STORES BRACE FOR HOLIDAY CRIME $3.5 BILLION IS EXPECTED LOSS, MUCH BLAMED ON EMPLOYEES.

Byline: JULIA M. SCOTT Staff Writer

Hiding behind jolly elves and twinkling icicle lights is a dark, slimy underbelly of Christmas and the winter holidays.

While many sing off-key carols, sip eggnog, and in general spread holiday cheer, thieves target stores and shoppers during the busy holiday season.

``Retail losses are a staggering problem,'' said Joe LaRocca of the National Retail Federation. ``With the flood of shoppers in the malls, there's more people and there's more crime.''

Retailers expect to lose $3.5 billion this holiday season, almost 2 cents of every dollar spent, according to the retail group. The most popular items to steal are power tools, denim, infant formula and DVDs.

Culprits get creative when it comes to pawning goods.

Some return a product after wearing it, rendering it unsalable. Others swipe goods the old-fashioned way, slipping them under their jackets.

More sophisticated crooks create fake receipts and false bar codes, buying items at a low price and returning them for a higher price.

Others use stolen credit cards to buy thousand-dollar gift cards that they sell on Web sites or to seamy wholesalers. Organized groups of criminals find loopholes in security and solicit the aid of dishonest workers, though they usually shy away from packed stores to avoid detection.

The biggest share of theft comes from employees, according to the 2005 national retail security survey, conducted by professor Richard Hollinger at the University of Florida.

``The reason is that one of your prime controls to stop theft is your employees,'' said analyst Richard Giss of Deloitte & Touche. ``There is less security and controls around preventing employee theft.''

Workers may steal outright, give unauthorized discounts to friends, or pack items that were not paid for in a bag. Slick employees may pocket the gift card you paid for and instead hand out a blank one.

Retailers are especially vulnerable during the holidays when they hire temporary employees, who have less of a stake in their jobs. Companies need extra employees to handle the holiday rush but don't always have the resources to check their backgrounds as extensively as they do for permanent workers.

``They've got to walk a very delicate tightrope between unacceptable theft and unacceptable employee shortage,'' Giss said.

Losses due to theft have pushed two out of every three retailers to change their return policies, according to the federation. Some require receipts and that the original tags be attached to the merchandise. Others set time limits on returns.

Crime outside of retail theft also rises during the holidays. Thefts and burglaries from vehicles shoot up because many shoppers leave their purchases in the car, said Los Angeles Deputy Police Chief Michel Moore.

``We do redeploy personnel to focus on the increased flow,'' said Moore, who assigns extra patrols in parking lots and crowded areas.

Citizen volunteers are also getting involved this season.

Capt. John Sherman is training civilians who own horses in the West Valley to be another set of ears and eyes for police. The volunteers will patrol on horseback but won't carry guns or arrest people. When they see trouble, they'll alert cops.

The Westfield Topanga and Promenade malls increase the on-site security to match the doubling of shoppers, said spokeswoman Brandi Friel.

``Obviously the safety of our shoppers is our Number One priority,'' Friel said. ``We overcompensate, essentially, and always err on the side of safety.''

julia.scott(at)dailynews.com

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HOLIDAY SAFETY TIPS

Stash gifts in the trunk where they are not visible. Three out of every four cars that are broken into had a valuable item in plain view.

Keep your gift card receipt in case there is a disagreement about the original amount on the card.

Shop during the day, or with another person at night. Avoid dark areas where no one else is around.

Leave the phone numbers to cancel a credit or bank card at home in case they are stolen.

Beware of strangers approaching you. Con artists may try various schemes to distract you, with the intention of nabbing your cash or parcels.

Don't forget to lock your car.

SOURCE: Police Capt. John Sherman, LAPD and National Retail Federation

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HOLIDAY SAFETY TIPS (see text)