Retailers Should Brace for Sharp Increase in Shoplifting Activity, Checkpoint-Commissioned Studies Say.

Business Editors

THOROFARE, N.J.--(BUSINESS WIRE)--Dec. 4, 2001

Shoplifting Expert Warns Economic Woes, Post-9/11 Trauma Will Spark

Rise in Holiday Season Retail Theft; Retail Forward Study Indicates Shoplifting Surge Will Extend Into 2002

Checkpoint Systems, Inc. (NYSE:CKP), a leading provider of supply chain management and security solutions worldwide, is urging retailers to prepare for a marked increase in shoplifting activity during the 2001 Holiday season and into 2002.

Checkpoint's cautionary note is based on the results of two recently-commissioned studies, a Holiday 2001 shoplifting activity analysis by leading shoplifting authority and clinical psychologist Will Cupchik, Ph.D., author of Why Honest People Shoplift Or Commit Other Acts Of Theft, and a separate analysis of inventory shrinkage for 2002, conducted by Retail Forward, Inc., the global retail market research and consulting firm. The studies indicate a sharp rise in shoplifting activity, beginning this holiday season and extending into 2002.

"While retailers are aware that shoplifting generally increases around the holidays, the economic and social landscape for this holiday season, and the coming year, are unlike any that we have seen for decades, perhaps ever," said Dave Shoemaker, group strategic vice president, Checkpoint Systems. "Dr. Cupchik's professional insight into the shoplifting behavior he anticipates for the 2001 Holiday season, and the findings from the Retail Forward study, will go a long way to help retailers understand why they should take the steps necessary to safeguard their merchandise."

Dr. Cupchik's Analysis

Dr. Cupchik cites trauma related to the events of September 11th, stress and financial pressures due to the ailing economy, and widespread unemployment as leading factors driving the anticipated increase. "The year-end Holiday season has consistently shown a rise in shoplifting behavior. Most sadly, during this coming holiday season, the tragic incidents of terrorism, the fragile state of the economy, and the loss of a fundamental sense of security and safety will most likely result in a major increase in shoplifting, perhaps as much as two- to three-times the usual incidence," said Dr. Cupchik.

Based on his nearly three decades of clinical forensic research, Dr. Cupchik has developed the Loss Substitution By Shoplifting Hypothesis. First published in the Bulletin of the American Academy of Psychiatry and the Law (1983), Dr. Cupchik hypothesizes that in the majority of cases of stealing by usually honest persons, the individuals involved have experienced what they considered unfair, personally meaningful losses of persons (e.g., spouses, children), places (e.g., homes) or things (including the health of themselves or significant others). Acts of shoplifting often result in response to this perceived meaningful, unfair loss.

"When some people are highly stressed, they may be inclined to steal, whereas under more normal circumstances they would not. These findings are of particular relevance at this time generally, and in New York City in particular," Dr. Cupchik said. "In New York City this coming holiday season, the tragically unfair and most personally meaningful losses of loved ones in the World Trade Center terrorist act, as well as the loss of tens-of-thousands of jobs, to say nothing of the loss of a fundamental sense of security and safety suffered by most New Yorkers, may well result in a major increase in shoplifting."

Among Dr. Cupchick's Findings

-- Shoplifting typically increases during the holidays largely due to the
gift-giving tradition, coupled with widespread product advertising which act as
stimuli, encouraging a powerful "acquisition response," which can lead to
incidences of shoplifting. While most holiday shoplifters will be "typical
thieves," a sizable minority of these theft offenders are likely to be
distinctly atypical theft offenders -- reputable, ethical individuals who are
normally among the store's most loyal, paying customers.

-- Most consumers try to compensate themselves for the difficulties and
stresses they experience through food, drink, or other material items. In
markedly abnormal, highly stressful times, this behavior increases and often
leads to increased instances of shoplifting.

-- Certain regions of the country, including economically depressed areas and
socially isolated areas, are more susceptible to increases in shoplifting at
the holiday season. These include large cities such as New York City, Boston,
Washington and Los Angeles.

Retail Forward Study

A study commissioned by Checkpoint Systems from Retail Forward, Inc., the global retail market research and consulting firm, forecasts that the current economic downturn will increase inventory shrinkage from shoplifting by $1 billion in 2002. The report illustrates that in contrast to the slow growth in shoplifting that coincided with the economic boom of the 1990s, the current depressed economic climate will lead to a pronounced rise in shoplifting. The economic model developed for this study indicates that over time, shoplifting can best be explained by three variables: unemployment claims, the savings rate and retail prices. The study goes on to show that over the period from 1970 to the present

-- Rises in unemployment claims were accompanied by an increase

in shoplifting.

-- The falloff in shoplifting that began in the early 1990s

coincided with a marked decline in the saving rate as incomes

and wealth soared.

-- Shoplifting tended to rise during periods of high inflation

and rises in the price of consumer goods.

The study also indicates that

-- There is a definable link between shoplifting and age.

Fifty-eight percent of persons arrested for theft in 2000 were

under the age of 25.

-- Persons between the ages of 15 and 24 represented the highest

share of persons arrested for theft in 2000, indicating that

as this portion of the population continues to grow,

shoplifting will rise.

"What we learned from our research, and the economic model on which our study was based, is that the uptick in shoplifting activity will be with us for at least as long as the economy continues to be in the doldrums," said Frank Badillo, senior retail economist, Retail Forward, Inc.

About Will Cupchik, Ph.D.

Will Cupchik, Ph.D., is the author of the book, Why Honest People Shoplift or Commit Other Acts of Theft: Assessment and Treatment of 'Atypical Theft Offenders.' Dr. Cupchik operates a private practice and oversees the "Atypical Theft Offender -- Intensive Intervention Program" in Toronto, Canada. He was formerly the Psychologist-in-Charge, Forensic Outpatient Psychological Services, at the Clarke Institute of Psychiatry in Toronto. He has been awarded a "Certificate of Professional Qualification in Psychology" (CPQ) by the Association of State and Provincial Psychology Boards (ASPPB), the alliance of state, territorial and provincial agencies responsible for the licensure and certification of psychologists throughout the U.S. and Canada. A more recent, revised version of Dr. Cupchik's book Why Honest People Shoplift or Commit Other Acts of Theft is now available in bookstores and can be downloaded in its entirety as an ebook through www.booklocker.com/bookpages/shoplift.html.

About Retail Forward, Inc.

Retail Forward, Inc. is a globally focused management consulting, market research, and executive development firm specializing in retail intelligence and strategies. With a heritage in retail consulting dating to the founding of Management Horizons Inc. in 1967, and later as the Management Horizons division of PricewaterhouseCoopers LLP, the principals of Retail Forward, Inc. have built a successful track record working with retail and consumer products executives for business growth and performance improvement. The company's mission continues to be to advance the frontiers of knowledge and understanding of emerging issues affecting retailing and consumer products marketing. Retail Forward is headquartered in Columbus, OH. The firm's Web site is at www.retailforward.com.

About Checkpoint Systems

Checkpoint Systems, Inc. is a multinational company that manufactures and markets labeling systems designed to improve efficiency, reduce costs and provide value-added labels solutions for customers across many markets and industries. Checkpoint is a leading provider of EAS and RFID systems, source tagging, barcode labeling systems, hand-held labeling systems and retail merchandising systems. Applications include automatic identification, retail security and pricing and promotional labels. Operating directly in 30 countries, Checkpoint has a global network of subsidiaries and provides professional customer service and technical support around the world. Checkpoint Systems, Inc.'s Web site is located at www.checkpointsystems.com.

RetailForward Study

A copy of the study in its entirety is available upon request.