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Comment by t-3 | Hacker News Reader

  > In the post-apocalypse or some other lawless society perhaps
    > Detroit man steals 800 gallons
      > Detroit

Jokes aside, it's common policy pretty much everywhere for cashiers and other employees who are not specifically security personnel to never confront shoplifters or other thieves, always comply with robbers, etc. Insurance covers material losses as long as reasonable precautions are taken.

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Detroit has really come up in the past 5 years. I recommend folks visit and check it out. Motor City's downtown actually has decent public transit via bus and light rail, and it's very walkable* during the nice season. Lots of entertainment.

* oh but watch out for bird/lime/lyft/uber scooters literally everywhere and everyone's drunk

Detroit downtown is nice, the Lions win games, what alternate reality is this?

pendulum swings back it seems

I'm really into driving and all, but I've been in Detroit a year ago and it sucked. The only good thing about it was the Henry Ford Museum and the fact that Canada is just across the border.

You probably don't know how it used to be (which is also very different from my grandfather's idea of "how it used to be"). I was there last year, but I was also there for 25 of the past 30 years and the change from when I was a kid is startling. "I recommend folks visit and check it out" is not something someone would have said about Detroit unironically for a long while.

The Henry Ford Museum isn't in Detroit...

It's metro detroit and less than 5 minutes from Detroit itself.

I want to believe, but I also remember 2007-2014 $1 houses, GM bankrupcy and such - is it really different?

It's different, and it's not like it's without its problems. Of course there are still depressed neighborhoods, but there are a ton of development projects going up, lots of new restaurants, bars, nightlife venues, and arts and sports programming. By "coming up" I mean on the upswing, and you can definitely see the difference from a few years back.

Detroit hasn't, downtown has.

Downtown has improved wildly since when even when I was growing up near there in the 80s/90s, but people don't realize how large Detroit is. It's nearly 140 square miles. Downtown is, charitably, 2sqmi, and that's including all the way up to Wayne State. The light rail is the People Mover loop downtown plus a trolley up Woodward, within that range.

The theft mentioned in the article occurred at 8 Mile and Wyoming, which is a 20 minute highway drive from Campus Martius in no traffic. "Clean Downtown" that happened when the city hosted the super bowl and other related efforts have very lopsidedly focused on the downtown area.

Maybe a nitpick, but I think it would be more accurate to say that it has, in recent years, become policy to not confront thieves, even verbally and non-violently because so many of them are now willing to escalate to lethal force on the most trivial of provocations, effectively giving them a heckler's veto[1] on any measure except locking them up or asking the police if they'll find time to arrest.

I know in my grocery store training c. 1998 they definitely told us to give verbal warnings to thieves that we saw what they did, but now, even that much is dangerous.

>Insurance covers material losses as long as reasonable precautions are taken.

No one would get insurance to cover small, regular losses. And even so, insurance isn't some magic pot of gold that restores the losses that lead to closure, it just means the impact is absorbed over everyone. It's still there.

[1] Recent discussion of the concept here https://news.ycombinator.com/item?id=37688954

When I worked at a grocery store in the early 90s we were instructed to not intervene. So the trend isn’t as linear as you propose

There's a video [0] back from 1984 or 1985 with a small up-and-coming band Metallica stealing from a store.

[0] https://www.youtube.com/watch?v=XnPXn19Li6A

Napster: never forget

"insurance" for small losses == higher prices for everyone. Some amount of "shrinkage" whether due to shoplifting, employee theft, or unknown reasons is built into the economics of a retail store.

Exactly. That theft is only ~50 nano-Enrons. Not worth a life.

Love "Enron" as a unit of theft, haha. Did you just make that up?

Yes. I'm in favor of comparing blue collar crime in units of white collar crime so that punishments are proportionate.

Back when I was a gas station attendant, my manager made it very clear that if you're being robbed, the only correct answer was to offer them smokes and help loading or bagging.

This was not Detroit, or even the USA. Think slightly North.

I personally know of an incident where Walmart shelf stacker chased shoplifter of $5 hat out of store and got into a tangle with the getaway driver's car and they ended up in a coma for three months which apparently cost Walmart almost $2m in medical bills.

Where did this insurance myth come from?

Why do people think there's some kind of insurance that has anything to do with people shoplifting from a standard retail store?

Like that's not a thing. There's insurance for catastrophic losses and out of the ordinary stuff but there's not an insurance policy that's paying for people stealing from gas pumps, or grabbing a TV from an electronic store and running out the door.

Of course it's covered. You can insure anything (with very few exceptions protected by law for obvious reasons). An individual case is likely not worth claiming when considering the deductible. 800 gallons might be. But, it can definitely be covered.

You actually can’t insure everything. And you definitely can’t insure everything for less than the cost of just suffering the loss.

There’s no viable or common policies that cover run of the mill retail shrinkage. It’s not a thing. Stores just have to eat it.

Before you argue this point try to consider how such a policy could possibly work.

You just total up what you think shoplifting is costing and tell the insurance company and they give you money? What business model is going on there exactly? How does the overall market work, where does the money come from that is reimbursing you for those losses?

Risk is calculated on a per incident basis. Deductibles prevent frivolous claims. It's pretty simple really. There's no need to downvote just because you don't understand something. That's just petty.

You can’t insure repeated ordinary course of business losses that you have almost total control over and are a core part of your business function.

You didn’t answer my question because it’s impossible to come up with a reasonable answer.

In insurance the cost of losses is borne by people who did not suffer loss.

So the cost of your car crash is borne by someone who didn’t have a crash. But they’re OK with it because they don’t know if and when it’ll happen to them. And an accident is a major loss, so they’d rather pay a little every month to avoid the uncertainty.

But shoplifting is a week in and week out thing. If you have a shoplifting policy that’s reliably more expensive than the shoplifting why would you keep it?

You wouldn’t because it’s not a thing.

You can insure for major losses, robberies and burglaries and so on. But no retail stores can’t and don’t insure for things like someone driving off with a tank of gas, or pocketing an iPad, or a steak, or something. It’s not an insurable risk.

You're making a straw man argument. That it's inadvisable is something we already agree on. That it's impossible has nothing to do with that. It's POSSIBLE despite being inadvisable. Choose your words more carefully next time.

If you make a claim, then your rates can go up because you're now a higher risk.

This is one aspect of insurance aimed at discouraging fraud.

It has nothing to do with fraud.

Even if every business is completely and scrupulously honest this kind of insurance policy is completely unworkable because it's not an insurable risk, it's just a cost of doing business.

It's like trying to buy insurance to cover your monthly cost of airline travel. Like it's not a thing, that doesn't make sense.

You could insure that though. The cost of the policy would be higher than the cost of just eating the losses, but there are insurance companies willing to write the policy if you are stupid enough to pay for it. For things that happen all the time you are better off self-insuring it - that is eating the loss - than getting a policy. Insurance makes sense for rare events that are high enough loss that you would not want to self insure. Any common loss you should self insure, and the same for small losses. Only for larger losses that are not common are you better off with a pool of people who also might have that loss but probably won't - odds are one of you will but not all so you all limit your costs.

Yes that's my point.

And since literally nobody wants a policy that reliably and predictably costs more than not having the policy it's not a thing. And since it's not a thing anyone wants insurers don't really have it.

Yes somewhere there's like someone that might have something similar for sale, sort of. But the point of the comment is that in general businesses don't have it.

I constantly see people say that retailers don't confront shoplifters because insurance will just cover it and it's not worth it. It's true they often don't, but not for that reason, since it's basically not ever insured short of a more extraordinary event.

There are special insurance companies that will insure anything legal if you pay the price which they will figure out. As you say it wouldn't be cost effective, but it still exists if you want it anyway.

It's about insuring employees, not the items. Businesses have insurance so that if a worker is hurt during work, they don't have to directly pay the related bills. That company will assume the risk that an employee helping a customer put a tv on a cart results in injury, but they absolutely won't assume the risk of confronting a potential thief.

Stores like Walmart and Winn-Dixie used to take out life insurance policies on all their low level employees ("dead peasant" policies) so that every employee who died got them a payout anyway. I wonder if that's changed their policies.

Agreed. On the finance side, typically each store has a shrink allowance as a % of sales. The account is adjusted following the periodic inventory audit (usually annually). It rolls up to cost of goods sold so it is reflected in the margin.

So if shrink was forecast at 0.75% of sales but actually came in lower the store would see better margins on their financials.

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