more than three minutes after your alarm sounds.

When you leave jewelry in your showcases overnight, especially when it can be seen from the street, you are inviting burglars to break in. Whether youth gang members and drug addicts or cool professionals, all act alike: if they can see jewelry from outside the store, they will try to steal it! They have no desire to attack your safe.

Nearly half (46%) of the burglaries recorded by the JSA in 1994 were of this type, with many millions of dollars in merchandise taken! What do jewelers tell JSA after these burglaries occur? “It takes too much time and trouble to put everything away, so I take a chance,” or “Lesser merchandise is not put away each night to save staff time.” The trauma and financial loss from a three-minute burglary, however, far outweigh the relatively minor “time and trouble” of properly protecting your store and safely storing your merchandise each night. Following simple procedures can prevent three-minute burglaries or reduce losses if they do occur.

A jeweler who suffers a three-minute burglary not only loses merchandise – too often of surprisingly high value – but also sustains extensive physical damage to store windows, doors and showcases and loses selling time until the damage is repaired. Also significant is the harm to the morale and feeling of safety and security of the jeweler, the jeweler’s family, employees and customers.

To combat three-minute burglaries:

1. Never leave merchandise out and visible overnight, regardless of value. Even if your insurance company permits you to leave goods up to a certain value out of the safe, put everything away.

2. Make sure that you understand your insurance requirements regarding goods left out of the safe overnight. Never leave any goods out overnight in violation of your insurance coverage.

3. If you do not have enough room in your main safe, consider buying a second, less-expensive safe for your lower-end merchandise.

4. Install metal grating or gates, which can be rolled down each night, on the inside of your store windows and doors. Alarms will sound when the glass is broken – even before burglars reach the gates. Metal gates inside the door and windows discourage three-minute burglaries because of the extra time required to cut through them.

5. Proper lighting, good visibility into your store overnight and video surveillance systems capable of running 24 hours a day help keep burglars away.

6. Make sure that mall security will check your store as soon as any forced entry into the mall is discovered. Despite the temptation of dozens of other stores, a jeweler is often the prime or only target of criminals breaking into a mall.

If a criminal sees exposed jewelry inside your store, his business is to break in and take it! Would you leave cash out in your showcases overnight? Don’t leave jewelry out overnight!

Protecting your safe: The “traditional” burglary, in which criminals disable your alarms and enter your safe with tools or burning instruments, has been confined almost exclusively to the New York City area over the last four years. A highly-skilled gang of Yugoslavian burglars hit more than 40 jewelry manufacturing premises during that period, with losses ranging from the low six figures to multi-millions of dollars. These burglars had extensive knowledge of the premises they hit, which was gained through construction work there and in nearby premises. They also had knowledge of alarm systems. While this type of loss is uncommon for retail jewelers, such burglary hasn’t disappeared.

Keeping merchandise in a good safe is the only effective protection against burglars who enter your store with stealth and have time to search and pry open drawers, cabinets and other storage places where you may put lesser merchandise. That’s why you need an adequate safe and a complete alarm system.

A safe is a long-term investment, and it is foolish to skimp. Your insurance company will use many factors, such as location and inventory, to determine what Underwriters Laboratory rated safe you need. The higher the UL-rated safe, the better, with a TRTL 30×6 being the highest. Your insurance company may permit a safe with a lower UL rating if your inventory and certain other risk factors are within certain bounds. However, a safe with the highest rating is well worth the investment. There would be almost no successful burglaries of retail premises if jewelers used UL-rated TRTL 30×6 safes, and put away all their goods each night. This safe has been entered and jewelers victimized in only a handful of cases over the last decade.

UL ratings mean the following: “TR” means torch resistant; “TL” means tool resistant; “30” means that it takes 30 minutes’ effort to make a hole in the safe under laboratory conditions; and 6 means all four sides of the safe (not just the door) as well as the top and bottom are protected.

If your store has a large and valuable inventory, you may wish to keep it in two different high-grade safes, which can be separately alarmed. This will further slow down any burglars, cut losses and reduce your exposure.

Jewelers concerned about burglaries sometimes mention their old “tin can.” No professional jeweler should be able to sleep soundly at night if he thinks the only protection between his livelihood and burglars is a “tin can.”

Time locks on your safe can offer added protection. A time lock will not permit anyone to open the safe outside a specified time range; if a robber were to kidnap you and bring you back to the store, you would not be able to open the safe even under threat. If you do install time locks, put a prominent sign on the safe saying that time locks are in use and that the jeweler can’t open it outside that time. Each jeweler should decide if he wishes to face the risk of provoking violence by such situations.

Alarms, your eyes & ears: The traditional type of safe burglary happens less often because more stores have high-security safes and alarm systems. This upgrading was caused largely by demands from insurance underwriters, who require an appropriate UL-listed safe and a top-rated UL alarm system.

AA-rated alarms require a central station, from which the alarm company may dispatch its own guards, or a link requesting police response. AA protection also requires line security, so that burglars attempting to disable your alarm system by cutting or bridging will trigger an alarm. And AA requires central station guard response, generally within 15 minutes. AA may not be available in some places, but a jeweler should subscribe to the highest level of alarm protection offered in his area.

Motion detectors are part of an effective alarm system. They should be professionally installed by your alarm company. They must be triggered around your safe and at windows and entrance ways and also must detect when someone breaks through your wall and enters your store.

It’s essential to test your alarm system at regular intervals, and walk test any motion detectors. Also schedule professional inspection and maintenance by the installing company on a regular basis. If finances permit and if it is available in the area, jewelers with high-value inventories in burglary-prone locations should consider having two different alarm companies cover their premises. One alarm system would protect the perimeter – that is, all doors, windows and points of entry to your premises; the other would protect the safe. This double alarm set up greatly increases protection if one alarm is defeated, response is somehow rendered ineffective, or there is collusion by dishonest employees of your alarm company. Also try to have two different methods of transmission; if one alarm uses the telephone lines, have the other use a radio-based system.

Alarm dangers: Several particularly dangerous situations related to alarms require special caution. Find out if any premise bordering your store – whether on either side, above or below – is unoccupied or unalarmed. Burglars often smash into your store from a neighboring store that may not be alarmed.

Do not forget your telephone box or junction box, whether you’re in a mall or elsewhere. It has happened that a jeweler’s line connection in the junction box carried a tag saying “jewelry store alarm,” making it easy prey for burglars. Discuss your need for telephone box protection with your alarm company, the telephone company and possibly mall management or your landlord.

Never ignore unexplained telephone trouble or interference; it may be a sign that burglars are setting you up. Make sure the telephone company and/or your alarm company investigate even apparently minor problems thoroughly; burglars could be testing or interfering with your line. The JSA has been told many times by victims of burglary that they started having problems with their phones a few days or a few weeks before the burglary.

Further, if you have been the victim of a burglary, don’t relax and think it won’t happen again. After a burglary, the criminals often wait from a few months to a few years, then hit the same store again, often using exactly the same method.

Always respond to all alarm signals at your store. If the police or alarm company phones after the store is closed to say a signal has been received, call back to confirm the call before leaving the house. Be sure to use the actual number of the police or the alarm company, not necessarily the number given by the caller.

There have been instances of late night calls from armed robbers seeking to lure a jeweler out of the house and into an ambush or armed robbery situation. Only after confirming the legitimacy of the call from the alarm company or the police should you leave the house and go to the scene.

Never enter the premises without the police or alarm company guard present. But be sure to respond to all alarms and determine the reason for them, false or not. It’s common for burglars to set off an alarm on your premises, then fade into the surrounding area to see how long response takes and what the alarm company, the police and you will do.

If you have a disabled alarm or a local telephone outage, it’s wise to put an armed guard in your store during the hours you’re closed until the problem is corrected. And if you have had a burglary or an attempt, you may wish to have a guard remain in the store overnight. If the door, locks or alarm system have been damaged, it’s obviously necessary to keep the premises occupied until the damage is repaired.

Finally, do not authorize your alarm company to approve any irregular opening of your premises when you are closed to business. If you must enter the premises during non-business hours, establish the requirement with your alarm company that you first must personally sign in at your monitoring station.

With the strong protection of a proper alarm and safe, a jeweler can breathe a lot easier. However, for full security, the jeweler must have adequate insurance protection and follow the in-safe and other requirements of his policy so that coverage isn’t impaired.

1994 Crimes against jewelry firms

(As reported to JSA; excludes losses from traveling jewelry salespeople, 1994)

Percentages of incidents by type of crime:

Thefts	51%
Burglaries	26%
Robberies	47%

Percentages of total dollars lost by type of crime:

Robberies	47%
Burglaries	29%
Thefts	24%

Jewelry industry homicides, 1984-1994

(Almost all occurred in retail store robberies.)

Year	Number of homicides
1984	16
1985	20
1986	15
1987	12
1988	20
1989	22
1990	31
1991	37
1992	28
1993	20
1994	20
Total	241

1994 robbery statistics

Average reported robbery loss: $172,000.

Most active month: December.

Least active month: February.

Most active day of week: Tuesday.