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First-of-Its-Kind Study Finds Alpha High-Theft Security Device Provides Drop in Shrink and Rise in Sales for Razor Blades at Large U.S. Retailer

May 28, 2008

THOROFARE, N.J.–(BUSINESS WIRE)–May 28, 2008–Checkpoint Systems’ Alpha Division (NYSE: CKP), a global leader in innovative security and merchandising solutions for high-shrink products, today presents the first study on razor blade shrink in the retail sector.

The study was conducted by Read Hayes, Ph.D., Director of the Loss Prevention Retail Council (LPRC), based in Florida, U.S., and a well-known expert on retail security and loss prevention. The research assessed the effectiveness of the Alpha Keeper(TM) system in reducing shrink, increasing sales, affecting out-of-stock occurrences and gauging perception from retail customers and employees alike. The project was conducted during the latter part of 2007 in several stores of a large grocery store retailer in the United States.

Keepers are clear polycarbonate cases with specialized electronics designed specifically to protect high-theft merchandise. The merchandise is kept safely inside while still allowing customers to browse the shelves and visually examine the products inside. This enables customers to make purchasing decisions much more easily on products that would otherwise be
located in another area of the store, inside a locked cabinet, behind a shelf, or otherwise require assistance of a store employee – adding time and hassle to the customer shopping experience. Instead, customers can easily take the products in the Keepers off the shelves, and the Keepers are unlocked at the cash register when the customer purchases the products.

Results of the study, which involved the use of Keepers with 69 different wet shaving blade and razor products, show Keepers significantly reduce shrink and also increase sales compared to the normal options at the control stores. In all test stores, shrink was significantly lowered, and the positive effect of decreased shrink became greater as more time elapsed. Sales of the products also increased due to increased availability of products on shelves without the need for associate assistance and a decrease in out-of-stock merchandise. When such factors as costs of goods, reduced shrink, increased sales, cost of labor, cost of capital, time and out of stocks are measured, the study found Keepers pay for themselves in about seven months, and had an internal rate of return of 139% during the test period.

The study also found that retail customers find it easy to select and access the appropriate merchandise, and they react positively to the aesthetic design of the Keepers. On-shelf access is appreciated, so that they don’t have to seek assistance from store employees to get the product from another area of the store or unlock it from a cabinet.

Cashiers noticed more razors coming through the check-out lines due to the on-shelf availability. They stated that Keepers are easy to use and require minimal additional time to remove products from Keepers. Interviewed employees and customers both affirm: “Keeper systems are an excellent combination of security and accessibility”.

Dr. Hayes states: “This is the most rigorous evaluation research in stores that supports the efficacy and effectiveness of an asset protection solution as measured by real-world ROI results we’re aware of today. Security and Loss Prevention Managers can use the study results to help justify retailers’ investments in similar security solutions for their stores.”

Larry Yeager, Vice President and General Manager, Alpha Division, added: “We were very pleased to sponsor the LPRC research. We know our product solutions have a quick ROI in terms of shrink reduction, and this research confirms this fact while adding compelling evidence about their positive effect on retail sales.”

About the Loss Prevention Research Council

The Loss Prevention Research Council (LPRC) uses fact-based research to develop crime and loss control solutions that improve the performance of its members and the industry. The LPRC was founded in 2001 by leading retailers including Target, Wal-Mart, OfficeMax, CVS, The Home Depot, Barnes and Noble and others in an effort to support the fact-based needs of the Loss Prevention industry. To date, the LPRC has conducted over 40 real-world loss prevention research projects for retailers and partners. The research involves industry publications, research literature, our members, innovative suppliers, academia, and in-house data. The LPRC explores, develops, and measures the loss reduction and financial impact of these initiatives using scientific methods like e.g. field experimentation, statistical analyses and benchmarking among others. LPRC also conducts confidential, proprietary research, training, expert witness and consulting for both members and non-members. For more information, visit www.lpresearch.org.

About Checkpoint Systems, Inc.

Checkpoint Systems, Inc. is the leading supplier of retail shrink management solutions. Checkpoint’s global team helps retailers – and their suppliers – reduce theft, increase inventory visibility and provide consumers with greater merchandise availability through the company’s rapidly evolving RF technology, expanding shrink management offerings and Check-Net labeling solutions. Checkpoint has more than one million RF devices installed in stores today and has secured more than 100 billion products. Scaling cost efficiently, Checkpoint’s solutions provide increased revenues and profits to a fast-growing community of successful retailers and a superior experience for their consumers. Checkpoint acquired Alpha in November 2007. For more than 30 years Alpha has provided retailers with the most innovative and technically advanced products engineered to protect high-theft merchandise. Every Alpha product is designed to defend retailers’ bottom lines by helping them reduce theft and increase sales. Listed on the NYSE (NYSE:CKP), Checkpoint operates in every geographic market and employs 3,200 people worldwide. For more information, visit www.checkpointsystems.com or www.alphaworld.com.