Mystery shoppers
National Shopping Service, based in Rocklin, is a major player in sending out undercover operatives
By Jon Ortiz -- Bee Staff Writer
28 January 2005

Undercover agent #143806 strolled into the Sunrise Mall's Sam Goody store and looked for the DVD display.

Stocked? Check.

In alphabetical order? Check. Are "Spider-Man 2" and the latest "Harry Potter" DVDs prominent? Check.

She exchanges greetings with a store employee and examines the store's CD listening station for the newest Destiny's Child, Nelly and U2. Check, check, check.

Agent #143806 - the 34-year-old Elk Grove resident's name is being withheld to protect her anonymity - is an independent contractor for Rocklin-based National Shopping Service, one of the largest firms in the $1.5 billion U.S. mystery shopping "anonymous audit" industry.

Banks, boat dealers, bowling alleys and burger joints all use companies like National to get the unvarnished scoop on what is happening at cash registers and on sales floors.

"We send our operatives out with a specific set of criteria to observe based on our client's wishes," says Matt Wozniak, National's president and chief executive officer. "They answer a set of 'yes' and 'no' questions and support their answers with narratives."

The reports, which are scientifically scrubbed for biased shopper comments, undergo review and fact checking before they are collated and sent to the client via a secure Internet link.

National boasts 160,000 independent contractors internationally who check 30,000 shops each month. It has nearly 100 large corporate clients, including Minneapolis-based Musicland Group Inc., which has contracted for monthly evaluations of its Sam Goody, Suncoast Motion Picture Co. and Media Play stores, a total of 904 locations in the United States and Puerto Rico.

Agent #143806 is part of a high-tech cloak-and-dagger retail world in which agents gather "intel" during "covert actions" that may include video surveillance.

Musicland wouldn't say much about what it wants mystery shoppers to report, but some items are common: Were you greeted with a smile and eye contact? Was the bathroom clean? Was your change counted back to you?

Other assignments require using hidden cameras, tiny tape recorders and digital video cameras disguised as shirt buttons to record scenarios devised by the client company. Some recordings wind up in corporate boardrooms or on training videos.

"What the client does with the information is up to them," Wozniak says. "Many clients have reward programs for high scores or base promotions on the results."

Occasionally, says Musicland spokeswoman Laurie Bauer, Musicland will "move on" a manager for consistently low scores.

Mystery shoppers earn from $5 per visit to $200 for a "video shop." Sometimes the experience itself is the payment, maybe a three-day trip to Europe flying first class or a week at Club Med. Those missions are uncommon, however, and generally go to contractors with plenty of experience.

"We have one guy who makes $5,000 to $6,000 every month," says Wozniak. "This guy hustles, he's dependable and he even subcontracts some jobs."

Agent #143806 says she earns about $500 per month working part time for five mystery shopping firms.

"It's a pretty good job," says the stay-at-home mother of three children. "I can pick what I want to do, and a lot of the time I can take along my kids, like when I'm shopping apartments."

On this particular weekday, #143806 spends 20 minutes in Sam Goody, then leaves the store to answer two dozen questions about the experience from secretly jotted notes.

Musicland executives have nothing but praise for mystery shopping, saying it has helped the bottom line since the company started using it in 2003.

"We found out that nearly a third of our visitors couldn't find what they wanted," says Musicland spokeswoman Laurie Bauer. "So we started hiring and training people who are really into customer service. The result was an average 20 percent increase in dollars per register transaction."

The origins of mystery shopping are hazy, but the best guess is that it started about 65 years ago. Ex-police officers owned most of those early businesses and promoted the service as a way to stop employee and customer theft.

Today, about 1,000 mystery shopping firms operate in the United States, according to the Mystery Shopping Providers Association, a Dallas-based trade organization. A few retailers handle mystery shopping in-house.

"We're one of the five to 10 biggest companies that get 80 percent of the business," Wozniak says. "The industry is consolidating."

It is also trying to pushing higher standards to cut down on its "flake-out rate" - the 50 percent of shoppers who sign on but don't follow through on assignments.

The MSPA has come up with a 15-minute online program that for $15 teaches shoppers about things like finding shopping jobs, expectations and pay. Those who pass the test are "silver certified" and can attend a one-day seminar for "gold" certification. The $99 class covers clandestine tricks of the trade and reinforces the industry's professional standards.

"You don't have to be certified to mystery shop, but when we see that someone has the training, they move to the front of the line," says Tony Yorba, National's executive vice president. "We know that certified people have taken the time and money to be trained, so they're likely to be reliable."