Source Tagging For Retailers Proving Popular and Effective

Resulting in Dramatic Reductions in Shrink, Decreases in Merchandise out-of-Stock, Increases in Sales and Customer Service

THOROFARE, N.J. – Dec 2014 – Checkpoint Systems, Inc. (NYSE:CKP), a leading global supplier of merchandise availability solutions for the retail industry, today announced that 45 percent of the top-50 global retailers as identified by Deloitte are now source tagging some merchandise categories using Checkpoint Systems processes.  

Source tagging shifts the security tag application process from a manual labor-intensive process at the store to an automated process at the point of manufacture, allowing store associates to focus on servicing their shoppers rather than applying tags.  With a source-tagging throughput between 15,000 and 30,000 labels per hour, the process saves retailers a considerable amount in store labor costs while ensuring application compliance, protecting brand presentation and enhancing their customers’ shopping experience.

“Why source tagging? It seems like a ‘no brainer’ to me. Today, it remains a driver of incremental sales as much as it is a shortage management tool,” said industry expert Robert L. DiLonardo, principal of Retail Consulting Partners, LLC.

Checkpoint’s source tagging program is used by 45 percent of the top-50 global retailers throughout the world as identified by Deloitte in a recent research. These retailers represent different vertical markets, from drug/pharmacy, to discount store formats, to supermarkets, to general apparel and specialty accessories like shoe stores. For example, U.S. retailers include CVS/Caremark and Family Dollar among many others.

At a recently held 2014 National Source Tagging Symposium attended by a wide range of consumer package goods manufacturers and retailers, including Mike Silveira, vice president, Loss Prevention CVS/Caremark and Mark Mellor, divisional vice president, Loss Prevention, Family Dollar, a Fortune 500 retailer noted that EAS and source tagging are the backbone of his company’s merchandise protection program. He added that source tagging provides the first line of deterrence and detection of shoplifting activities and that visible source tagging was proven to provide even greater deterrence over hidden labels. Attendees, who met again this month, agreed that visible source tagging should be the key focus of the industry.

In fact, globally, millions of SKUs are being source tagged annually using Checkpoint’s program. Over the past 20 years, Checkpoint has evaluated over 75,000 different merchandise categories in its globally located Source Tagging Evaluation Centers.

“We know that if we protect high-value merchandise, there’s a corollary impact on sales and gross margins. High-value merchandise can be out on display, yet protected, creating a better in-store experience and improving our in-stock position,” commented Julie Giblin, VP of loss prevention at Family Dollar.

Internationally, retailers like the Bennet Group in Italy have had positive results with source tagging. Luigi Forgione, a director of the Bennet Group, said, “Checkpoint’s support has been invaluable. The company has worked closely with our technical team to create a solution, which offers superior merchandise protection without affecting the store aesthetics.”

Berlucchi, an Italian winery company, is source tagging today its Cuvee Imperiale Brut and Cuvee Imperiale bottles. The company protects at source its bottles against theft without compromising the aesthetics or the image of the brand on the bottle.

Among the reasons for the rise in source tagging use by retailers and CPGs is that product categories that were previously considered too difficult to tag, such as liquids, perishables, some specialty apparel, hard and soft goods, meats and even small cosmetics can now be source tagged.  The sales velocity for some of these merchandise categories make it difficult to tag at the store, but without protection, the merchandise became an easy target for shoplifters creating out-of-stock situations and negatively affecting shopping experience. 

According to Per Levin, president and chief sales officer for Merchandise Availability Solutions for Checkpoint Systems, "Checkpoint's source tagging program is a proven and evolving high-impact program both on store sales and for a reduction in shrink around the world. New products in combination with new methods and more partners are creating increasing momentum in the market place, making it further attractive to join this program today."

A source tagging guide from Checkpoint that includes best practices on how to implement a source tagging program is available here.

About Checkpoint Systems, Inc. (www.checkpointsystems.com)

Checkpoint Systems is a global leader in merchandise availability solutions for the retail industry, encompassing loss prevention and merchandise visibility. Checkpoint provides end-to-end solutions enabling retailers to achieve accurate real-time inventory, accelerate the replenishment cycle, prevent out-of-stocks and reduce theft, thus improving merchandise availability and the shopper’s experience. Checkpoint's solutions are built upon 45 years of radio frequency technology expertise, innovative high-theft and loss-prevention solutions, market-leading RFID hardware, software, and comprehensive labeling capabilities to brand, secure and track merchandise from source to shelf. Checkpoint's customers benefit from increased sales and profits by implementing merchandise availability solutions to ensure the right merchandise is available at the right place and time when consumers are ready to buy. Listed on the NYSE (NYSE: CKP), Checkpoint operates in every major geographic market and employs more than 4700 people worldwide.

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