Equation on page -9000 of RJR marketing document shows retailers could make more money if they let cigarettes be stolen than by preventing theft by locking them up.
In September, 1985 ,R. J. Reynolds created a sales presentation about shoplifting called “Pilferage in Perspective,” to try and talk retailers out of the “knee jerk reaction” of moving their cigarettes out of reach of customers in response to high rates of pilferage. The document shows how, in most cases, retailers could make a bigger profit if they let their cigarettes be stolen, due to the industry-paid “placement,” “merchandising” or “slotting fees.” Tobacco companies paid these fees, which were often sizable, to retailers in exchange for placing self-service cigarette displays in specific locations in stores like in front of the cash register, below counter level or adjacent to displays containing candy and toys. The displays were often required to be kept in locations that made it difficult for clerks to oversee them and limit shoplifting from them. Many clerks expressed profound frustration with the arrangement, since they were often held responsible for stolen merchandise. The RJR document contains equations that demonstrate for retailers how their slotting fees more than offset their loss from theft.