Let's imagine for the moment that you own a large department store, and you are having a big problem with shoplifting. (You're not alone -- retail stores lost $26 billion last year to shoplifting!) What are you going to do? You cannot let it continue, because every month your accounting system tells you that you are losing thousands of dollars to theft. It forces you to raise your prices, and that means you have to charge more than the store next door. That can make it very hard to compete, especially if the store next door is successfully discouraging shoplifting.

As a retailer focusing on the problem of what's known in the industry as loss prevention, you basically have three methods at your disposal to slow the shoplifters down: (1) You can watch everyone in the store like a hawk and make sure they don't steal anything. You can do that using security guards and/or video survelliance systems; (2) You can make things hard to remove from the store by bolting them down, attaching cables, putting things in display cases and behind the counter; (3) You can use a system that attaches special tags onto everything so that an alarm goes off whenever a shoplifter tries to walk out with an item. In this edition of How Stuff Works, we'll look at each of these options in more detail.

How Does Video Surveillance Work?
Our first option involves the use of deterrents such as security guards, observation mirrors (that allow store clerks to see throughout the store) and closed-circuit television (CCTV) surveillance systems. Most large stores use some combination of these techniques, which were among the earliest tools used to combat shoplifting. Smaller businesses, unable to afford security guards, were able to install videocameras -- usually in a prominent place so that shoppers knew they were being watched -- to record activity in the store. Later, the retailer could review the tapes on a VCR, observe shoppers behaving suspiciously (sometimes even stealing) and note the vulnerable displays or areas in the store. The problem with this record-and-review system is that some shoplifters get away with stealing. On the other hand, experts say, the system has merit in that it allows for possible recognition of repeat offenders (something that is prevalent among shoplifters). By reviewing these tapes, the store owner can also learn about theft patterns and get ideas about ways to deal with them.

Your imaginary department store would probably use electronic surveillance a bit differently than smaller businesses. You might have security staff monitoring store activity on closed-circuit TV as it happens in an effort to prevent shoplifting. Today, there are even systems that allow retailers with several locations to monitor stores and distribution centers from a single location. These remote surveillance systems allow users to send full-frame video image streams over high-speed phone lines to other locations and to electronically store digital video images for review or evidence.

And in larger stores, cameras are often less visible. Next time you're in your favorite department store, look around. High-speed, high-resolution digital cameras may be mounted in smoke detectors, sprinkler heads, thermostats or clocks. (It's popular to mount cameras in ceiling tile domes (they're bubble-like and tinted so no one can see where the camera is pointed). From this vantage point, a pan/tilt/zoom camera can swing about and follow someone around the store. (If security is not monitoring and operating the camera, it can be set up to pan automatically but will not follow someone around the store.)

Video cameras used for security purposes don't look anything like the video camera your family has at home -- they're becoming smaller and more specialized. A standard surveillance camera might be in the neighborhood of 4 inches long by 2 1/2 inches wide with a lens on the end, according to Jeff Bates of ADT Security Systems in Raleigh, N.C. A hidden camera might be a board camera, which basically is a 1 inch by 1 inch square computer board with a tiny lens, perhaps 1/4 inch in size. These cameras are designed to two specifications, experts say: they must be small and easy to hide.