Bill Turner, LPC, has been a reader and contributor to Loss Prevention magazine since its inception in 2001. Now, as the publication celebrates its 15-year anniversary, Turner looks back at the early history of Loss Prevention magazine (now known as LP Magazine) in a feature article in the September-October 2016 issue.

The idea for LP Magazine initially received a great deal of support from retailers and vendors in the loss prevention and asset protection space. From the article:

“As Executive Editor Jim Lee and Managing Editor Jack Trlica tell the story, it began with the belief that retail loss prevention professionals needed their own magazine. The magazine’s mission, as originally drafted, was to ‘provide the industry with a high-quality, contemporary magazine of high interest to retail loss prevention management and professionals.’ The concept was introduced in June 2001 at the National Retail Federation (NRF) loss prevention conference in Vancouver, British Columbia. The response from the majority of the LP professionals and vendors in attendance was ‘it’s about time.’

Turner examines the magazine’s mainstay subjects since the nascent days of the publication in detail. These topics make up the building blocks of the magazine’s foundation and are still central to the loss prevention industry today. Some of these subjects include:
• Shoplifting and Organized Retail Crime (ORC)
• Crisis Management
• Fraud
• The National Retail Security Survey (NRSS) and Employee Theft
• Loss Prevention Technology
• Shrink Reduction and Loss Prevention Programs
• People, Education, and Diversity

Check out “Fifteen Years of Loss Prevention” to read the full article and learn more about the history of Loss Prevention magazine’s first five years. You can also visit the Table of Contents for the September-October 2016 issue or register for a free subscription to the magazine.

The post 15 Years: Looking at the History of Loss Prevention Magazine appeared first on LPM.

EDITOR’S NOTE: This article is based on the experiences of a well-known retailer who implemented a facial-recognition security camera system. Because of the potential value of this technology to the retail industry as well as the critical issues surrounding its deployment, the executive who leads this initiative approached the magazine to offer his insights on the condition of anonymity. Therefore, the names of the individual and the company have been changed.

“We’re seeing shoplifters—known shoplifters—come up to us and ask permission to buy something.” Is this some kind of loss prevention Twilight Zone, or the delusions of a loss prevention associate who has spent too many hours watching surveillance video? No, this is everyday life in stores at a leading retailer who has recently deployed a facial-recognition system. And it’s just one of the changes that have led the company’s head of LP to call facial recognition a game-changing loss prevention technology.

“We now know within seconds of a person walking in the store if they’ve previously been caught stealing from us,” says Tom Smith, vice president of loss prevention for Store-Mart. “We now know which hours of the day see the most shoplifter activity. We now know that 26 percent of the people we detain, we see again in the brand within one month, on average 13 days later. We never had a way of knowing things like this before. This is stuff that LP associates will salivate over. It’s going to be a game changer.”

Suppose Johnny Johnson is caught shoplifting at a Store-Mart branch. He’s detained, photographed, and given a barring notice. Johnson’s photo is entered into Store-Mart’s database of known shoplifters, becoming an “enrollee” in the system.

Three weeks later, Johnson walks into Store-Mart again. Within five seconds, the system has captured his image from the store security cameras, compared it against every photo enrolled in Store-Mart’s database, found a match, and sent an alert to the in-store loss prevention associate’s (LPA) smartphone. The LPA looks at his phone, and Johnson’s name, photo, and detention history with Store-Mart pops up. The LPA verifies that the photo in the alert actually matches the person who just walked in. Then the associate approaches and says, “Mr. Johnson, you’ve previously been given a barring notice from Store-Mart. You’re not allowed to be here. Please leave.” And Johnson walks back out. So, within a minute or so of walking in, a known shoplifter has left the store, empty-handed.

Facial-recognition systems made the leap from sci-fi to reality around a decade ago, but until the past year or two, they never really worked. Governments were the first adopters, targeting fugitives, terrorists, spies, and other high-priority targets. Retailers have had their eyes on the technology for some time, but until recently, the price point was simply too high to justify.

Now that the detection algorithms have been refined to enable higher identification accuracy, and solutions providers have lowered prices to a range accessible to retailers, facial-recognition technologies are poised to surge into the retail world. And with megapixel IP cameras now standard, many stores are already equipped with the necessary hardware. All that’s left to do is plug them into the system.

How the System Actually Works

First, a database is populated with the enrollees’ facial biometric information. Photos of known shoplifters are analyzed for identifying biometrics, such as length of the nose, distance between the eyes, and that mole beside the left nostril. Biometric profiles consisting of anywhere from tens of thousands to millions of these identifying parameters are compiled for each enrollee and linked to their name, photo, and detention history. Only people who are known to have committed criminal activity in the store are enrolled; average customers aren’t ever brought into the equation.

After that, it’s just a matter of connecting the database and the detection algorithms to the store’s security cameras. Joe Rosenkrantz, CEO of FaceFirst, a leading biometrics platform provider, describes the process. “A server in the store detects and tracks faces on every frame of video at 30 frames per second. So, we have a very complex scene of people walking in the front door, and we detect every face on every frame of video,” Rosenkrantz explains. “The system isolates the best representation of each person. We analyze each frame for lighting conditions, pitch, and yaw. We might get 50 pictures of a person, and the system, in near real time, analyzes every one to get the best representation.” Each image is scored and the best one has its biometric profile extracted and compared against each profile in the shoplifter database. If no match is found, the image is immediately deleted. If there is a match, an alert message is sent to the designated store associate’s smartphone.

Attached to the alert message is the original photo used to enroll the shoplifter in the system, so the store associate can verify that the person who just walked in the store really is the same person as the one in the database. The retailer can choose to set different kinds of alerts for different enrollees. Smith has created several.

Most enrollees generate approach alerts, in which case the LPA addresses the person by name, reminds them that they signed a barring notice, and asks them to leave. If a person has been definitively observed shoplifting, but was not able to be detained, they may be enrolled using a good photo of them from the CCTV systems footage, and an observe alert will be issued. In this case they won’t be approached, but will be watched carefully. A person known to be associated with ORC will have an ORC alert issued, leaving it to the discretion of the LPA as to whether they should make an approach or call the police. In addition, there are alerts advising the LPA to immediately call the police. Smith says, “We already have one guy who’s a 911 alert. We had approached this person three times, and the fourth time, he had already started stealing after being in there for 20 seconds. When we approached him, he physically assaulted our agent and ran out of the store. So, we converted him to a 911 alert.”

The Value of a Photograph

What the facial recognition security camera technology does is dramatically increase the value of a digital photograph of a shoplifter. Information that has been filed and forgotten can suddenly be put directly into the hands of the person best equipped to act on that information. And it happens entirely automatically, and at precisely the time that information will be most useful.

Retailers who have been diligently photographing each shoplifter they detain may be sitting on a digital gold mine, since enrolling these photos into the system effectively extends the value of the original detention. Suppose a person is detained for a $50 theft and enrolled. Now every time they are recognized and approached, that’s another potential $50 savings—residual value from the original detention.

And the savings extends beyond just the value of the merchandise. There is also substantial savings of store associates’ time. “Just think,” Smith says, “of the LPA who gets an alert, makes the approach on a shoplifter, and tells him, ‘You gotta get out of here.’ That takes about three minutes total. Before, they may have watched that person for 20 minutes until they stole something. And if they had detained that person and processed the paperwork, that’s another 45 minutes. What was going on in your store for those 45 minutes? Now, those efforts can be redeployed onto observing and detaining other individuals.”

LP organizations may even start valuing a photograph more than a prosecution. “The value of a photo is so much,” Smith says, “that I may change the approach for a detention in the store to something less aggressive. We may train agents to approach someone they just saw stealing and say ‘Look, give me back the product, let’s go back to the office, do some paperwork, I’ll take a picture of you, give you a barring notice, and then you’re out of here. I’m not going to call the police.'”

Retailers may also be able to reap benefits from photos of other retailers’ shoplifters. A national shoplifter database similar to the Stores Mutual Association model is already in the works. This would mean that each additional retailer who adopts the security camera technology and starts sharing will incrementally increase the value of the system for all members.

The Importance of Statistics

Despite how useful the system is in enforcing barring notices, the greatest LP benefit of facial recognition may be the quality of data the security camera system makes available. Having solid statistics about which individual thieves enter which stores and the distribution of peak shoplifter activity over the course of a day or a month can be extremely powerful in informing management decisions.

Rosenkrantz says, “Let’s say you have a store and an LP associate is there the entire day. What if the system tells you that 90 percent of the theft is happening during certain hours of the day, and you’re able to adjust the schedule accordingly?” Better data will enable LP departments to optimize the deployment of LPAs to work where and when they’re needed most.

And when an LPA isn’t on duty, they just hand off the smartphone to the store manager. “In the past month, about 20 percent of our approaches have been done by management,” Smith says, “and they love it. They know when a crook walks in their store, and they just walk up to them.” The system puts more power back into the hands of the store manager, giving them a greater degree of personal control over external shrink.

Could this security camera technology reduce the need for in-store LP professionals? “I think the most major impact to the industry as a whole will be in eventual reduction of man-hours necessary to operate an LP organization,” says Rosenkrantz. “It’s a combination of force multiplication effects and the incredibly valuable statistics.” Of course, the system only detects shoplifters in the database. LPAs will still need to keep a lookout for new enrollees. And some high-risk stores need as many eyes on the floor as they can get.

Rather than threaten LP jobs, the technology will likely aid in the evolving shift in LP responsibilities. “What I’m expecting,” says David Guttadauro, CEO of leading facial-recognition provider Digital Signal Corporation, “is that loss prevention people will be following a trend I’ve seen in the intelligence community, government, and law enforcement, in which the traditional role of the detective is changing into the role of the analyst. Data and technology are really going to be how the LP industry is going to be run moving forward. You look at your risks from the standpoint of data and event patterns, and then you analyze those risks to end up taking more informed, evidence-driven action.”

Limitations of Security Camera Technology

Determining whether two images of a face match is not a simple yes-or-no question. The system works based on how probable it is that the face on the store security camera matches the face in the database. The retailer must set an acceptance probability threshold, which can be a delicate balancing act.

On the other hand, if the threshold for a match is set too high, someone who’s enrolled in the system might not trigger an alert, just because the cameras weren’t able to get a perfect photo of him as he walked in the store. Enrollment photos are usually like driver’s license photos, taken straight-on with even lighting. It’s rare to capture these same conditions on in-store security cameras, and any deviation will marginally reduce the probability of a match. “The less that you see of the face, the lower the probability of a match there’ll be,” says Rosenkrantz, “so when our system sees eyeglasses on a person, it actually removes them and makes some assumptions about what’s behind them. We are able to detect people with high match rate who are wearing hoodies, parkas, or scarves, or where the person is looking at their phone or never looking quite at the camera. These things just lower the probability of a match.”

While there are limitations, the system is expected to become ever more accurate as the technology matures. And in the instances that the system does fail, what’s at stake? “The government uses a lot of facial ID that’s very sophisticated,” says Smith, “but they’re trying to find terrorists. We’re just trying to ID a shoplifter or two. People have asked me what happens if it misses one. Who cares? I’m just trying to catch shoplifters. I’m not trying to catch an international terrorist. I don’t need the most sophisticated system in the world. I just need one that pays for itself.”

Marketing and the Problem of Privacy

“The initial cost justification that drives the purchase of the system comes from loss prevention,” says Rosenkrantz, “because the numbers are a lot more tangible and you can gain empirical evidence of what your savings are. But retailers are exploring future uses for marketing purposes.”

There is widespread speculation about what will happen after LP departments have given this new security camera system a test drive and marketing departments get hold of it. Dynamic advertisements could be targeted precisely on a customer-by-customer basis. Sales associates with knowledge of customers’ brand, aesthetic, and price preferences could guide them to more personally appealing products. Stores could track not only what customers bought, but also what they looked at and didn’t buy. Biometric-linked credit cards could enable cashierless purchasing.

“I see it becoming extremely pervasive,” says Rosenkrantz. “It’s already being used for digital signage for personalized advertisements. It can identify gender and age ranges with about a 90 percent accuracy.”

Facial recognition has the potential to change the rules of retail. It could lower shrink, revolutionize in-store marketing, and, ultimately, more efficiently deliver products to consumers, thereby reducing costs for everyone involved—a win-win situation. But as usual, there’s a catch. If deployed without careful, deliberate forethought, the technology could easily be abused, either intentionally or by poor planning, with far-reaching consequences.

The way they’re presently deployed for LP purposes, facial-recognition systems are designed to be conservative. There is little privacy threat and limited potential for abuse. The system immediately discards images of anybody who isn’t a match to a known shoplifter. Compare this to ubiquitous archiving of CCTV footage of everyone who enters a store. Surely facial-recognition systems are less intrusive than standard video archiving?

“I would actually agree that, if the system is truly set up like that, it’s definitely less intrusive than holding onto security camera footage,” says Jennifer Lynch, a staff attorney with the Electronic Frontier Foundation, an international digital rights organization. “A system that is designed to look only for people who have been convicted of shoplifting in the past is not going to be a threat to privacy for the vast majority of shoppers.”

The conservative design of Smith’s system is the result of long, hard thought about the privacy and process issues he needs to address. But will every retailer be so careful? For loss prevention the only people enrolled are shoplifters. LP doesn’t need to identify and track average customers. But marketing is frothing at the mouth at the prospect. And when average customers are enrolled is when potential problems set in.

“The real privacy issue for marketing is how stores are holding on to the data,” emphasizes Lynch. “Are they using a system that just detects a person’s gender or age range, then forgets their image? Or do they collect identifying information about specifically who that person is and then track that person every time they walk in the store? In that situation it’s a huge impact on privacy. And stores may be tempted to go even further and sell the information, and that’s a huge problem as well. In the online world and the offline world, it’s very easy for data to be collected and then combined with other data so that marketers have a very distinct picture of a person that people would never know about.”

The Risks of Ignoring Privacy

Imagine a retailer that identifies and tracks every customer that enters the store. Imagine they scour Internet image databases, housing records, Facebook and LinkedIn profiles, until they know not just your name, age, address, birth date, and brand preferences, but also income bracket, credit score, social circle, work schedule, and the number and approximate age of your children. Imagine the retailer sells this information—to other retailers, lenders, government agencies, or whoever has the money. Imagine there is a database out there with an incredibly detailed profile of what you like, what you do, and who you are. And you can’t change it, delete it, dispute it, or even see it. You might not even know it’s there.

These are the sorts of possibilities worrying both privacy advocates as well as forward-thinking retail executives; the possibilities that are ripe for abuse, which would likely result in a consumer backlash. For retailers the potential cost of consumers becoming alienated and eventually rejecting the facial-recognition security camera technology is enormous. The PR nightmare and consumer pushback resulting from the wrong sort of publicity could do serious damage to a brand.

The storage and protection of biometric databases presents a further risk. Even tightly secured credit card databases have been compromised multiple times in recent years, allowing hackers access to hundreds of millions of customers’ sensitive information, and costing companies billions. For consumers, having credit card information stolen is usually more inconvenience than danger; they simply replace their cards. But it’s much more difficult to get a new face.

Who is liable if a biometric profile is stolen? What new crimes are possible if criminals have access not only to the usual information stolen during identity theft, but also to information about a person’s physical features and a complex profile of preferences and behavior patterns?

Even if the majority of retailers use the security camera system conscientiously, all it would take is one example of major abuse to jeopardize the use of the technology by all. The legal space surrounding the technology is blurry. If major abuse came to light or a PR incident was handled poorly, there is a risk that legislation would be crafted hastily and thoughtlessly, which could end up crippling the technology.

Leading the Charge

Loss prevention professionals are the first adopters, leading the adaptation of this disruptive technology to the retail world. This leaves the LP industry with the opportunity to spearhead the adoption of privacy standards, process standards, and consumer protections, setting the tone for the impending adoption of the technology by other segments of the retail industry. By careful, deliberate self-regulation, retailers may be able to avoid consumer pushback and knee-jerk over-regulation that could cripple the technology and deny the industry an incredibly powerful, potentially game-changing tool.

Guttadauro believes his company’s technology is so powerful, he won’t even sell it to retailers until the privacy and process goals have been adequately addressed. “I don’t believe they’ve done enough work to protect the people on the other side of the security camera,” he says. “I wouldn’t want to risk the market. We need to build a consortium between vendors, retailers, and consumer advocates to really build a foundation of standards.”

To what degree consumers ultimately accept or reject the security camera technology will be in large part dependent on the PR response to the first widespread public acknowledgement of the system and its capabilities. Having standards and customer protections already in place will be invaluable in convincing an already-skeptical public that the technology will help them more than threaten them.

Standards will need to address issues like enrollment and unenrollment procedures, data storage and protection, data sharing, transparency, and data ownership, among other things. Different standards may need to be developed for different purposes. For example, Smith says, “We let shoplifters know that we intend on approaching them and that we reserve the right to use biometric ID to identify them for the purposes of enforcing a barring notice.” But when it comes to the general public, “We need to let customers know that they own their image and they’re in control of their image,” says Guttadauro. “If they want to be detected, they should be able to opt in for detection. And since it’s your right to opt in, we should also guarantee that you can opt out.”

A standards consortium could protect the industry moving forward, but only if it succeeds in protecting the consumer as well.

Future Directions

As the facial-recognition security camera technology evolves and becomes more widely adopted, there will be many challenges and many benefits to be gained if challenges are properly addressed. What else is on the horizon?

Industry experts are already predicting an organized retail crime response. There may soon be blogs sharing tips about how to confront facial-recognition systems and listing which brands and which stores within each brand are known to use them. “When most retailers in a certain geographic area adopt the technology,” says Smith, “those who haven’t could end up taking a disproportionate amount of ORC theft until they’re on a level playing field. It’s a mousetrap game. I think it puts us one mousetrap ahead of the people who are really burning us in ORC activity. I do think they’ll catch up, figure out how to beat it, or go where it’s not. But I think it eliminates, or close to eliminates, personal use theft in a store. And that’s huge. Because all that’s left is the new batch that comes in, and they don’t show up at the same rate.”

Meanwhile, the technology itself is only going to become more accurate and comprehensive. Current retail solutions leverage existing IP cameras, which generate a normal two-dimensional image. The most sophisticated facial-recognition solutions, used by governments and intelligence agencies and already nearing perfect accuracy, use special security cameras to generate a three-dimensional model of the face. There is also research toward a mixed biometric approach, using gait recognition, earlobe recognition, skin-texture recognition, and other biometrics that could make it possible to identify a person without even needing to see the face.

The technology could also have positive effects that spread from the industry into greater society. “Take juvenile delinquency,” says Guttadauro. “For a 15-year-old shoplifter, a conviction scars them. They get no financial aid, fewer job prospects. Retailers are literally creating a downward cycle of shoplifting by the way that we approach it as a whole. Using facial recognition security cameras, if we catch a 15-year-old shoplifting, we’re not going to prosecute him, we’re going to register him into the database, we’re going to have his parents come down and sign a form saying ‘Johnny will never shoplift again and I agree to let you use his image.’ The next time he comes back into the store you say ‘Welcome back to Store-Mart, Johnny. Please don’t shoplift, or we’re going to call your parents.’ It’ll have the same effect on shoplifting, but the kid doesn’t end up with a criminal record, and the court costs are significantly less both for the retailer and the municipality.”

Facial-recognition security camera technologies, and the torrent of data they bring, are poised to dramatically alter the LP landscape, changing the day-to-day life of LP professionals, informing top-level decision making, and shifting the way the industry as a whole operates. Soon after, the technology will set the stage for a radical paradigm shift in retail marketing and the retail customer experience. Like most disruptive technologies, facial recognition has the potential to bring considerable benefits as well as considerable abuse. It’s in the hands of loss prevention leaders today to choose the course for the future and to blaze the path that takes us there.

This article was originally published in 2013 and was updated September 27, 2016.

The post Security Cameras with Facial Recognition: A Game-Changing Technology for Retailers appeared first on LPM.

Following is an example of a successful partnership between retail loss prevention and local law enforcement that resulted in the dismantling of an organized retail crime (ORC) operation in one Florida county. While the details are specific to this particular 2011 investigation, what is important to the LP industry is that ORC is not just a discussion inside retail. Law enforcement is, in fact, interested in working with loss prevention organizations to proactively prevent crime in our stores and the communities we both serve.

Preparing for an Organized Retail Crime Blitz

As 2010 progressed, organized retail crime activity in Florida was high, resulting in significant losses for Luxottica Retail. Therefore, we decided to do a blitz in Florida to try to halt the losses. As usual, we sent invitations to other retailers to join us on this quest to identify and address ORC-related incidents. Macy’s then-ORC manager, John Morris, accepted the invitation to work with us.

Our second step was to solicit help from law enforcement. Our initial calls seemed to generate interest, but no commitments were reached. Time was passing quickly, and we couldn’t get the commitments we needed to secure a safe event. With only four days before the scheduled blitz, a call was made to a neighboring county to ask for suggestions on how to move forward with the blitz if we were not able to gain the necessary law enforcement assistance. That call was specifically made to Sergeant James Ostojic of the Polk County Sheriff’s Office.

Loss prevention professionals may remember Sergeant Ostojic and the Polk County Sheriff’s Office from 2008, when their investigation of a shoplifting incident led to the identification of a multimillion-dollar retail theft ring and fencing operation. At the conclusion of that investigation, 18 people were arrested and charged with felonies. Later that year, the Florida Retail Federation honored Sergeant Ostojic as the Retail Officer of the Year.

The 2008 investigation gave the Polk County Sheriff’s Office much notoriety in the ORC arena and paved the way for how retailers and law enforcement can work together to make great things happen. In recent years, Polk County has consistently helped retailers fight the battle against property crimes and ORC. Therefore, it was no surprise that Sergeant Ostojic  extended his hand to help with our pending blitz.

The first request Sergeant Ostojic asked was to move some or the entire blitz into Polk County, which would give Polk County jurisdiction should any criminal situation be encountered. We met this request and began discussing the specifics of how to coordinate the efforts of both the retailers and law enforcement.

Sergeant Ostojic took the plan up the chain of command starting with his immediate supervisor, Captain Andy Ray. Captain Ray in turn received the approval from Sheriff Grady Judd, who gave the go-ahead to gather however many officers would be necessary to carry out the blitz.

Sergeant Ostojic hand-selected each officer who would be involved by what they had to offer. In addition to the Polk County Sheriff’s Office, officers were recruited from the Winter Haven Police Department, Lake Wales Police Department, and Lakeland Police Department. In total, eight officers would participate in the blitz, with Sergeant Ostojic supervising the law enforcement contingent.

All the planning and organizing occurred rapidly over a two-day period. A formal operating plan was generated and delivered to both retailers and law enforcement personnel. Sergeant Ostojic conducted an ORC training session for all participants and assigned each officer to specific duties.

The day before the blitz was scheduled, Captain Ray asked to have dinner with the retailers in order to meet and talk with them. It was an enlightening conversation. Captain Ray was clearly excited about the blitz and that the Sheriff’s County Office was playing a pivotal role.

The following day, a meeting was held to review the plan one last time with everyone involved. At this meeting, participants were partnered to include at least one officer for every retailer, locations were assigned, and everyone went their separate ways.

Launching the Blitz

The first day, one arrest was made, retail property was recovered, and an individual was charged with possession of marijuana and narcotic paraphernalia. While this may have seemed like a disappointing start, it turned out to be just a warm-up session for day two.

Day two began with two arrests at a higher-end department store. A third arrest at another department store nabbed a female suspect who provided critical information for an ongoing police investigation in Polk County. That suspect decided to cooperate and provided information into other crimes that were occurring in surrounding areas. This is an example of how dealing with organized retail crime can lead to information regarding other crimes. The grand finale came near the end of day two when the blitz activities concluded by gathering the evidence that led to the destruction of a large fencing operation located in Winter Haven, Florida.

Participants in the 2011ORC blitz included (from left) Millie Kresevich, Matt Michel, and Mark Flores of Luxottica; Det. Stephanie Burcham of the Lakeland Police Department; and Sgt. Jim Ostojic, Dep. Eliss Mitchell, Dep. Andres Marin, and Det. Joseph Makal of the Polk County Sheriff’s Office. Not shown is John Morris of Macy’s.

It was about 4:30 p.m. on Thursday. The loss prevention manager from Macy’s mentioned that he had video of a suspect who came into their store routinely and shoplifted high-dollar gift sets of men’s and women’s cologne. The suspect had not been apprehended thus far because he was in and out of the store quickly.

A second piece of intelligence provided was that the suspect often comes in with another male. Almost on cue, not 20 minutes after revealing this information, the suspected cologne thief was seen standing outside the doors of Macy’s. While he wasn’t entering the store, he clearly is interested in something going on inside. Sergeant Ostojic was watching him closely, and I was in the interior of the store. The cologne thief began to head toward his vehicle when his partner, who was already in the store, exits with a stolen pair of sunglasses in hand from Sunglass Hut. The product was not concealed, just carried out by the accomplice. Once the accomplice reached the vehicle, both men were approached by officers and asked to step out of the vehicle. The sunglasses were recovered with the tag still affixed.

Each suspect was placed into a separate room to be interviewed. The accomplice was completely uncooperative and would not provide any information. The cologne thief, however, decided to cooperate. He told Sergeant Ostojic and me that the merchandise he steals is sold at a beverage store in Winter Haven. The suspect alleged a female drug dealer who makes a living from selling drugs as well as stealing and selling retail property introduced him to this store. According to the suspect’s information, once employees of the beverage store purchased the product, it was then sent overseas.

The cologne thief, now turned informant, was asked if he would be willing to go to the beverage store with an officer, represent product as stolen, and sell it to the individuals he has been dealing with. With his willing participation, the wheels of motion were put in place. Within a matter of two hours, the entire sting was orchestrated.

Macy’s provided two gift boxes of cologne for the sting. Additional police officers from Winter Haven were brought aboard. An officer and the informant were dropped off in front of the beverage store. The pair walked into the beverage store, asked the person on the other side of the counter if they want to buy the merchandise they just stole, and the transaction took place. The individual purchasing the stolen goods gave the officer and informant $20 for items worth almost $200.

While the transaction took place inside, a car pulled up in front of the beverage store with what appeared to be rectangular boxes. As the individuals exited the car with the boxes, they noticed the police cars surrounding the store. They immediately jumped back into the car and sped away…in reverse.

The person who purchased the stolen goods was arrested and taken into custody. Drugs, stolen property, and pornography were found in the store.

The Law Enforcement Perspective

This blitz represents a great example of fantastic police work in partnership with retail loss prevention. Every step was handled meticulously, efficiently, and achieved a final result that was “one-up” on the bad guys.

Taking down the fence in these sorts of operations is key. If we can’t stop who is buying the product, there will always be the desire to continue stealing it. It becomes much more difficult to unload retail property once the main fencing operation is eliminated in a certain area.

Speaking from the loss prevention perspective, we can’t thank Polk County enough for their efforts and diligence in helping retailers in their jurisdiction remove a significant piece of the ORC puzzle. While ORC is often discussed among loss prevention professionals, it is important to hear the following perspectives on ORC from key members of the Polk County Sheriff’s Office.

Sergeant James Ostojic

Sergeant James Ostojic

When you received the call about retailers needing help with the blitz in Florida, what made you extend your hand so quickly?

The Polk County Sheriff’s Office has a proactive approach on crime and assisting in the blitz reinforces this philosophy. Over the years, I have been involved in several major organized retail crime cases. Similar cases usually begin with something like a shoplifting case then expand to a larger investigation.

Teamwork and coordination are essential as well as timeliness and accuracy for law enforcement and loss prevention personnel during an operation of this magnitude.

Why is the retail partnership important to you and your job?

My job is to proactively prevent crime. Shoplifters educate themselves on new and innovative ways to commit criminal acts. Many times, the items they steal are used in other crimes. As these types of crimes escalate, they often lead to more violent crimes. Our partnership is beneficial to get information that may help lead to solving these types of crimes. It is important from a consumer perspective to remember the loss of profit for the companies and loss of tax revenues. Our job requires us to educate consumers, employees, and the community at large to be on the lookout for unusual activity. Every aspect of the retail partnership is beneficial to me, my job, the businesses, and the community.

What can retailers do better to assist law enforcement in combating ORC?

Retailers should be consistent in holding shoplifters accountable for their actions. For example, a trespass warning may not stop criminal activity. Incarceration will immediately stop the individual from continuing the crime spree. Incarceration often deters future criminal acts.

Retailers can also assist by providing accurate video surveillance to produce the best identification of the offenders. You should continue to monitor the activities of ORC groups and keep the information flowing to law enforcement. Keep in mind, the information must be timely and accurate with detailed accounts of each incident involving the same groups to help with prosecution.

How can law enforcement gain better understanding of the intricate workings of the criminal enterprise through the interview process?

The interview process often leads to information to solve other crimes. It is imperative that a solid interview be conducted with each victim, witness, and suspect in every case. This will ensure we are able to evaluate trends and determine if a larger group is involved. This is important for law enforcement when trying to infiltrate an organized retail crime group. Many criminal activities have widespread criminal operations and are multi-jurisdictional.

Often, the interview process will lead to a better understanding of the depth of the operation and give us information that is critical to solving the crime as well as identifying leaders in the organization. The better the interview, the easier it is to confirm the information to lead to the arrest of criminal enterprise.

Captain Andy Ray

Captain Andy Ray

You gave the go ahead for law enforcement participation in the blitz very quickly. Why is that?

Because we have been successful in preventing and controlling crime through our proactive efforts, usually based on our data-driven policing model we refer to as PROCAP, which stands for Proactive Community Attack on Problems. We find that those criminals who commit crimes like burglaries and grand thefts in the community are just as likely to commit other criminal acts, including retail theft, whether as an individual or as a participant in a larger organized group. Basically, people who aren’t afraid to commit a felony are just as unafraid to commit a misdemeanor.

By arresting individuals involved in organized retail crime, we are making it clear that we’re serious about crime control in our county, we’re reinforcing that we are paying attention, and we may likely arrest a criminal before he has the opportunity to commit another crime. Basically, it’s what we do every day, and this is just another opportunity for us to interrupt criminal activity.

You took the time to meet the retailers who were involved in the blitz. You also showed up to the blitz to see how things were going and have conversations with those who were apprehended. Why was this important to you?

I see this as an opportunity to meet stakeholders in our community—the store managers and loss prevention specialists—and to demonstrate our interest in what’s taking place in local retail stores. It is also an opportunity to relay to those involved in criminal activity that we take the problem seriously and that their criminality will earn them a ride to jail, rather than just a notice to appear in court. We feel like in order for there to be a deterrent to retail crime, there has to be an immediate consequence that’s not appealing to them.

Polk County, along with several other surrounding police departments, provided many officers to work as undercovers during the blitz.

How would you encourage other police departments to participate in a blitz and provide resources to retailers?

First, I have to mention that the municipal police agencies and the sheriff’s office work well together in Polk County. We don’t have turf issues, and we help each other out. It is very much a team approach. I would offer that the people who are stealing items from retailers are, in many cases, the same people that are breaking into cars or homes and committing other crimes. By focusing on the retail crimes and arresting those offenders, there is a good chance that other crimes in the community will be prevented.

Additionally, by working with the organized retail crime task force, we are trying to interrupt the groups of criminals who profit by stealing large quantities of retail goods. Those thefts create monetary losses for retailers and generally increase the costs for law-abiding consumers in the marketplace. Their criminal activity affects everyone.

From a big-picture perspective, how does dealing with ORC-related issues open the door to gain information regarding other crimes?

Arrestees who all of a sudden find themselves in a pinch are more likely to want to work themselves out of it. If they’re involved in organized retail theft and want to provide information in order to help themselves out, we will listen to them. Now, we won’t offer to let them go on the charge they were just arrested for; they will still have to face the consequences for their actions. On occasion, however, if the information they provide is helpful in solving other crimes, we will share with the prosecutor’s office that the individual provided assistance to us on another case.

This may or may not result in less severe sanctions in court. This blitz was a perfect example. The efforts of the ORC task force and local law enforcement resulted in the identification of a local fence for stolen merchandise.

That led to an undercover operation led by the Winter Haven Police Department that resulted in the arrest of a person operating a local convenience store for dealing in stolen property, as well as other charges, including illicit drug charges.

Sheriff Grady Judd

Sheriff Grady Judd

The Polk County Sheriff’s Office is looked at as a leader in combating ORC. Can you share a brief synopsis of the county’s voyage on becoming a recognizable advocate for combating ORC?

The Polk County Sheriff’s Office’s experience with ORC began a few years ago with what initially appeared to be a single individual stealing merchandise from a retail store. However, as the investigation continued, the detective was able to learn that the suspect was part of a larger organized retail crime ring that was mostly involved in the theft of health and beauty products.

As more details were uncovered, the scope of the organized theft ring was revealed. Detectives were assigned full-time to investigate this band of thieves in order to gather enough information on their illegal activities and the identities of the suspects to bring about a successful prosecution.

After months of investigation and consultations with our local state attorney and the assistant statewide prosecutor from the Florida Attorney General’s Office, we were able to secure arrest warrants for the members of this group, charging them under the state’s Racketeer Influenced and Corrupt Organization Act (RICO) laws. These statutes are designed for just such an operation and are designed to enhance penalties for the violation of statutes by an organized group of criminals.

Within months of closing that investigation, deputies discovered another organized group of thieves who were stealing baby formula from retailers. Again, detectives were assigned to this case on a full-time basis in order to connect the dots between the bosses and the thieves in this organization.

After a couple of months of gathering important intelligence and evidence, multiple arrest warrants were secured and the suspects involved in that organized retail theft ring were arrested. Because we know there is a continuing problem with simple retail theft and a significant problem with organized retail theft, we are committed to doing what it takes, locally, to provide a deterrent.

How much time is devoted to property and retail crimes in your county?

A significant amount of time and effort is devoted to the prevention and investigation of property and retail crimes in Polk County. We have 36 detectives who are assigned to the General Crimes Units in our patrol districts. Those full-time detectives are responsible for the investigation of property crimes, including organized retail crimes, and felony person’s crimes.

However, about 85 percent of their time is dedicated to property crimes. If you break that down, that means that we commit some 60,000 hours per year to the prevention and investigation of property crimes.

Many of your deputies are well versed on ORC-related crimes. Can you explain the training or education process that takes place?

Our detectives are chosen from experienced patrol personnel and receive four weeks of additional training specific to property crimes. They are instructed and trained by experienced property crimes detectives.

Our deputies and detectives who are most knowledgeable in ORC issues because they have been assigned to investigate the cases as previously mentioned. They have real-world experience and on-the-job training, initially. I am blessed because I have tremendous talent here at the Polk County Sheriff’s Office, and the members of this agency learn quickly. Additionally, those detectives with experience investigating these crimes share their knowledge with other deputies and detectives to increase their understanding of the breadth of the ORC problem.

What do you envision as movement in the right direction for law enforcement and retailer partnerships in the future?

The people on the front lines of the retail theft and organized retail crime problem are the men and women working directly for retailers in loss prevention positions. The retailers follow their profit-and- loss margins closely, and they know the trends that are occurring in their individual stores and in their markets.

Formulation of strong partnerships between the retailers and local law enforcement is essential so that when trends are identifiable, that information can be shared in a timely manner so that the two can work together to address those trends in a proactive fashion.

Again, this blitz is a great example. Trends were identified locally by retail LP and brought to our attention. Deputies and officers in plainclothes worked with members of the ORC task force inside local stores over a two-day period. Those efforts resulted in multiple arrests and the identification and arrest of a local business operator who was buying stolen merchandise and then reselling it for his own profit. This success story underscores the importance of a strong partnership.

This article was originally published in 2011 and was updated October 3, 2016.

The post Addressing Organized Retail Crime: Law Enforcement and Retail Partnerships appeared first on LPM.

What started out a few years ago as a phenomenon that used social networking sites to gather a group of people in a public place to dance or perform another innocent form of entertainment has since evolved into a method of gathering together violent protesters—or thieves in pursuit of your merchandise.

Retailers need to recognize the existence of the flash mob robbery phenomenon and form alliances and strategies to deal with these episodes. There needs to be a “solution reaction” developed and shared among retailers. With groups of 30 to 60 people, ranging in ages, entering stores with the intent to steal large amounts of retail property, the solution has to be quick, formidable, and absolute. Solutions may entail identifying a group leader or methods of actually detaining one or more of the mob participants. Without a collective strategy, these flash mobs are going to overrun our stores.

Safety in Numbers

First, we need to understand the reason the flash mob is entering the retail store. Regardless of the sociology of these groups, be they thrill-seeking teenagers or violence-prone gangbangers, the fact is they are entering your store to steal merchandise. The merchandise is being taken for personal use or sold to make money. The bottom line for retailers is lost merchandise and possible threat of injury to customers and associates.

The fear ratio among the flash mob is little to zero because they understand there is power in numbers. That will win over fear of reprisal or punishment every time. These groups understand that the retailer will likely do little to stop these crimes. After all, retailers have limited responses. They may call the police, who will likely arrive long after the episode is over. Or they may try to take some of the stolen property from mob members while they are on the way out of the store. The latter is less likely, as most retailers forbid their staff, for good cause, from any type of confrontation with thieves.

The flash mob has the advantage in these thefts because there are few things that can be done to stop them. Theft and larceny state laws are weak and often ineffective unless pressure is put on those who enforce these laws, and that rarely happens. The mob knows that if they take the merchandise and run away, there will be little that can be done because of the size of the group.

Consider this example: A 30-person flash mob enters a store, takes the desired merchandise, and begins to leave the store. In a best-case scenario, a police officer is nearby or actually working in the store. He gives orders to “FREEZE!” Yet all the mob members continue to exit the store with the stolen property. That officer may be able to physically stop one or two of these thieves. That means that the other 28 thieves leave the store with hundreds or thousands of dollars in stolen property. They still have not committed any crime other than theft (in most states). There would not be any further charges, such as escape, resisting arrest, or evading arrest, because it would be the state’s responsibility to prove that the person heard the officer or knew that the officer was talking directly to them. All that law enforcement has is a theft, and it is most probably a minor or misdemeanor theft, because the felony levels throughout the county have risen over the past few years.

Possible Solutions

Retailers have to be proactive and create a deterrence to these flash mob robberies. If these mobs can figure out ways to steal property from us, retailers can certainly figure out ways to stop these flash mobs. Enacting legislation aimed at organized retail crime is a long and difficult road. Even if legislation were on the books today, you would still have to find someone to enforce that legislation.

Retailers’ best bet is to develop a series of solution reactions. Unless these mobs have fear of reprisal, they will continue to hit retailers. Following are some suggestions to consider.

• Create retail and law enforcement flash mob robbery prevention coalitions to brainstorm and develop prevention and reaction strategies.
• Develop training for both retailers and law enforcement on how to deal with these episodes.
• Consider ways for store personnel to intervene at the beginning of the episode–not physically, but verbally, vocally, and visually.
• Develop ways for remote monitoring facilities to alert law enforcement dispatch facilities or mall security.
• Create an alarm or alert system to identify potential flash mobs in certain areas, such as malls.
• Create a system identifying these groups with the information shared among retailers.
• Research present laws that can be enforced when these episodes occur.
• Lobby for new legislation that brings serious penalties to those involved in flash mob robberies.
• Get federal, state, and local involvement to monitor the sites where flash-mob information is shared.
• Through interviews of those arrested, identify the leaders and their methods of operating.

Organized Retail Crime

There is a good possibility that those who are already fencing stolen goods are going to participate in these crimes, if they are not already. It is also obvious that criminal street gangs will likely use these same tactics as a cover to acquire large amounts of expensive retail property. That means that flash mobs may become another tactic for organized retail crime.

Violence is always a potential issue when criminal and neighborhood gangs are involved. For the most part, retailers will not be able to recognize the difference between violence-prone gangs and misguided teenagers acting as flash mobs. Therein lies a real threat, if retailers try to stop someone involved in one of these episodes.

Fences, on the other hand, face little chance of being identified with these flash mob robberies because there is no physical participation at the scene of the theft by the fence. The fence waits until the stolen property is brought to him or her and buys it for about 25 percent of the retail value. It will be hard to prove that the fence encouraged the group to commit the crime, because a smart fence will only discuss the value of the property, not how the seller acquired it. So the established stolen property fence should have no problem building their illegal business with the rise in flash-mob thefts at retail stores.

The primary responsibility for preventing flash mobs from committing thefts in the stores lies with the retailer. How merchandise is displayed and controlled is at issue. The number of employees and their positions within the store are vital to preventing these groups from gaining control of high-end merchandise. Retailers are quick to point the finger at the thieves, but some of the blame can be traced back to the retailer. They should have good security video systems in place, experienced, trained associates on the floor, high-end merchandise secured, and loss prevention personnel trained and involved.

Retailers and Store Personnel

Retailers should establish a coalition to deal with identifying these types of organized retail crimes when they start occurring in different areas of the country. Information on incidents involving flash mobs should be discussed and training established within the retail community. Again, retailers cannot wait for law enforcement to do something about flash mobs, because it will be too late.

Following are a few suggestions for store-level personnel:

• Call the police as soon as it is recognized as a possible flash mob robbery event.
• Get descriptions of those involved.
• Secure any video of the incident.
• Identify possible leaders, including those giving orders, vocalizing on what to steal, pointing where to go, etc.
• Get any vehicle descriptions possible.
• Monitor and identify how much and what type of product is stolen.
• If appropriate, notify shopping mall security.
• Share information with other retailers.
• Protect any physical evidence left by the flash mob.

Law Enforcement

There is little law enforcement can do about flash mobs until they are involved in a crime. Simply organizing a flash mob is not against the law—yet. Once the flash mob engages in the actions to commit a crime, law enforcement can take action, but until then they are powerless. There needs to be some preventive measures and intelligence-building initiated within the law enforcement community dealing with these types of crimes. Coalitions need to be established and information shared among those responsible for preventing these thefts.

When violence is involved, of course, law enforcement takes quick action. However, crimes that don’t involve violence are usually treated as “simple theft” and put on the back burner. With our prisons full and the costs of keeping felons locked up a growing burden to the state, flash mobs can grow in frequency until someone is seriously injured. Even then, only that incident will be identified as a serious issue.

Legislation

This may be the easiest avenue in helping to prevent these types of crimes. Again, legislation is only as good as it can or will be enforced. The best way to create laws specific to flash-mob theft is to amend present statutes already on the books.

Keep in mind that “robbery” is simply “theft by force,” which is a felony in all states. By definition, “force” could be a weapon of some kind, a physical assault, or a “threat that instills an imminent fear in someone.” In essence, imminent fear is what is created when a large group of people enter a retail store and start loading up on merchandise. Individuals working in the store would certainly think that if they tried to interfere in this situation, these thieves would band together to stop that interference, therefore creating that imminent fear. Amending state robbery laws in this way would make the offense a robbery and a felony for any participant of a flash mob involved in that retail theft. Since robbery is considered a violent crime, it would also help ensure law enforcement involvement.

Things have been changing in favor of retail over the past decade or two as retail and law enforcement have banded together, creating coalitions, getting involved with state and national retail associations, enacting legislation aimed at organized retail crime, and sharing information within the private-public sectors concerning criminal acts committed against retailers.

It is time to add flash-mob theft to crimes against retailers before we find ourselves trailing these types of crimes like we did with organized crime. ORC had a healthy foot in our door before retailers recognized it as a serious threat to their businesses. It behooves us to be proactive before flash mobs get out of hand.

SIDEBAR: Flash Mob Robbery Incidents at Sears

In 2011, theft incidents involving flash mobs occurred in Sears stores in Upper Darby, Pennsylvania, and Douglasville, Georgia. The two events involved primarily teenagers who entered the stores specifically to shoplift merchandise.

In Upper Darby, 17 individuals entered the store and took watches, shoes, and clothing in approximately eight minutes. A store loss prevention associate observed the entire incident and immediately called local police, who arrived just after the group exited. The LP associate observed the group going to a nearby fast-food restaurant where police apprehended the suspects and recovered the merchandise. Sixteen juveniles and one adult were charged with retail theft. The young adult, who appeared to be leading the group, was also charged with corrupting minors.

The Douglasville incident involved eight females who entered the store and began concealing large amounts of merchandise in the women’s clothing and cosmetics departments. Upon observing the first concealment, loss prevention called police, who arrived within five minutes with the suspects still in the store. The four officers were able to apprehend all but three of the suspects. The five suspects apprehended ranged in age from 12 to 16. A 17- and 19-year-old and another minor escaped police.

“In both of these cases, the flash mobs appeared to be young people involved in personal shoplifting as opposed to organized retail crime gangs,” said Bill Titus, former vice president of loss prevention for Sears Holdings. “Fortunately, our store personnel followed their training, resulting in the police making apprehensions and recovering the stolen merchandise.”

The guidelines given to Sears store loss prevention professionals centered around three elements:

• Be Aware—Report to LP or store management whenever associates see large gatherings of juveniles inside or directly outside the store.

• Deter Theft—Attempt to discourage thefts by stationing associates near high-value merchandise and displaying good customer service to those participating in the incident.

• React—Call 911 once acts of theft are observed. Do not call police simply because a group enters the store. The LP team should continue to monitor the group and document the incident, but should never attempt to make an apprehension, as it would not be safe to do so.

This article was originally published in 2011 and was updated October 4, 2016. 

The post Flash Mob Robbery and the Retail Threat appeared first on LPM.

The loss prevention associate finally caught them red-handed. For three months he had been trying to catch these shoplifters in the act. This time he saw it happen. The male removed the frying pan from the box. He filled the box with Blu-ray discs and resealed it, leaving it on a shelf. The female walked by and picked up the box on her way to the checkout counter, where she paid $9.95 for the frying pan. She was quickly apprehended and handcuffed. The male shoplifter reentered the store to find his partner and was caught as well. Inside the box were discs worth $700, and the whole thing was recorded on CCTV surveillance video.

The LP associate called 911 to get the police on their way, then called his associates at other stores to tell them the good news. The police arrived, and he scratched out a quick statement about what the shoplifters had done, handed it to the officers, and watched them leave. A feeling of satisfaction swept over him; nothing beats the feeling of success.

Two weeks later, a detective called and asked for a more detailed description of what was in the frying pan box. Another call from the detective; this time, he wanted a copy of the sales document and a written statement from the cashier. He also wanted to know who made the CD of the CCTV surveillance video and whether there was any video from previous visits by these two suspects.

The LP associate had to wait two days for the cashier to come back on shift. She didn’t remember too much about the incident, but wrote down what she did recall. He scanned old CCTV surveillance video in an attempt to locate the shoplifter suspects on earlier visits. It was in there someplace, if he could only find it. The detective stopped by and picked up what the LP associate could gather, told him the case was still under investigation, and left.

Six months went by and he forgot about the incident. Finally he received a letter from the local prosecutor. The two shoplifters had pleaded guilty to misdemeanor theft and were given credit for time served. Each was assessed a $200 fine, and had to pay some court costs. The LP associate thought to himself, “How could this be? That was a genuine felony if I ever saw one. This is an injustice!”

A Typical Walk through the Justice System

The scenario above is fictitious, but it is based upon facts from multiple retail shoplifter cases I worked during my time as a property crimes detective for the Snohomish County Sheriff’s Office in Washington State. All too often, what appears to be a great shoplifter case ends up dwindling away to nothing by the time it makes its trip through the criminal justice system. This is rarely because the necessary facts were missing; it just becomes a victim of the process. Consider the following scenario.

The case lands on a detective’s desk a week or two after the fact. The detective likely works a variety of cases, such as residential burglaries, car prowls, vehicle thefts, robberies, possibly ID theft, in addition to shoplifters and other retail crimes. It would join the 20–30 other cases already on the desk, and would be joined by several more each day as time went on.

The detective will eventually read the case and decide whether to work it or close it out. Since the Blu-ray external theft case involved a shoplifter arrest, and it appeared the probable cause was good, he would prepare a list of items needed before it could be sent to the prosecutor. He knows what the prosecutor requires and that the prosecutor will decline to charge the case if anything is missing. He also knows that he has a limited time to work this case since others are in process at the same time. Overtime is not allowed, and the extra detective that was to be assigned has been put on hold because of the financial conditions in the county.

The detective needs a detailed list of recovered stolen property as well as a statement from the cashier. The CCTV surveillance video is pretty long and he has to watch the whole thing to make sure he finds the important segments. Still photos of key events have to be printed and captioned. He will also need a second copy of the CD for the prosecutor. The LP associate’s statement regarding the shoplifter incident is incomplete, but maybe he can get by with it.

Somewhere during the process, another priority case comes along, and the detective has to send this one up the way it is at that point. It isn’t great, but it will have to do. He would have liked to put a better case together, but time ran out before he could do that.

The prosecutor gets the case. Of course, it lands on a big stack of others that he is already reviewing. He looks at it and sees that it’s a little confusing, but the potential for a good felony conviction is there. A few pieces that he would really like to have are missing. He knows that he could send a follow-up request to the detective and may get the information. He also knows the suspects have been released from jail and have another hearing scheduled soon. He decides to offer them a sweet deal in the hope that they will take it, and he can close the case and get on to the next. He would prefer to take the time to put a great felony case together, but it isn’t a priority in his mind, so he’ll take what he can get. A month or two goes by before the case disposition notice is sent to the retailer. Hopefully, they will be satisfied with the outcome.

Good Communication Is Key

This scenario makes it sound like there is no hope for justice, crime really does pay, and there is no consequence for criminal actions. In fact, there is a solution, and it is quite simple to put in place. The critical ingredient is good communication and planning before the fact.

Loss prevention associates and law enforcement need to be working together on their cases. If the store knows what detectives need and prepares their shoplifter cases in such a way that all the necessary details are covered in the beginning, the detective will only have to add a few items, prepare a narrative statement, and send it to the prosecutor. Little time will be required on his part, and a quality product will be sent up.

If the prosecutor receives a case that is complete, easy to read, and easy to understand, he will be able to charge it immediately, instead of having to send requests for additional investigation and running into the associated deadlines and time crunch. This increases the likelihood that the suspect will be charged appropriately

Too often, the loss prevention associate doesn’t know exactly what the detective needs, so they either send too little information or they use the “shotgun approach” and send everything they have along with their shoplifter case. This results in hours of sorting through paperwork at the detective office with additional items still needed in the end.

From my experience, the best way to accomplish this is for the detective and loss prevention manager to sit down with a case and critique it. As an example, I worked with the Lynnwood, Washington, Walmart asset protection manager on an organized retail crime (ORC) case. We spent about an hour going over the details. Then he took it back to the store and rewrote the report. When I received the final product, it was complete and virtually ready to be sent up. The prosecutor charged the case, as written. Walmart then conducted area-wide training of its AP associates with excellent success. We have since gone through this process with other retailers with similar results.

Recently the local prosecutors in several counties have announced that they will be arbitrarily raising the prosecution limits for felony crimes. These limits are usually negotiable. If the prosecutor is presented with information that the suspect or crime involved in a particular case, such as ongoing organized retail crime, is a serious or exceptional threat to the community, they are usually willing to make an exception and charge the case at full value. This has worked for me on several ORC cases.

Law enforcement relies on input from LP associates for this type of information. If the same shoplifter suspect has been involved in multiple thefts over a period of time, the values can often be aggregated and the case charged based upon the overall total value of losses. However, everything must be accurately documented to use this approach.

Following are basic requirements for compiling a good case file for prosecution.

Determine the Proper Charge

The appropriate criminal charge must be identified, and the elements of that crime must be met.

In addition to those elements in state law, the prosecutor has a charging standard for each crime that may consist of additional requirements specific to that jurisdiction. For example, Washington law says that in order to make an ORC charge, more than one suspect must work together to steal from a retail establishment. The Snohomish County Prosecutor charging standard adds the requirement that they must steal from multiple establishments. In my experience, they would like to have three related incidents involving the same suspects.

The loss prevention associate must be well versed in the elements of each of these crimes. This knowledge will allow you to recognize what crime has been committed and will tell you what to include in your report. Often the police officer who responds to the store for a shoplifter arrest is not intimately familiar with all the retail theft laws, so a quick briefing from the LP person is necessary to get the right charge on the jail booking sheet.

LP Associate’s Statement

This is the key to the entire case. This document defines what happened, how you know it happened, how you know the identity of the person in custody, what was stolen and its value, and what crime was committed. Each of the elements of the crime must be included and addressed in the statement.

It is critical to write the statement in a manner that is easy to understand. Remember the reader probably has no retail experience and wasn’t there when it happened.

Use plain language and avoid words like “proceeded to,” “perpetrator,” and “S1, S2.” Explain the shoplifter’s actions in detail and avoid terms that are not generally understood. It is better to say, “I saw the shoplifter remove the contents of a box and place CDs inside of it in an effort to conceal them” than to say “I saw the shoplifter box-stuffing on the CD aisle.”

Identify the people involved by title and name and how you identified them. An example would be: “I saw a male, later identified as shoplifter suspect #1, John Smith, enter the north door. Smith was wearing a yellow shirt and gray pants. Smith stopped briefly and spoke to a female, later identified as shoplifter suspect #2, Suzy Jones. Smith and Jones then….” As the statement goes on, use their names. Too often statements refer to S1 and S2 throughout, and the reader has to look back in the statement multiple times to figure out who these people are.

If another store employee is involved or speaks to the suspect, you must include a written statement from that employee with your report. Identify them as, for example, “store cashier, witness #1, Jenny Wilson.” The employee should document their interaction with the shoplifter suspect, including details of any statements or comments made by the suspect. This could be critical to the overall case; more about this later.

Clearly identify who prepared the CCTV surveillance video, who calculated the value of stolen property, and who completed each of the other tasks. Include a brief statement that this person has been trained and is authorized to perform this function.

The prosecutor will require an accurate fair market value of the stolen property. In the case of a retail store, the marked price is the value. You must describe how you calculated the value. In the case of recovered property, it’s simple; just add up the prices.

I have had cases where items were stolen, but not recovered. It was still possible to define a value because the store had an accurate inventory system, and the employees were able to determine what was taken based upon inventory records. The shoplifter suspect was recorded on video taking items from the shelf. Then the stock was counted and compared to the on-hand totals on the books. This process must be explained in the statement in a manner that convinces the prosecutor that the number is reasonably accurate.

Obtain copies of sales documents or any other document associated with the incident. Digital photos of recovered property are also a bonus.

CCTV Surveillance Video

CCTV surveillance video and photos are a valuable piece of evidence. “A picture speaks a thousand words” is true here. However, there are several pitfalls associated with this process that must be overcome.

In my experience, it is all too common for a store to have a state-of-the-art digital CCTV surveillance system that records wonderful, clear information. But when the detective asks for a copy of the video footage, the store employee has no idea how to share it. They usually say something like “I’ll have to get in touch with my boss [or the installer or some other person]. I’ll let you know when the file is ready.” Make sure the users of the CCTV surveillance system know how to operate it.

CCTV camera placement is another problem. We receive many great photos of the top of the suspect’s baseball cap. I’ve never been able to positively identify a baseball cap. Some retailers have a camera in the doorpost at the entrance to the store in order to capture a full-face shot of the suspect at eye level when they enter or exit the building. This allows a positive ID and a clear view of the clothing worn by the suspect at the time of the incident. The rest of the cameras may be at ceiling level, but it’s easy to track the shoplifter suspect’s actions based upon the clothing that was identified at the entrance. If the loss prevention associate sees a crime being committed on CCTV, they have the ability to go back and review the video from the entrance until they find the right person.

When preparing the video for law enforcement, include only those segments that show the shoplifter’s face and clothing, and show the shoplifter involved in the commission of the crime. Include all pertinent information, but keep it short. The longer the video, the less likely it will be reviewed by those who follow you in this process.

To supplement the video, make still prints of the face shots and the critical moments when the shoplifter was involved in the criminal act. Each photo should have a caption on it that describes what is going on. Don’t expect the detective or prosecutor to be able to figure it out without your help. Include who it is and what they are doing. The detective will compare these photos with a copy of the suspect’s state drivers’ license photo or a previous booking photo to confirm his identity.

Statements from Shoplifters

Shoplifters often hand you valuable evidence in the statements or comments they make. Listen carefully to what they say and write it down.

I once worked a case where the shoplifter suspect entered a store empty handed, as recorded on the entry video, went to the linens department and took a sheet set off the shelf, also recorded on video, then took it to the door security to get an authorization for a refund. He said he got it for a gift, but it didn’t fit his bed. After receiving the authorization he took it to the refund desk and got a gift card for his no-receipt refund. He told the customer service employee his wife didn’t like the color.

The alerted loss prevention associate took a statement from the door security person and customer service person, in which they included the shoplifter suspect’s conflicting statements. Fortunately, the LP associate got the statements immediately, before they forgot the conversation. These statements, along with the video and still photos, clearly showed what happened and proved the shoplifter was lying to get the refund. There’s an old saying—“A provable lie is as good as a confession.” That was the case here; it proved his intent beyond a reasonable doubt.

During the initial contact, the shoplifter suspect often has some excuse or explanation. Write these things down. After the shoplifter is apprehended, be sure to conduct an interview. You will often obtain additional statements or confessions that will make your case.

In my experience, it seems that loss prevention associates are hesitant to interview shoplifters for some reason. It is important. Don’t pass up this opportunity.

Snohomish County prosecutors have taken the position that it is not necessary for a store LP associate to Mirandize a shoplifter suspect who is in custody, unlike law enforcement who must advise suspects of their rights prior to any custodial interrogation. As long as the store employee is not acting as an agent for law enforcement or under direction of a police officer, Miranda is not necessary. However, you should clarify this in your jurisdiction to avoid having statements suppressed later in a court motion.

The Benefits of a Well-Documented Case

The importance of understanding each step in putting together a good case file cannot be overstated.

Remember these five basic steps:

1. Know the laws and elements of each crime.
2. Identify, collect, document, and prepare all evidence. This includes CCTV surveillance video, stolen/recovered property, and sales documents.
3. Collect written statements from all persons involved.
4. Conduct an interview. Listen carefully and document all statements made by the suspects.
5. After the above steps are completed, prepare your own written statement. Write it in plain language.

Describe what happened and how you know it happened. If you saw it happen, say so. Describe the above four steps in your statement as well.

If possible, the above should be completed prior to the arrival of law enforcement. It is usually okay to delay calling them for a while so you can get your case together. This allows you to hand them a complete case package on the spot.

Timing is critical. If a shoplifter suspect is arrested in our county, there will be an arraignment hearing in court the following business day. The prosecutor must have the initial case report prior to this hearing.

The purpose of the arraignment is to determine if there is probable cause to charge the shoplifter and whether he will be held or released. The information you provide is critical to this process. The more time that elapses between the actual incident and the documentation of it, the more that will be forgotten or lost. If necessary, additional details can be added later in the form of a follow-up, but the majority of the information should be documented immediately.

From my experience, the process described above does not require much additional time for the store employee. All the needed information is there when the shoplifter is caught or leaves the store. With a focused effort, the right information can be collected and organized in the right format to expedite the whole process.

The benefits are clear. If law enforcement receives a complete, easy-to-follow case from the store, they will be happy to send it through to the prosecutor. The case will be complete, requiring little or no follow-up.

The prosecutor will receive a package with all the information they need to do their job and will be confident that it will result in a successful prosecution. As a result, they will be willing to charge it at full value.

Thieves will soon learn that stealing from your company results in their being charged with serious crimes. Word will get around, and they will be more likely to avoid coming back to your store to ply their trade–when they get out of jail, that is.

All of this, of course, ultimately will help contribute to the bottom-line profit margin for your store.

This article was originally published in 2009 and was updated October 6, 2016.

The post Case Preparation: The Key To Successful Shoplifter Prosecutions appeared first on LPM.

Over 260 loss prevention professionals, solution providers, and retail manufacturers gathered at the University of Florida (UF) in Gainesville October 3 – 5 for the annual Loss Prevention Research Council (LPRC) IMPACT conference—the largest event in the organization’s sixteen years.

This year’s conference featured presentations on current research results, retail-law enforcement joint ORC investigations, cyber crime, working group discussions, and multiple networking events.

A Monday evening reception was held at the LPRC’s innovation lab just off campus where over thirty technologies are installed in a simulated retail environment. Funded by Tyco Retail Solutions, the innovation lab functions as a demonstration facility where retail teams can see various asset protection technologies in action. The lab is open to LP organizations year around to hold team meetings and work with LPRC scientists on issues related to their specific company.

The full day of presentations began Tuesday morning with a welcome from David Richardson, dean of the College of Liberal Arts & Sciences, who told attendees that the UF’s largest college, which includes criminal justice, is emphasizing providing practical experience to students through internships and other partnerships with the private sector.

The keynote address was provided by Dr. Tara Shelley of Tarleton (TX) State University who presented results from her research into pharmacy robbery and burglary in which she interviewed 48 offenders convicted of stealing controlled substances for either personal use or drug diversion. She provided an interesting profile of pharmacy offenders who break into three groups—pure addicts (46 percent) who steal to get high, hybrids (44 percent) who are sometimes users who also sell on the street, and entrepreneurs (10 percent), who are more violent robbers and steal solely to make money.

A panel discussion on organized retail crime (ORC) investigations featured representatives from local, state, and federal law enforcement. Ben Dugan, Walgreens’ ORC investigations manager, moderated the discussion with Ronnie Faircloth of Broward County (FL) Sheriff’s Office, Carol Frederick of the Florida Department of Law Enforcement, and John Chiue, special agent with the FBI. Key takeaways from the panel included the movement of gangs toward focusing on identity theft because of the low risk/high reward. The investigators also talked about the impact of a lack of knowledge of ORC among judges and prosecutors.

A panel of ORC investigators featured (left to right) Carol Frederick of the Florida Department of Law Enforcement,Ronnie Faircloth of Broward County (FL) Sheriff’s Office, and John Chiue, special agent with the FBI.

Allen Atamer of LTAS Technologies offered attendees an interesting tutorial of “Exploring the Deep and Dark Web,” where illicit products are sold and bartered among criminals. He provided specific instructions for accessing the alternate Internet for retailers interested in seeing how their brand and merchandise is represented.

Due to the advance of Hurricane Matthew off the coast of Florida, many attendees had to leave early. About half of the original number of attendees present on Wednesday heard a panel of Rick Peck of TJX and Brent Onan of USS, plus Kevin Larson of Kroger and Stephanie Mitchell of Avery Dennison discuss how the retailers partner with solutions providers both inside and outside the LPRC framework to solve specific issues inside their company. Emy Johnson of Target moderated.

Apart from the educational sessions, attendees had multiple opportunities to meet with solution provider members of the LPRC as well as network with other attendees. The Tuesday night dinner was hosted atop the UF football stadium with drinks, barbecue, and games. For more information about the LPRC or the IMPACT conference, contact Dr. Read Hayes at rhayes (at) lpresearch (dot) org.

The post Largest LPRC Conference Concludes in Advance of Hurricane Matthew appeared first on LPM.

Retail losses due to external theft continue to rise and a major reason is that those people involved in retail crime can continue with little fear of significant punishment. If the crimes they are committing are not listed in the “violent offense” category, few will ever see the inside of a prison. The end result is retail loss prevention organizations continue to deal with the same people over and over again.

Everyone knows that prisons in the U.S. are full. So, what has that got to do with the retail industry?

Many of the people we apprehend stealing merchandise from our stores, writing bad checks, using forged or counterfeit credit cards, and passing bogus gift cards are former convicted felons and/or have cases pending in criminal court for the very retail crime for which they are now being apprehended. The majority of these convicted felons served only a small portion of their sentences behind bars, due to prison overcrowding and the expense to keep them locked up, therefore allowing them back out onto our streets, into our community, and into our stores.

The Debate on Crime and Punishment

The problem is not from lack of discussion. We hear concerns about the many issues involving prisons and punishment from judges, prosecutors, law enforcement, prison officials, not to mention politicians and legislators. Interestingly, those criminals who are committing retail crime also hear this discussion.

Here are a few of the major points in this debate:

• The prisons are full in many states, which means for every person taken in, someone has to be released.
• Offenders learn how to commit crimes while in prison.
• The cost to house a prisoner is $30,000 or more per year.
• There is little if any rehabilitation for offenders serving time in prison.
• The U.S. houses more prisoners than any other country.

How often have we heard these statements, especially from government officials and the media? How many times have we heard about the deplorable conditions of our prisons, the dangers inside these facilities, how little room is afforded these criminals, and how these prisoners learn from other inmates?

There is no doubt that this is a sensitive issue. Many states are dealing with retail theft and fraud by simply raising the felony theft levels, which apart from lowering the states’ crime statistics does nothing to combat retail crime. It simply makes more retail crime a misdemeanor offense.

Some states are actually researching the possibility of making misdemeanor theft from a retail store a “civil matter” between the thieves and the retailers. In this situation, the value of the merchandise would determine whether the retail crime would be criminal offense or a civil matter. Just imagine how those thieves and their attorneys could manipulate the criminal/civil figures. This would be yet another burden placed on the retailer.

Retailers need to be vigilant, watching for these types of bills circulating within the state legislatures. Once a bill like this is passed in one state, other states will see this as a way to improve their budgets by eliminating these costs in their criminal justice systems.

At some point, retailers are going to have to get involved in the issues of this debate and in the correction of these criminal justice issues that contribute to significant retail loss.

1. The Prisons Are Full

We hear this oft-repeated statement from legislators and state government officials: “Our prisons are full and there is no place to put these new offenders unless we release those who are already there.” For many, this argument creates the perception of multiple bunks in a tiny cell with little room to move around and no privacy. But many of us see a different image. We picture those offenders who should still be behind bars out on the streets, committing more crimes.

There is no doubt that the threat of incarceration is no longer a deterrent to retail crime. You can almost hear the criminal saying, “Where are they going to put me if they catch me? Even if they send me to prison, I won’t be there long.”

Many of those involved in committing retail crime are actually open about how they work the criminal justice system. I never pass up a chance to interview these offenders, and the information I gain is interesting and undeniable. When encouraged, an ex-convict will brag about defeating the system and what they can get away with. They laugh about the times they were arrested and how they beat the retailer who brought the charges against them. This is especially true for those involved in fencing stolen property. They know how hard it is to prove that they knew the property was stolen before they purchased it. Even if the arrest was accomplished through a sting operation, many times these fences just “walk.”

2. Learning Crime in Prison

In my opinion, this is a weak argument. Sure offenders learn things in prison, but no more than they learn out on the streets.

To be convicted for an offense that puts someone in prison, they had to commit a crime. This is not a chicken-or-egg argument. They first learned right in their own community—from their peer group, their gang, their family, on the street, on the Internet, by many means.

A person does not need to go to prison to learn how best to steal large quantities of merchandise from a retail store without being detected, steal someone’s identity, or commit many other retail crimes. So, the “prisons just create offenders” argument just doesn’t ring true.

3. The Cost to House a Prisoner

Cost is one of the most discussed issues concerning prisons. So, let’s look closer at the many issues surrounding the cost of housing offenders.

While in prison the state has to pay for food, living quarters, clothes (which are generally recycled and reused), medical expenses, miscellaneous needs, and, of course, the prison guards and staff. The amounts vary by state. Some say it costs as much as $50,000 per prisoner, but the most realistic figure is closer to $20,000 to $30,000 per year.

How do those figures compare to the cost to the public when offenders are released back into the community? Keeping in mind that the recidivism rate is 60-plus percent, taxpayers are paying for both those incarcerated as well as when they are released.

While they are in our community who pays for their food, their clothes, their living quarters, and their medical needs? Who pays for the parole officers who watch over these parolees? Who pays for the public defender the next time they are arrested? Who pays for the police who have to work on these new crimes?

One could argue that the cost to the taxpayer for early-release offenders could easily exceed the amount to keep them behind bars.

Remember that we’re not talking about first-time offenders. No one gets sent to prison for their first or even second felony, unless it involves serious violent crimes. Even those convicted of robbery will usually get second chances.

For example, I interviewed a person who was arrested in Texas for felony theft. During the interview, we discussed his past history of retail crime. He was an undocumented immigrant from Honduras and had been in the United States for six years. He came illegally into the United States specifically to work in organized retail crime (ORC).

After extensive training with an experienced team, he became the leader of his own three-person “clan” that traveled throughout the Midwest and Southeast committing retail crimes. He told me that he went “on a trip” approximately two times per month, staying out for three to five days each time. During those trips, his group would steal more than $20,000 in product from drug and grocery stores each day. He acknowledged that his team had stolen more than $100,000 on many of these five-day outings. Each evening his clan would box and ship the stolen items to a fence, who was affiliated with the MS13 gang, for approximately 20–25 percent of the retail value.

Here is the most interesting part of the interview: He said that in the six years he had been doing this, he had been arrested four times, all in Texas. Although he had been stopped several more times, these were his only actual arrests where he was taken into custody. The first felony theft case he “plea bargained” for two years’ probation. During the second felony theft arrest a year later, he plea bargained to extend the probation to four years. On the third felony theft arrest two years later, he plea bargained to extend his probation to five years.

All these probations occurred while this person remained undocumented. When I asked him how the prosecutor handled this, he said that the prosecutor told him that the immigration service would be notified of his case. Immigration never contacted him.

These cases all occurred within four years, and he had never even slowed his ORC activities. He said that while in training, his counterparts told him that as long as he didn’t hurt anyone physically, nothing would really happen to him, other than a few days in jail.

When discussing the issue of costs, what about the victims of these crimes? Who pays for the victims’ suffering, losses, or recovery from these crimes? Again, the cost to retail crime victims through city, county, state, and federal government may also exceed that $20,000 to $30,000 figure.

Wouldn’t it be nice to find the funds to conduct research that could answer the question of the cost of releasing offenders early versus keeping them in prison for their full sentence? Remember, when an offender is in prison, he is not in our stores.

4. Lack of Rehabilitation in Prison

For those who argue that there is no rehabilitation in our prisons: for the most part, it just isn’t true. There are educational and occupational courses offered in all U.S. prisons. The difference is the required cooperation needed of those prisoners who want an education.

Prisons cannot impose work on prisoners unless they want to work, or require them to get an education unless they want to be educated. They can’t be required to learn a new skill to assist them when they get out unless they want to learn that skill. Such mandates would fall under the legal concept of “cruel and unusual punishment.”

At the same time, most of us support a criminal justice system that offers prisoners the opportunity to change their lives through education or by learning productive skills. Most of us would even support giving someone a second or third chance if they are actually trying to succeed at rehabilitation. Many feel that if there is a way to help rehabilitate these folks, we as a society should try hard to accomplish that goal.

Many educators, religious and social organizations, and businesspeople donate their time to help the prison population. Education is probably the most important element in rehabilitation. The prisoners who participate in educational and occupational training have a much better chance of being successful once released from prison. But how many truly want these classes and think that education will help them when they are released?

The federal government even offers tax incentives to businesses that hire ex-convicts. Yes, there are incentives to hire those who are released early from prison. We all want these folks to succeed when released from prison, but in my opinion, it should be after they have served the time for the crimes they committed in the first place.

5. More Prisoners than Any Other Country

We can’t disagree with the statistic that the United States has the highest incarceration rate than any other country in the world. It can be sized up with one word, and that’s “freedom.” The reason we have more people in prison here is because we have more freedoms than any other country.

Generally speaking, individuals here in the U.S. can be whatever they want to be, but they have to earn it. They have to put in the time and the effort to get the things they want. It’s all right here for the taking, but it’s not free.

Unfortunately, for a great number of reasons that could be offered by psychologists, sociologists, and criminologists, many in our society do not want to earn their way. They have decided it is easier to simply take what they want or need, knowing, as we have discussed, that it is easy to get away without getting caught. Even if they are caught, little is done to them.

It is an unfortunate aspect of our society that the freedom and opportunity afforded our citizens contributes to the crime in our stores and ultimately to the large numbers in our judicial and penal systems.

Reform of the Justice System

We as retailers need to encourage our government leaders to look at the big picture, beyond the dollar sign, and take in all accounts of the costs–not just what appears on the bottom line. We are experiencing retail crime every day in our stores, and the number of these offenses will continue to rise because retail theft and fraud are considered non-violent crimes. It won’t be long before prisons refuse anyone who has not committed a serious violent crime. Some states are already leaning that way. For example, in 2015, California released nearly 3,000 inmates in an effort to diminish its prison population to a court-mandated level.

Many times, those involved in property crimes receive probation the first, second, and even third offenses. This keeps those individuals out on the streets with the ability to continue committing retail crime in our stores. We have heard offenders over and over say, “Retail theft is profitable, with little consequence.”

No one can argue that our prison system does not need to be fixed. The fact that our prisons are overpopulated is not an excuse to open the doors to retail criminals who continue to prey on our stores over and over again.

Retailers can and should take the lead in addressing this problem with state legislatures. Controls have to be created, and states should be held responsible to protect taxpayers from these offenders.

This article was first published in 2012 and updated October 10, 2016.

The post The Prisons are Full: The Impact on Retail Crime appeared first on LPM.

Loss prevention—also known as asset protection—is an ever-broadening, ever-growing field that has a lot to offer an entry-level job seeker. According to the Loss Prevention Foundation, the industry’s “wide spectrum of career options and tremendous potential for professional growth” make the job a rare find in today’s labor market. And the projected job growth—5 to 8 percent between 2014 and 2024—is on par with other industries, according to the Occupational Information Network (O*NET). It’s worth a closer look. But just what does a loss prevention associate do, anyway?

Industry Overview

Loss prevention was once primarily responsible for the physical security of a retail space. LP once used to guard exit doors and stop shoplifters. However, many people are still under the misconception that this is still the LP associate’s dominant function, which is far from the case today. Contemporary loss prevention professionals also must handle employee theft issues, data protection, safety and risk management, inventory audits, legal compliance, and matters related to organized retail crime and fraud. It’s more appropriate to say that loss prevention has evolved into a core business function that plays a crucial role in protecting the profits of the world’s largest retailers.

As an early-career associate, the loss prevention associate job description may not include all of these functions right away. Nevertheless, it’s important to recognize from the outset that such responsibilities eventually fall under the domain of the loss prevention department in many organizations. If an entry-level job seeker chooses to progress and grow in an LP career, he or she will want to be aware of and conversant with all these business areas. It’s never too soon to start learning about them.

Job Titles and Responsibilities

Generally, an entry-level job title in LP is the “loss prevention associate.” However, the evolution of the field and responsibilities contained therein means that titles can change to reflect that. Alternative titles for entry-level LP jobs could include:
• Loss prevention and safety specialist
• Asset protection specialist
• Loss prevention agent
• Loss prevention security guard
• Recovery associate

Job parameters for a loss prevention associate will vary depending on the particular retail organization. However, by and large, all loss prevention associates are expected to work in harmony with the rest of the retail team to achieve store objectives for preventing theft and ensuring safety. Sometimes LP associates assist in processing inventory and merchandise returns as well.

A careful review of recent job postings for loss prevention associates on LPjobs.com—the primary job board for loss prevention postions—reveals that the role can entail some combination of the following responsibilities:
• Provide quality customer service and positive shopping experiences to deter theft.
• Respond to customer and associate incidents where safety and/or company liability may be concerned.
• Work with investigators or other LP/AP team members to investigate criminal violations and/or recover stolen merchandise.
• Monitor inventory shrinkage and follow company procedure to minimize shrink.
• Perform store surveillance as directed by management, such as maintaining focus on areas of visible shrink.
• Verify accuracy of merchandise returns.
• Prepare and maintain comprehensive and accurate documentation for inventory, merchandise returns, customer accidents, apprehensions and recoveries, and more.
• Perform minor repairs around the store.
• Learn proper safety procedures and train other store associates on these and other LP-related issues, such as inventory control processes.
• Maintain store monitoring technology and equipment.
• Review surveillance video and exception report for possible incidents of theft or fraud.
• Understand and maintain rigorous compliance with the law and company policy regarding apprehensions, searches and seizures, and the preservation of evidence.
• Detect and apprehend shoplifters if dictated by company policy.
• Conduct safety checks and report any hazardous or unsafe activity to management on duty immediately.
• Successfully complete all asset protection/loss prevention training requirements and certification courses and keep credentials up to date.

More Information

A decade or two ago, early-career loss prevention associates did not have many educational resources available to them. They just didn’t exist. Today’s LP associates can access webinars, college programs, and even resources like LP Magazine and the certification courses through Loss Prevention Foundation to gain a better understanding about how the industry works and how LP fits into the bigger picture of business in the retail environment.

The answer to the question “What does a loss prevention associate do?” will vary, but entry-level applicants who spend time understanding the job, the retail organization, and the challenges specific to both will find a great deal of opportunity in this space.

The post What Does a Loss Prevention Associate Do? appeared first on LPM.

Over 260 loss prevention professionals, solution providers, and retail manufacturers gathered at the University of Florida (UF) in Gainesville October 3–5 for the annual Loss Prevention Research Council (LPRC) Impact Conference—the largest event in the organization’s sixteen years.

This year’s conference featured presentations on current research results, retail – law enforcement joint ORC investigations, cyber crime, working group discussions, and multiple networking events.

A Monday evening reception was held at the LPRC’s innovation lab just off campus where over thirty technologies are installed in a simulated retail environment. Funded by Tyco Retail Solutions, the innovation lab functions as a demonstration facility where retail teams can see various asset protection technologies in action. The lab is open to LP organizations year-round to hold team meetings and work with LPRC scientists on issues related to their specific companies.

The full day of presentations began Tuesday morning with a welcome from David Richardson, dean of the College of Liberal Arts & Sciences, who told attendees that the UF’s largest college, which includes criminal justice, is emphasizing providing practical experience to students through internships and other partnerships with the private sector.

The keynote address was provided by Tara Shelley, PhD, of Tarleton (TX) State University who presented results from her research into pharmacy robbery and burglary in which she interviewed forty-eight offenders convicted of stealing controlled substances for either personal use or drug diversion. She provided an interesting profile of pharmacy offenders who break into three groups—pure addicts (46 percent) who steal to get high, hybrids (44 percent) who are sometimes users who also sell on the street, and entrepreneurs (10 percent) who are more violent robbers who steal solely to make money.

A panel discussion on organized retail crime (ORC) investigations featured representatives from local, state, and federal law enforcement. Ben Dugan, Walgreens’ ORC investigations manager, moderated the discussion with Ronnie Faircloth of Broward (FL) County Sheriff’s Office, Carol Frederick of the Florida Department of Law Enforcement, and John Chiue, special agent with the FBI (see photo). Key takeaways from the panel included the movement of gangs toward focusing on identity theft because of the low risk/high reward. The investigators also talked about the impact of a lack of knowledge of ORC among judges and prosecutors.

Allen Atamer of LTAS Technologies offered attendees a very interesting tutorial of “Exploring the Deep and Dark Web” where illicit products are sold and bartered among criminals. He provided specific instructions for accessing the alternate Internet for retailers interested in seeing how their brands and merchandise are represented.

Due to the advance of Hurricane Matthew off the coast of Florida, many attendees had to leave early. About half of the original number of attendees present on Wednesday heard a panel of Rick Peck of TJX and Brent Onan of USS, plus Kevin Larson of Kroger and Stephanie Mitchell of Avery Dennison discuss how the retailers partner with solutions providers both inside and outside the LPRC framework to solve specific issues inside their companies. Emy Johnson of Target moderated.

Apart from the educational sessions, attendees had multiple opportunities to meet with solution provider members of the LPRC as well as network with other attendees. The Tuesday night dinner was hosted atop the UF football stadium with drinks, barbecue, and games. For more information about the LPRC or the Impact conference, contact Dr. Read Hayes at rhayes (at) lpresearch (dot) com.

7th Annual CLEAR Conference Held in Reno, Nevada

The Coalition of Law Enforcement and Retail (CLEAR) held their 7th Annual ORC Training Conference in Reno, Nevada, October 25–28. This year’s conference boasted an outstanding agenda, exceptional presentations, and active participation from
200 loss prevention and law enforcement professionals from the US and Canada.

Some of the presentation topics included:

• Return fraud
• Lessons from a defense attorney
• Credit card fraud
• Identity theft and mobile phone fraud
• Anatomy of a critical incident
• ORC trends panel
• Open-source investigations

There was also a presentation by the Las Vegas Metro “RAP” Team and an update on legislative action on organized retail crime.

Members of the Toys”R”Us national investigations team

Awards

In addition, CLEAR gave out awards for Retail Loss Prevention Investigation of the Year as well as the Law Enforcement Investigator of the Year. These awards are presented based on nominations from the loss prevention and law enforcement communities to honor those that have shown outstanding service. The CLEAR board of directors then chooses the final recipients following in-depth review and discussion.

Outstanding Loss Prevention Investigation of the Year. This award went to the Toys“R”Us national investigations team including Ed Fuentes, Amanda Hobert, Mike Flanagan, Dennis Dixon, BJ Day, Tyson Roberts, Larry Evangelista, Scott Tassinari, Winston Goreen, and Jay Tubaugh. The team identified and tracked down a group traveling the country using rental vehicles and targeting high-end electronics stores. They coordinated with their counterparts and law enforcement from coast to coast to locate and apprehend four suspects who had

Det. Mike Garcia

stolen tens of thousands of dollars of merchandise in five days. They were also able to partner with law enforcement to intercept shipments and

recover $20,000 in stolen merchandise.

Law Enforcement Investigator of the Year.Detective Miguel “Mike” Garcia of the Miami-Dade Police Department was recognized for his work on the successful investigation of the theft of over 8 million dollars in plastic delivery containers from numerous Florida retailers.

Next year’s conference will be held October 16–19, 2017, at the Menger Hotel in San Antonio, Texas. For more information about CLEAR, visit clearusa.org.

The post Largest LPRC Conference Concludes in Advance of Hurricane Matthew appeared first on LPM.

LP Worldwide: Vancouver police bust ‘predatory’ baby formula fencing ring

A suspect allegedly using a “predatory fencing method” that exploits the vulnerable population of the Downtown Eastside (DTES) has been arrested following the seizure of approximately $50,000 worth of baby formula stolen from stores in Metro Vancouver. The unit’s investigation, dubbed “Lactose Intolerant” started after a tip to police about a person who was buying large quantities of baby formula in the DTES. The fence was allegedly shipping the stolen goods to China for a large profit.

VPD Detective Cst. Doug Fell explained the fence was mobile and part of an organized retail crime group. “They use a predatory method… they take our DTES drug-addicted person, who are disadvantaged and they put them to work,” said Fell. “We estimated this person has 10 to 20 people working for him on a daily basis. He’s paying 30 percent on the retail value for every product they bring in and placing orders with them.”

The retail value of a baby formula is $33, but Fell says it is different from the normally seen fencing operations because the suspect was getting two-and-a-half times the cost in China [roughly $90 per package of baby formula]. Police suspect the fence was getting up to 100 or more formula units a day and has been in operation for about a year.

Police, in consultation with loss prevention officers, believe the suspect could be responsible for 70 percent of the thefts of baby formula in the Metro Vancouver area. Fell estimates that in the last year this suspect has been responsible for moving $200,000 in baby formula. The investigation is ongoing. While police said baby formula theft rings still exist in the Lower Mainland, they do not believe there are any other groups that are operating on the same scale. [Source: Global News]

Increased fraud turns retail holiday cheer into holiday horror

Omni-channel commerce technology and operations provider Radial recently released the results of its Annual Holiday Fraud Index, which revealed the ongoing risk retailers face of coordinated and sustained fraud losses.

“We’re heading into our second holiday season with more retailers EMV ready, which means CNP fraud becomes a lot more attractive to organized and tech-savvy criminals,” said Stefan Weitz, chief product and strategy officer at Radial. “Combine that with the increased prevalence of data breaches and retailers are faced with the daunting challenge of approving as many orders as possible while minimizing fraud. Bottom line for most retailers: if you are managing fraud yourself, you are going to get wrecked.”

In 2016, there have already been more than 2 billion records stolen, and the increasing occurrence of hacks, leaks and data breaches show no sign of slowing down. The report highlights six key findings retailers should keep in mind this holiday season and beyond:

• The largest segment of fraudulent activity is CNP fraud and fraud attacks have continued to rise in nearly every market sector. On average, the report claims a 30 percent increase in online fraud attacks. Electronics, Entertainment and Jewelry market segments experienced the biggest impact.
• While some cross-border countries present a greater fraud risk, others offer increased sales potential. The highest cross-border e-commerce attack rate belongs to Venezuela, which came in at around 17 percent, while Korea and China account for more than 78 percent of sales during the holiday season.
• Cyber Monday usually sees a significant drop in cross-border fraud attack rates.
• After Dec. 25, digital gift card fraud spikes. These attacks are 10 times more likely to take place during the holidays compared to other payment methods, but it jumps to 25 times more likely the week after Christmas.
• Certain billing and shipping domains and payment tenders see a massive jump in digital gift card attacks during the holidays.
• The risk factors for digital gift card purchases can vary based on IP locations and credit card bank identification number (BIN). Credit card BIN and IP country can have huge impacts when accessing risk.

“It’s peak season, so we know retailers are going to see significant spikes in order volumes. Right alongside that comes increases in fraud attacks,” said Weitz. “Retailers must be on alert and be able to protect their customers, but they also need to protect their bottom lines. Killing too many good orders can result in millions of lost dollars. It’s an insanely tricky thing for a retailer to balance.” [Source: PYMNTS]

LP Worldwide: Syringe used to spike chocolate drink at Hong Kong convenience store

Police are warning the public to be on the alert after a woman fell ill after consuming a packaged chocolate drink which might have been spiked using a syringe. A man was struck by dizziness, abdominal pain and vomiting upon drinking the 250ml packet of Vitasoy chocolate milk soon after buying it from a nearby 7-Eleven store in Hong Kong. He was taken to the hospital for treatment and later discharged.

During an investigation, officers found a suspected syringe hole covered by the fold at the top of the drink carton. They found no further signs of tampering after checking other packaged drinks in the store. Chief inspector Yin Hiu-yu from Sau Mau Ping district said it was not known whether there were any poisonous substances in the man’s drink, which was being examined by the government laboratory.

A police source said it was believed the suspected contaminated beverage was placed in a fridge in the convenience store shortly before the victim bought it. A spokesman for 7-Eleven said it believed the incident was isolated and it would assist in the police investigation by providing security camera footage.

It was understood that the chain had not received any blackmailing or threatening messages. It also had no plans to shelve its packaged drink products, as the case was not regarded as a food safety issue. The Sau Mau Ping district crime squad was investigating. [Source: South China Morning Post]

Wigs for cancer patients stolen in store break-in

A Vernon, British Columbia,  business owner is still reeling after a large group of thieves made off with more than $20,000 worth of items, including wigs for cancer patients, in a break-in. Beauty Haven owner Carol Roney says as many as seven people broke into her salon and used the store’s laundry hampers, recycling bins and garbage cans to load up on products.

“They would leave and then come back to pack away more,” Roney said of the break-in, which was caught on video surveillance. After prying the door open, Roney said the suspects spent almost three hours in the store. At first, only a couple of men gained entry, but more, including a few women, showed up later. In total, Roney counted seven different individuals who took part in the theft.

Among the items taken were individual stylists’ scissors and other personal tools of the trade, as well as more than 20 wigs. “We treat a lot of cancer patients and style the wigs for them,” Roney said. “There were wigs stolen that people were coming to pick up, that were ordered specially for them. They’d been waiting for them to come in.”

She reported the break-in to police and provided video footage, but has not been informed of any arrests in the case. She says the store is taking extra precautions to prevent another break-in. [Source: Info News]

Retail owner locks in would-be shoplifter, cohorts free accomplice by ramming storefront with car

A clothing outlet owner got more than he bargained for when he locked a would-be shoplifter inside the store, with two cohorts bursting through the storefront in a compact car to free the foiled thief. Tulsa police were summoned to a clothing retail store on a disturbance, which quickly turned into reports of a car crash.

Officer Brandon Smith said two men and a woman appeared to be browsing inside Super Tops & Bottoms when the owner caught them attempting to shoplift. Two of them escaped, and the owner locked the third inside. The two who fled outside returned for their accomplice by ramming a Dodge Dart into the storefront three times, Smith said. The trio then fled in the car.“They were desperate enough to do that to get their buddy out of trouble,” Smith said.

“There could have been underlying issues, they knew maybe they had warrants or some other stuff that they didn’t want to be found out,” Smith said. “Normally a simple larceny, if it’s a first offense, it’s just a ticket. So maybe for them they knew that they were facing some more serious charges.”

The would-be thieves and owner were the only people inside the shop, Smith said. No injuries were reported, and the merchandise was recovered. The storefront sustained significant damage with shattered windows and busted-in double doors. But authorities report the building’s structural integrity was fine. [Source: Tulsa World]

LP Worldwide: Major credit card fraud busted

Police arrested five persons who they said were involved in a “major” credit card fraud. According to police, 67 credit cards, seven mobile phones, tablets, laptops, swipe machines, two cars and one motorcycle was seized from them. Police said the gang was arrested after they set up roadblocks to check cars on a tip off that that they were arriving to Kasargod from Kannur (India).

District police chief Thomson Jose said the accused could be part of a larger network of online fraudsters, with each having a role to play. Some of the accused buy credit card information — called dumps — from black markets available online using bitcoins, he said. Bitcoin is a form of digital currency, created and held electronically.

“Once the dumps are bought, they encode the data onto a blank credit card using a loading machine,” Jose said. Loading machines are easily available on e-retail stores, he said. The fake cards are now ready for swiping at brick and mortar shops, and they usually prefer jewelry shops, said Rahman. He said the accused also get dumps from a point person in Uttar Pradesh. On questioning, the accused reportedly told police there were 200 sub-agents under the point person.The prices of dump vary depending on the particulars such as type of card and expiry date. ‘Fullz’, which includes the victim’s name, address, credit card information, social security number, date of birth, will cost a bomb. “They use cards which do not require PIN,” said the district police chief.

Police said credit card data are obtained through physical skimming, infecting device with malware, or hacking into a retailer’s internal network. “Those who steal data rarely make the purchases. The bigger the network of their buyers, more money they make.” Most of the victims are from the Middle East, and “other foreign countries”. They have not yet used Indian cards. [Source: The New Indian Times]

Woman who set fire to Dollar Tree Store was ‘upset’ there were no shopping carts

A 64-year-old woman has been charged with first-degree arson in connection with a fire that destroyed several businesses in a Kent (Washington)strip mall. The King County Prosecutor’s Office charged Linda Katherine Poplawski with first-degree arson. Bail was set at $225,000. Several businesses in the strip mall were destroyed in the fire. The roof of the building collapsed after the fire erupted.

According to court documents, the woman “became upset about there being no shopping carts at the Dollar Tree store.” She left the store, returned shortly afterward and told employees she was going to burn the store down. The woman then went into an aisle where cards and party supplies were and then left the store, telling employees the store was on fire. Employees found a fire and attempted to extinguish it, but they were unsuccessful. [Source: Crime Watch Daily]

The post Breaking News in the Industry: November 21, 2016 appeared first on LPM.

Editor’s Note: Organized retail crime remains an ongoing challenge for loss prevention programs across the country. The following article excerpt provides a historical account on this national dilemma.

When we wanted to build an ORC team, the first thing we did was conduct a full diagnostic of our current structure. We established a data-collection process to identify crime patterns, searched for the right investigative talent, explored the right technology, produced educational material, and started networking with law enforcement. Running an organized retail crime department was more complex than we first thought. We clearly needed to develop a comprehensive organized retail crime strategy that addressed the right issues.

Our strategy was comprised of eight key components—mall operations, fence operations, cyber crimes, education, supply chain, legal, legislative, and law enforcement partnerships. Following is a brief description of each component.

Mall Operations. Based on intelligence and data analysis, our investigators conduct surveillances to identify professional shoplifters targeting our stores. Once they identify a crew, they will observe them stealing and continue the surveillance out of our store and to the vehicle. Once the crew has filled their van with stolen product, law enforcement, which has already been notified, apprehends the entire crew in their vehicle.

Fence Operations. We devote a lot of time and energy to fence operations because we know that we can really disrupt the supply-and-demand equation at this point. Putting the fence out of business accomplishes many objectives—no fence means no customers and no one to whom the shoplifting crews can sell their merchandise. We locate fences in many different ways, including tips from informants, associates, and friends, investigator shops, and information from law enforcement.

Cyber Crimes. Fences are not restricted to just brick-and-mortar locations, but also exist online. The crews usually receive 25 percent of a stolen item’s value from the fence. The fence usually sells the product for 50 percent of the value, but items can go for about 70 percent of their value on auction sites, where sellers have relative anonymity. Our investigators diligently match large known theft reports to online auction sales looking for leads.

Supply Chain. Our ORC team works in close partnership with our supply-chain LP team because we have learned that the same fence who sells stolen cargo also sells stolen goods from our stores.

Education. We are passionate about education, not only within our own organization, but within the entire retail industry as well as the law enforcement community. One of our first educational projects was a law enforcement information guide. We also sponsor and conduct organized retail crime training and seminars for law enforcement.

Legislation. We work closely with our government affairs department as well as trade organizations to help educate politicians on the value of ORC legislation.

Legal. We deploy a dual legal strategy. On the criminal side, when we apprehend professional shoplifters or shut down fences, we want to ensure that they receive the maximum penalty, including restitution. Clearly there is a value to putting these criminals out of business. On the civil side, we want to make our company whole, so we also sue for damages.

Law Enforcement Partnerships. The ORC team works hard to develop great partnerships with law enforcement. Without them, we can’t stop vehicles, raid fences, or obtain subpoenas for Internet records.

This article was excerpted from “Setting the Stage for an Organized Retail Crime Strategy” and was updated November 28, 2016. 

The post Building an Organized Retail Crime Team appeared first on LPM.

Holiday weekend recap: Purchases up, but average spending declines

Average spending per person over Thanksgiving weekend totaled $289.19, down from $299.60 last year, according to a survey conducted by National Retail Federation. The survey found that 154 million people made purchases over the extended holiday weekend, up from 151 million a year ago. When it comes to where consumers shopped, 44% went online and 40% shopped in-store. The most popular day to shop online was Black Friday, up 1.3% from last year to 74%, followed by Saturday (49%), Thanksgiving (36%), and Sunday (34%). Of those that shopped in store, 75% shopped on Black Friday, up 3.4% from last year, 40% on Saturday, 35% on Thanksgiving and 17% on Sunday.

Additional highlights from the survey:

• 29% of shoppers headed out after 10 a.m. on Black Friday, up from 24% last year. Less than 15% of consumers arrived to the stores by 6 a.m. or earlier on Black Friday.
• Early Thanksgiving Day in-store shopping dropped by 19% with only 7% of consumers heading to stores before 5 p.m. – while shopping that day itself was up 1%.
• Only 9% of consumers have finished their holiday shopping, down from 11% last year. And 23% have yet to make any dents to their lists, up from 19% last year.
• Of those that shopped in store, 51% shopped at department stores, 34% at discount stores, 32% at electronics stores, 28% at clothing or accessories stores, and 25% at grocery/supermarket stores.
• 56% of smartphone owners and 53% of tablet owners used their devices to assist with weekend shopping activities.

According to research by Adobe Digital Insights, online sales on Thanksgiving and Black Friday were $5.27 billion, up 18% from a year earlier and higher than its estimate of $5.05 billion. [Source: Chain Store Age]

‘Operation Blitz’ targets large-scale retail theft

While holiday shoppers are out searching for bargains this season, police will be out looking for professional shoplifters. Starting Friday, 30 law enforcement agencies across the state of Minnesota are targeting organized retail theft and financial fraud through an effort called Operation Blitz. The operation will run until Christmas.

Participating agencies will focus on organized retail crime — bank card skimming, identity theft, large-scale shoplifting and the like, said St. Paul Police Sgt. Charles Anderson. Anderson, who serves as executive director of the Twin Cities Organized Retail Crime Association, said Operation Blitz won’t focus on “the mom who goes in and steals a can of baby formula for her kid.” “What we care about is the guy going in and stealing 50 cans of baby formula, repackaging and selling it overseas,” he said.

Take what police say happened at a St. Paul CVS two weeks ago, when a man walked in with a gym bag and loaded it with cleaning supplies. He was out of the store in under 40 seconds. Police busted him outside another store. “In plain view, inside his van it was just packed,” Anderson said.The thief had a list from someone else known to police. He had been ordering $1,000 worth of stuff every week from this professional shoplifter with ties to drug and human trafficking cases.

During Operation Blitz, law enforcement agencies and retailers will share information with each other and physically target locations, like retail parking lots and social media-based trade and swap groups, where stolen goods are sold.

Police believe it is time the public had a better understanding of these kinds of crimes, considering it costs us all in the end. “It has a public safety impact and we aim to address it,” Anderson said. [Source: CBS News Minnesota]

LP Worldwide: Cops hit brakes on York region theft ring

Three members of a Mississauga family, nabbed repeatedly for theft and drug related charges over the last 16 years, were scooped up by York Regional Police as the alleged leaders of a massive auto theft ring. Balwinder Dhaliwal, his wife Kuljit, and their son Balkevinjit. aka Kevin, face a slew of charges. But the investigation into the father, mother and son — dubbed Project Cyclone — also led to 20 other arrests and uncovered links to alleged cocaine trafficking, conspiracy to import heroin, cargo theft and fraud, police said.

“If there was a profit to be made, this group … would jump on the opportunity,” Det.-Sgt. Paul LaSalle said Friday, explaining the allegations. More than $5 million in high-end vehicles and stolen goods were recovered in the probe, he said.

Investigators also allegedly uncovered a plan to kidnap a wealthy Vaughan man. “This plot included plans to impersonate as police … taze the victim to incapacitate him and eventually demand a ransom to secure the safe release,” LaSalle alleged, adding cops “foiled” the suspected kidnapping plot before anyone was hurt.

In all, police recovered 60 vehicles worth over $3.4 million — Lamborghinis, Maseratis and Porches as well as Hondas, Toyotas and Fords. Cops also found a warehouse filled with $1.4 million in stolen goods, including alcohol and a trailer full of Nutella. Two firearms, cocaine, heroin and marijuana were also seized along with over $200,000 in cash, including nearly $20,000 allegedly found buried in the backyard of the accused family’s home. [Source: The Toronto Sun]

FBI releases 2015 crime statistics

After two years of decline, the estimated number of violent crimes in the nation increased 3.9 percent in 2015 when compared with 2014 data, according to FBI figures released Sunday. These and additional data are presented in the 2015 edition of the FBI’s annual report “Crime in the United States”. This publication, which is a statistical compilation of offense, arrest, and police employee data reported by law enforcement agencies voluntarily participating in the FBI’s Uniform Crime Reporting (UCR) Program, also includes limited federal crime reporting, human trafficking, and cargo theft data.

The program collects information on crimes reported by law enforcement agencies regarding violent crimes, as well as the property crimes of burglary, larceny-theft, motor vehicle theft, and arson. The program also collects arrest data for 20 additional offenses that include all other crimes except traffic violations.

16,643 city, county, university and college, state, tribal, and federal agencies submitted data in 2015. A high-level summary of the statistics submitted included:

• The FBI estimated that law enforcement agencies nationwide made 10.8 million arrests, excluding traffic violations, in 2015.
• Nationwide, there were an estimated 7,993,631 property crimes. The estimated numbers for two of the three property crimes show declines when compared with the previous year’s estimates. Burglaries dropped 7.8 percent, and larceny-thefts declined 1.8 percent.
• Collectively, victims of property crimes (excluding arson) suffered losses estimated at $14.3 billion in 2015.
• The arrest rate for violent crime was 157.2 per 100,000 inhabitants, and the arrest rate for property crime was 458.9 per 100,000 inhabitants.

Each year when “Crime in the United States” is published, some entities use the figures to compile rankings of cities and counties. This can lead to simplistic and/or incomplete analyses that often create misleading perceptions adversely affecting communities and their residents. As a result, caution must be practiced when comparing such statistics. [Source: Federal Bureau of Investigation]

Online shopping security tips for Cyber Monday and beyond

If you buy more items online than in-store, you are not alone. According to a recent study, consumers are buying more items on the Internet than at traditional brick-and-mortar businesses. A growing number of consumers are opting for Cyber Monday to kick-off their holiday shopping.

Randal Vaughn, professor of information systems in Baylor University’s Hankamer School of Business, said that while most online merchants seem to have excellent consumer protections in place, he has a few tips to help consumers be smart online shoppers.

• Consider alternative payment options besides credit cards. For shoppers who want to limit their use of credit cards or protect their credit card information, they can consider other payment options. For example, using gift cards such as an Amazon gift card at some online merchants. Others may want to consider using a virtual credit card such as Bank of America’s ShopSafe virtual card or a Paypal virtual card, Vaughn said.
• Avoid using debit cards for online merchants. “Protections against fraudulent debit card charges are not as strong as protections against fraudulent credit card charges. He said if reported within two days, debit card losses are capped at $50. However, consumers who delay longer than two days can be liable for as much as $500.
• Stick with well-known merchants. Extremely deep discounts could be a sign of a less-than-reputable business. “There is a large market for counterfeit goods, particularly in the fashion industry. I generally search for online reviews of a web merchant before doing business with the merchant. However, reviews can be faked and one should be cautious,” Vaughn said.
• Although online shopping is convenient, don’t completely forego traditional retailers or local businesses. Even with the ease of online shopping, sometimes going in-store may be the best option.

[Source: Knowridge Science Report]

Nothing like the real thing: 1 in 5 Americans believe the quality of counterfeit products is often the same as real products

An alarming 1 in 5 Americans (22 percent) said they believe the quality of counterfeit products is often the same as the quality of the real products, according to a recent survey conducted online by Harris Poll on behalf of The U.S. Golf Manufacturers Anti-Counterfeiting Working Group (The Golf Group). This despite the fact that there is no way to verify the quality of the process or materials used to make counterfeit products.

The survey highlighted several key gaps in Americans’ perception of counterfeit products. The gaps were magnified among younger Americans. Twenty-nine percent of Millennials (ages 18-34) and 26 percent of those aged 35-44 said that counterfeits are often the same quality as the real products. Furthermore, 86 percent of Americans said they believe fashion products are counterfeited frequently.

The Office for Economic Co-operation and Development estimates that counterfeit products across all industries cost the world approximately $250 billion each year.

In the survey, several concerning developments about the opinions of Americans toward counterfeit products were uncovered:

• Money Matters More – While the vast majority of Americans (77 percent) said that they believe buying known counterfeits is unethical, almost 1 in 3 (29 percent) said they would consider purchasing counterfeit products if it saves them money.
• Millennials Miss the Message – Millennials are more likely than those aged 45 and older to admit they would consider purchasing counterfeit products if it saves them money – 39 percent of Millennials say they would consider it, compared to 22 percent of those 45 and older.
• Looks Make an Impression – About one quarter of Americans (24%) said they don’t care if a product they purchased is counterfeit as long as it looks like the real thing.

[Source: Market Wired]

The post Breaking News in the Industry: November 28, 2016 appeared first on LPM.

Shoplifting turns into police chase, crash, and arrests

The Clackamas County Sheriff’s Office says two Vancouver women were arrested after shoplifting at Clackamas Town Center, leading police on a high-speed chase and crashing their car in a driveway on Southeast 92nd Court. The two women, 19-year old Nina Jackson and 20-year old Chaniq Green, had allegedly filled two bags full of clothing at the Forever 21 store inside the mall, then left the store without paying.

One of the deputies responding to the theft call, spotted the suspects car driving north on Southeast Bob Schumacher.  When the deputy turned on the lights and attempted to pull over the car, Green accelerated away from the deputy at a high rate of speed. The deputy lost sight of the car, only to find it a short time later flipped on its top in a driveway at 11030 Southeast 92nd Court. Both Jackson and Green were able to get out of the car and run away but were arrested while trying to hop a fence of a nearby property.

After being taken to the hospital to be checked out for possible injuries from the crash, both were arrested and lodged in the Clackamas County Jail. Ms. Green (the suspect vehicle’s driver) was charged with Theft II, Hit and Run — Injury, Attempt to Elude Peace Officer X2
, Reckless Driving
. Her bail was set at $52,500. Ms. Jackson was charged with Theft II
 and Interfering with a Peace Officer. The alleged stolen property was recovered in the vehicle and returned to Forever 21.  [Source: KXL.com]

Amazon bolsters effort to protect brands from counterfeiting

Bloomberg, citing a source familiar with the matter, reports that the world’s largest e-retailer is developing teams to address counterfeiting in the U.S. and Europe and made the issue a top priority for 2017.

The teams will reportedly encourage more brands to register with Amazon, which will enable the e-retailer to require proof from its sellers that they have permission to market those brand-name goods. Amazon debuted a registry earlier this year for select brands and began implementing fees for merchants selling those items. Legitimate sellers argued that the price to sell such goods a, but Amazon said the system showed how seriously it takes counterfeiting.

Although Amazon long knew about the problem of cheaper, knockoff products, it generally relied on its sellers to identify and report them. Removing them from the marketplace entirely was, at best, a mixed proposition for affected sellers. The new effort reportedly follows a breakdown in talks with the National Football League and Major League Baseball about selling licensed merchandise on Amazon. The leagues were concerned about Amazon’s inability to account for fake goods.

Amazon also recently filed lawsuits on behalf of select merchants who were particularly hurt by the sale of cheap knockoffs on the website. “Amazon has zero tolerance for the sale of counterfeit items on our site,” the company told Bloomberg, adding that it is “aggressively pursuing bad actors.”  [Source: INDDST.com]

Fraud during the holiday shopping season is costing retailers $2 billion

While Americans are expected to spend a near-record $952 billion during the 2016 holiday shopping season, retailers will be plagued by about $2 billion in fraudulent returns, according to the National Retail Federation (NRF). That seems like a small number (if any number with nine zeroes in it can be considered small), but it’s a problem that hurts shoppers, stores, and even municipalities that lose out on taxes. Part of a $15.9 billion annual problem, return fraud hits consumers the hardest because ultimately, it’s honest people who are forced to pay the price for the criminal actions of others. “Certainly there’s a loss of tax revenue,” NRF VP of Loss Prevention Robert Moraca told the Chicago Tribune. “And every item stolen has to be replaced, and that’s passed on to the consumer.”

This is not a small problem
Overall, on an annual basis, total merchandise returns come to about $260.5 billion for retailers in the United States, according to NRF (opens in PDF). About 6.1% of that number is people either abusing the return process or making fraudulent returns (coming to the aforementioned $15.9 billion number). During the holiday season, the NRF estimates, overall returns come in at 10% (about 2% higher than the rest of the year). About 3.5% of those returns end up being fraudulent, a $2.21 billion problem. “Return fraud remains a critical issue for retailers with the impact spanning far and wide, in-store and online,” said Moraca in an NRF report. “While technology has played a significant role in deterring many in-person fraudulent transactions that would have otherwise gone unseen, there is little that can be done to prevent a determined criminal who will find a loophole one way or another. When it comes to retail fraud, retailers can build taller walls, but criminals continue to find taller ladders.”

How do the frauds work?
Thieves use a variety of scams to commit return fraud, but nine in 10 retailers told the NRF for its report last year that they have experienced people returning stolen merchandise. In addition, a little over 70% of stores told the trade organization that they deal with “wardrobing,” the practice of someone using/wearing an item then returning it. Other examples of return fraud and the percentage of retailers that say they have experienced them include:

The return of merchandise purchased with counterfeit money (75.8%)
Return fraud made by “known organized retail crime groups” (71%)
Employee return fraud or collusion with external forces” (77.4%)

“Retailers have the difficult task of providing superior customer service by always giving the benefit of the doubt to their shoppers when it comes to returns, while simultaneously working to make sure they protect their business assets” says Moraca.  [Source: Business Insider]

Why Retail Stocks Fell Despite Strong Holiday Sales

For some odd reason or several odd reasons, the mood on how the holiday season started for retailers shifted negatively somewhere during Sunday afternoon and extended into Monday. At first, the holiday season was seen as getting off to a festive start. Consumers stepped up big-time to buy strong deals on TVs, apparel and other electronics. Shopping was done from desktop computers, smartphones and to a lesser extent from inside stores. From my vantage point, things looked pretty darn good. The steady stream of data I was receiving from Thanksgiving Day through Sunday was consistently impressive … especially the sales numbers on mobile devices. This is incredibly impressive in that retailers have finally unlocked an untapped sales channel by improving the user experience and because of large phone screens.

The stores looked normal, traffic wise, over the weekend. By normal I mean they were normal for a start to the holiday season that is being fueled by online shopping. The number of out-of-stock incidents on pricey items such as Sony’s Playstation 4, Xbox One and Samsung TVs was running high, according to the data at my disposal. Indeed, that is a great sign on the health of the U.S. economy, particularly so soon after the contentious election cycle. But there were retail stocks on Monday selling off despite the clearly positive news. J.C. Penney (JCP) shares slid 5% on cautious comments from an analyst, which came despite the company crushing it on Thanksgiving Day and Black Friday. I was in a J.C. Penney store ahead of an opening, and the lines were insane, far stronger than a year ago. The traffic strength continued into Friday morning. Foot Locker  (FL) and Finish Line (FINL) got hit slightly even as sneakers remain a top-of-mind holiday gift. Best Buy (BBY) by all accounts began the season decently, yet its stock fell about 2% on Monday’s session. Companies that were perceived to be early winners were sold off, weirdly. I could understand Sears (SHLD) and Abercrombie & Fitch’s (ANF) steep selloffs as each struggled to drive traffic to their stores, but the profit-taking in winners was odd.

A few potential reasons for the selloffs:
•    Online sales are often less profitable for retailers as they have to ship the product to the consumer directly or to their stores for a customer to pick up.
•    Heavy discounts were needed to drive the strong online sales, which may have come at the expense of profit margins.
•    In spite of the improving U.S. economic backdrop, mixed traffic at physical stores over Thanksgiving weekend suggest people are still not in a place financially to shop both online and then buy stuff in the store a couple days later.
•    Fear that mild temperatures will trigger irrational apparel promotions in the final week before Christmas.
•    Outages on websites such as Macy’s (M) and Victoria’s Secret due to a traffic onslaught hint at potential issues in the final weekend ahead of Christmas, which ultimately proves costly to a retailer. Macy’s site outage was probably why the stock traded down on Monday.

The media is still reporting stories as if visits to retail stores are the single-most important barometer of the holiday shopping season. OMG if store traffic is weak, that means physical stores remain a burden — so let’s scare the heck out of investors holding retail stocks. Listen, bottom line is the very strong digital sales performance is a nice sign on how the holiday shopping season will shake out. People are shopping more than last year. Period. I would be prepared to buy winning retailers on any prolonged weakness stemming from concern over how the holidays will ultimately pan out. Names such as Dick’s Sporting Goods (DKS) (which may have a home run on its hands with its new Field & Stream hunting concept) and Target (TGT) make sense on a pullback, while Sears, Gap (GPS) , and Abercrombie not so much (the losers).  [Source: TheStreet.com]

How retailers can protect themselves against cyber threats this holiday season

Both brick-and-mortar and e-commerce retailers are tempting targets for cyber criminals, especially during the busy holiday season. Retailers such as Target, Home Depot, Michael’s and Neiman Marcus have all been victims of cybercrime, exposing the personally identifiable information of hundreds of millions of private citizens in the aggregate and costing these businesses hundreds of millions of dollars collectively on incident investigation and correction, including customer notification of compromised information, public relations and crisis management, and Payment Card Industry Data Security Standards (PCI-DSS) fines, penalties and assessments. Whether it’s point-of-sale (POS) security issues, distributed denial-of-service (DDOS) attacks, inferior information technology infrastructure or lax information security procedures, breaches are all unique in one way or another. However, retailers at large all face the same risk factors, with varying degrees of severity.

According to a recent report issued by BDO USA, all of the retailers surveyed cite cybersecurity as a potential risk to their business, a significant increase from 55% in 2011 and 26% in 2007. This is not surprising, given that the POS system, not the stored data, is often the main target of hackers. In the Target attack, which occurred the day before Thanksgiving 2013, the malware was designed to attack a POS device’s random-access memory (RAM) when information decryption occurred, immediately stealing unencrypted data from memory.

The Europay, MasterCard and Visa (EMV) system, while an improvement from credit and debit card magnetic stripe technology, is also vulnerable. Although EMV chip-card technology reduces in-person credit card fraud, if improperly configured, it may still be vulnerable to RAM-scraping malware. Further, EMV is an anti-counterfeiting software, not a network security solution: As such, it does nothing to guard against card-not-present issues or e-commerce attacks.
With DDOS attacks, online retailers also face the possibility of having their sites shut down and unable to process daily transactions. Recently, the Mirai malware attack on Dyn, an internet infrastructure firm, shut down dozens of well-known sites including Twitter, Amazon, Spotify, PayPal and Netflix. While a concern, DDOS attacks arguably pose less of a threat to retailers, as cybercriminals only benefit by the continuous flow of transactions (i.e., personally identifiable information) run through POS machines. If there is no flow of information, then nothing can be stolen.

What should retailers do to mitigate losses?
Use the most up-to-date POS hardware and software. Merchants who do not have secure technology in place (like EMV) can now be held liable. To address these security issues, retailers need to adopt a multi-tiered approach for securing payment card transactions, which includes implementing end-to-end encryption and tokenization, a process that replaces sensitive credit card data with a unique placeholder, in conjunction with support for EMV.  Have a proactive cybersecurity strategy. Assume the digital systems already have been breached. Consider the insider as much of threat as the outsider, and convert the external problem into an internal problem to be solved. A robust and proactive cybersecurity strategy should include both a Written Information Security Program (a set of comprehensive guidelines and policies designed to safeguard all confidential and restricted data) and an Incident Response Plan (a set of written instructions for detecting, responding to and limiting the effects of an information security event).

Remember that there is a difference between information technology and information security. Don’t expect your IT admin to also be an expert in cybersecurity. Rather, hire a security analyst who is purely focused on cybersecurity safeguards. Hackers are always going to be a threat to retailers: The only way to stay protected or ahead is to constantly update and upgrade your IT infrastructure and cybersecurity procedures. Purchase a cyber liability policy. For those instances when your company’s IT and security safeguards are unable to prevent a network security breach, insurance can be a backstop and help mitigate potential losses. However, when purchasing a cyber liability policy, it is imperative to have policy language that is explicit in its coverage for risks like network business interruptions, cyber extortion and PCI fines, penalties and assessments, amongst other nuanced areas of coverage available. The insurance industry is constantly adapting to evolving cybercrime, and policies are unique based on each individual insurance carrier’s appetite for risk and experience in this arena. As retailers consider cybersecurity exposures on an annual basis, they should give thoughtful review to their existing risk transfer program to assess potential gaps in coverage in consultation with their insurance brokerage partners. [Source: Retail Dive]

The post Breaking News in the Industry: December 2, 2016 appeared first on LPM.

Bill Turner, LPC, has been a reader and contributor to Loss Prevention magazine (now LP Magazine) since its inception in 2001. Now, as the publication celebrates its 15-year anniversary, Turner looks back at the middle years of the publication in a feature article in the November-December 2016 issue. This sequel article to “Fifteen Years of Loss Prevention,” which appeared in the September-October issue, covers LP Magazine’s history from 2007-2011.

Turner inventories some of the top trends and major changes in the loss prevention industry as seen through the eyes of the magazine during those middle years. For example, organized retail crime (ORC) was again a hot topic. From the article:

“As we saw previously, organized retail crime has been the subject of numerous articles in the magazine. From the cover story by King Rogers in the very first issue through today, ORC continues to be a huge concern to most retailers. A recent 2016 statistic indicated that “professionals” were responsible for 3 percent of all shoplifting and 10 percent of all shoplifting dollar losses. I would bet that most retail loss prevention professionals who regularly deal with ORC would think those statistics are too low.

ORC, once again, made the very first cover of the second five years, the January–February issue of 2007. In that feature article, the first in a two-part series, John Talamo of Limited Brands gave a historical view of the subject. He also talked about ORC in specialty retail and outlined Limited Brands’ strategy to attack it. Talamo concluded his article in the March–April 2007 issue and discussed the training of Limited’s ORC team, investigation strategy and tactics, and partnerships with law enforcement.”

Other topics covered by the magazine during the middle years and reviewed in the article include crisis management, fraud, employee theft, loss prevention technology, and much more.

Check out “Fifteen Years of Loss Prevention, Part 2” to read the full article and learn more about the history of LP Magazine during 2007-2011. You can also visit the Table of Contents for the November-December 2016 issue or register for a free subscription to the magazine.

The post LP Magazine: A Look Back at the Middle Years appeared first on LPM.

Organized retail crime (ORC) is not a new challenge to the retail environment, but it is a criminal element that continues to grow and evolve at a rapid pace. With thieves and the supporting criminal market urgently seeking new and creative ways to pilfer goods and maximize their profits, it becomes increasingly important for retailers to keep pace. A big part of this involves keeping current with both the means and the methods of the professional theft enterprise.

In order to maximize profits, organized retail crime networks have long attempted to return stolen merchandise back to the retailer as a “no receipt” return. With many retailers previously providing cash back for returns under a designated dollar amount, this well-known criminal approach basically resulted in criminals selling back the stolen merchandise to the retailers for substantial profit.

Most retailers have since changed their return policies, and typically issue a gift card or store credit for the amount of the merchandise, including sales tax, for returns made without a receipt. However, this still offers the thief a lucrative opportunity for gift card fraud; instead of fencing the merchandise for 30 percent of its value on the streets or selling it on the secondhand market for 60-70 percent of its value, they can sell the gift card for on average 80 percent of its market value. Factoring in the sales tax portion of the return—which can bring an additional 5-10 percent in most states—the thief can be looking at an 85-90 percent return on the retail value of the stolen merchandise.

Online sales currently provide the best mechanism for thieves to sell these gift cards. With various e-commerce “buy it now” options that enable a quick turnover of a gift card, eBay has been a popular auction site for the sale of these cards. However, the cost of auction listings and Paypal fees eat into profits. Furthermore, with retail loss prevention teams now working closely with eBay investigators, the thief may also risk exposure to the criminal paper trail and the increased potential for detection and prosecution.

As a result, Craigslist has become a preferred option for the sale of these gift cards—and potential gift card fraud. This free classifieds site is popular in the United States, with most transactions completed with an in-person meeting that is almost always cash-based and untraceable. The seller can quickly eliminate the paper trail by deleting the Craigslist ad once the gift card is sold.

Below is an example of a $3100 department store credit being advertised on Craigslist for $2570. While the sale of gift cards at these highly discounted rates is not in itself proof of criminal intent, the brazen solicitation of high-valued store credits such as these only further underscores the need to raise awareness of the magnitude and severity with which the secondhand gift card marketplace has grown, and the need for retailers to monitor and investigate these listings on Craigslist and similar online classifieds sites for gift card fraud.

In order to validate the potential impact of this secondary selling market, we’ve compiled some statistics to support these concerns. While definitive conclusions cannot be made on the origin of these cards and/or the intentions of the seller based simply on the available data, there are some clear trends that warrant our attention.

Data Analysis

Figure 1

The statistics documented in this article are taken from the following data analysis:

1. All Craigslist “For Sale” ads from Jan. 20 – Oct. 30, 2014 throughout the United States that contained the keywords “gift card,” “store credit,” or “prepaid debit card.” About 95,000 ads were pulled that matched this criteria.

2. Obvious duplicates (ads with the same title, location, and price) were eliminated and irrelevant content (offers to purchase gift cards, gift cards in combination with merchandise, bartering offers, gift-card-making machines) was cleaned up. About 65,500 ads remained after this cleanup effort, which is labeled Part I data.

3. The retailer name, asking price, gift card value, location and phone number were extracted from these ads. Gift cards that did not contain both a value and an asking price were eliminated. About 33,000 ads remained at this stage of the analysis, which is labeled Part II data.

The chances of a store credit being legitimately obtained typically decrease the higher the value of the gift card. However, we must also consider the average purchase price of merchandise in some retailers is lower than the prices at brand-name boutique stores, so comparisons can’t be made unless the retailers are of the same industry or class. That is why gift card values need to be presented in a segmented manner.

Overall, the secondhand gift card marketplace on Craigslist totaled about $7 million over the nine-month period and did not include a potential spike during the busy November and December shopping periods. Figure 1 indicates the total values of the gift cards advertised for the top 100 national retailers.

20,453 of the 59,578 ads where the store credit’s value was explicitly mentioned were for gift cards that are not considered national retailers, and were eliminated from this analysis.

From the Part I data, Figure 2 indicates the top 15 industries appearing in the ads for gift cards and store credits. Ads were categorized by gift card value (1) all amounts, (2) values of $100 and up, (3) values of $500 and up, and finally (4) values of $1000 and up. The retailers that were ranked high in all dollar classes were home improvement and electronics. Some retailers that contained high volume of gift cards below $100 had very few at high volumes, such as specialty apparel and restaurants. Some retailers that were low volume below $100 are high volume at $500 and above, such as jewelry and department stores.

Figure 2

Figure 3 indicates the top metropolitan areas for gift card ads. Generally speaking, the ranking of each metropolitan area on Craigslist correlates with population rankings, except for Seattle/Tacoma, which is ranked #21 in population, yet is ranked #4 on gift cards.

Figure 3

Furthermore, the state-wise geographic breakdown generally correlates with population rankings. The largest anomalies of the top 10 states indicated are Oregon (rank #27 in population), Washington (rank #13 in population) and Arizona (rank #15 in population).

Figure 4

The Part II data was used as the basis for Figure 5, which indicates the gift card price as a percentage of the value. Sometimes the ads contained bogus prices on the listing title, like $1, to help draw in the customer, but when you look at the details of the ad, their asking price is much higher. Any ad where the asking price in the title was less than 10 percent of the value or above 100 percent of the gift card was thrown out.

Figure 5

The peak in the distribution is at 80 percent, with a longer downward tail towards 10 percent. It is unclear to the author whether a low price / value implies that the gift card was obtained via some type of fraud, or whether a legitimate seller is simply desperate to liquidate his/her gift card. If the gift card’s price is below 50 percent of its value, that corresponds to the lowest 3 percent of this distribution.

If this is further combined with a high value of $500 or higher, it also could turn into a potential store robbery situation. Many holdups or robberies are triggered by a Craigslist ad where the seller is offering something too good to be true, and where the seller agrees to meet the buyer in a remote location . In many of these gift card ads, the seller offers to meet the buyer at the retailer in question to check the value, or to pay for the merchandise the buyer picks directly with the gift card.

Active Sellers

Repeat sellers of gift cards would also have a higher correlation to illegally obtained gift cards or gift card fraud. About 80 percent of the Craigslist ads are single ads for a single gift card, while the remaining 20 percent of Craigslist sellers have multiple ads for potentially multiple gift cards. Due to the potentially broad nature of the Craigslist postings, it is difficult to determine whether a seller is posting a duplicate ad, a second gift card is available, or a single ad with multiple gift cards. Therefore some margin of error is expected with this particular analysis.

Figure 6

Among the sellers with fifteen or more multiple gift card offerings, only two of them were offering gift cards from one retailer exclusively, and one of them was offering gift cards from the same group of companies. The majority were offering from multiple retailers, which eliminates the likelihood of an internal theft issue.

Conclusions

Based upon the findings of our study, it is clearly worthwhile for retailers and their loss prevention staff to monitor and review the second-hand gift card online market such as those found on Craigslist and similar sites in order to mitigate the opportunity for thieves to exploit the “return with no receipt” method of liquidation.

Big-box stores are particularly exposed with seven of the top ten retailers in gift card value sold on Craigslist today. However, a broad spectrum of retailers are represented as part of our statistical pool, whether based on the type of retailer, the size of the stores, the products sold, and other distinguishable characteristics.

The average selling price of a gift card found on the Craigslist classified listings is typically 80 percent of its value. California is the biggest single sales state by value and by volume of ads, being three times higher than for Texas, which has the second-highest numbers.

The use of gift cards has opened many opportunities for retailers to expand sales options, attract additional business, and serve the needs of their customers. However, this has also opened up doors to store card fraud. As retailers strive to explore new and better ways to serve the customer, it’s important that we always keep our eyes open to the potential opportunities, and use our available tools and technology to protect our goods, our customers, and our profitability.

This article was originally published in 2014 and was updated December 8, 2016.

1. White paper by the GAO http://www.gao.gov/products/GAO-11-675
2. US city and state population data courtesy of Wikipedia.
3. Online news www.kctv5.com/story/26038628/two-people-injured-in-kcmo-shooting
4. Online news www.dailyherald.com/article/20140924/news/140929271

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Loss prevention and retail industry professionals have a responsibility to stay informed about the latest retail theft statistics. This article provides a snapshot of what retailers currently face when it comes to loss and theft.

Inventory Shrink

Inventory shrinkage refers to the difference between the merchandise a retailer shows in its records and the actual physical count of merchandise on hand. This difference can be attributed to operational errors, internal loss, and/or external loss. Shrink is an inevitability in the retail environment, but loss caused by retail theft is something LP and AP professionals work hard to prevent.

The 2016 National Retail Security Survey (NRSS), which was released from the National Retail Federation in the middle of last year, reports that retailers say inventory shrink accounted for 1.38 percent of sales, or $45.2 billion, in 2015. The NRSS is the result of a collaborative effort with the University of Florida and has been overseen by Dr. Richard Hollinger for 25 years,

Shoplifters and Organized Retail Crime

Shoplifting and organized retail crime are major contributors to the external loss component of inventory shrink. The NRSS indicates that shoplifting accounted for 39 percent of the reported shrink in 2015—by far the largest contributing factor to retail loss in the survey. The average loss was about $377 per shoplifting incident, up from nearly $60 in 2014.

Employee Theft

Employee theft, also known as internal theft, occurs when employees steal from the organization where they are employed. Retailers that participated in the 2016 NRSS say that employee/internal theft amounted to 35.8 percent of inventory shrink in 2015.

Other Retail Theft Statistics

According to the Jack L. Hayes International 28th Annual Retail Theft Survey, more than 1.2 million shoplifters and dishonest employees were apprehended in 2015 by 25 major retailers. These shoplifter apprehensions showed an increase of 2.0 percent over 2014, while dishonest employee apprehensions increased more than 1.0 percent over 2014. More than $200 million was recovered from the thieves – up nearly 1.2 percent from 2014.

This article was updated December 13, 2016. 

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One quarter of ransomware attacks hitting U.S. targets

Ransomware attacks continue to rise, and U.S. computer users are getting hit the most according to an analysis released by security firm Malwarebytes. The company analyzed data sent from its software running on customers systems between June 1 and October 15, finding hundreds of thousands of ransomware attacks. More than 26 percent of attacks targeted users in the United States, compared to less than 9 percent targeting German users and about 4 percent targeting people in France, the No. 2 and No. 3 most popular targets.

“Throughout the whole year, ransomware has been the dominant problem. It has just kept growing,” says Adam Kujawa, director of malware intelligence for Malwarebytes, adding that that 2016 is undoubtedly the year when ransomware took off, becoming the most significant Internet threat.

Other companies’ research agrees. In its year-end report, security firm Kaspersky Lab found 62 new families of ransomware had hit the internet in 2016, leading to roughly double the number of incidents per user. At the beginning of the year, Kaspersky’s user population encountered ransomware once every 20 seconds, and by the end of the year, that had dropped to once every 10 seconds. There are also signs that link several families of ransomware to Russia.

Kaspersky found that the number of modifications to ransomware variants increased by more than 11-fold in 2016, as the malware authors tried to stay ahead of security firms’ software. In addition, the number of copycats increased as well. Because ransomware is difficult to create properly, knock-off programs—also known as ‘skiddie’ ransomware—are less likely to be able to decrypt a victim’s files, Kaspersky said.

“As the popularity continues to rise and a lesser grade of criminal decides to enter the space, we are likely to encounter more and more ‘ransomware’ that lacks the quality assurance or general coding capability to actually uphold this promise,” the company said. “We expect ‘skiddie’ ransomware to lock away files or system access or simply delete the files, trick the victim into paying the ransom and provide nothing in return.” [Source: eWeek]

Six disruptive digital trends for 2017

Retailers will engage new channels, “geek up” their stores, and use technology to refine inventory management and anticipate customer desires in 2017. That’s according to Software AG, which released a list of six disruptive digital trends retailers must address in 2017. Here’s a recap:

1. New tribes of the Amazon-ization: There will be further “Amazonization” of retail, with new market entrants – as well as existing retailers – finding new ways to sell, fulfill and deliver products to eager, often impatient, consumers.

2. “Conversational” commerce: Retailers will quickly adapt and connect into new channels to engage with customers, using avenues including “conversational commerce” – Amazon Echo or Bots in Facebook Messenger.

3. Real-time inventory: Real-time inventory will be a reality, as more retailers realize that a rip-and-replace program for core merchandising, warehouse and store systems is not the best – or the quickest – way forward. The smartest retailers will look for other approaches like using in-memory caching combined with high speed messaging in order to provide real-time inventory levels across every location, channel, store and shipment.

4. Stores “geek up” to attract customers: Customers want to see techie gadgets when they go into brick-and-mortar stores, and retailers are going to be adding cool things like robots that give them directions, kiosks for in-store ordering, and magic mirrors for trying on clothes.

5. IoT in the kitchen: IoT will start to creep into your kitchens as devices like Amazon Echo, Hiku and others allow consumers to add things to their shopping lists. Conversational commerce will be a precursor to Artificial Intelligence and then “cognitive commerce,” which will appear over the next few years.

6. Retail as big brother: The arrival of “anticipatory customer experience” will allow retailers to manage customer expectations earlier and earlier in the sales process. This, in turn, can help retailers solidify an emotional attachment to their brand, offering customers what they want before they know they want it.

“As retailers get to grips with real-time inventory, geek up their stores to attract new customers and begin to predict what customers want early in the sales cycle, they will have a much easier time taking advantage of the ‘retail moment,’” said Oliver Guy, global industry director for retail, Software AG. “All of this entails being able to orchestrate across systems in order to be able to fulfill the customer promise.” [Source: Chain Store Age]

More than 160 people arrested for organized retail crime in Tennessee

More than 160 people were arrested by the Knox County, Tennessee Sheriff’s Office Organized Retail Crime Task Force since November 21. The task force has arrested 167 people, including 12 minors. Investigators have recovered $30,893.86 in merchandise.

Three men from out-of-state were arrested for counterfeit credit card use. Investigators say William B. Jones had 38 credit cards. Jamar Warner had 17 credit cards in his name, according to the report. Patrick Woodstock had 18 credit cards in his name, according to investigators. The sheriff’s office says 35 restaurant gift cards were found with a total value of $1,750. The cards were bought with counterfeit credit cards.The three men are being held at the Knox County Jail.

Officer Joe Sulewski has been on the task force for four years. He says it gets busier each season. He spends his shift dressed in plain clothes, looking for shoplifters. Often when officers arrest people for shoplifting they also find drug paraphernalia, like needles and spoons with drug residue. “Where you find a lot of theft, you’ll find some drug activity too. They use that to support their habit,” Sulewski said.

The task force was created in 2011 and focuses on shoplifting, theft, car burglaries, car thefts and more criminal activities around retail areas. [Source: ABC News Knoxville]

LP Worldwide: More than 120 arrested during ‘Operation Lightfingers’

Police have arrested more than 120 people during a shoplifting crackdown across Sydney, Australia last week, NSW Police say. ‘Operation Lightfingers,’ comprising officers from the Redfern Region Enforcement Squad with assistance from Eastern Suburbs and Sydney City Local Area Commands, was launched on Tuesday last week (6 December 2016), and concluded on Saturday. The operation targeted shoplifting offences throughout a number of major retail outlets across the Sydney CBD, Surry Hills, Waterloo, Zetland, and Bondi Junction.

Police arrested a total of 123 people during the five-day operation, who were charged with 129 offences including larceny, stealing, and fraud. Over the course of the operation, police also recovered more than $11,200 worth of stolen goods.

Redfern Region Enforcement Squad Commander, Detective Acting Inspector Matthew Crematy, said the festive season generally sees an increase in customers and can therefore create opportunities for shoplifters. “Christmas shopping means more customers in stores so more work for staff members, and a general influx of foot traffic through major shopping precincts. These factors combined can often be seen as an opportunistic time for potential shoplifters to target major retailers.

“Operation Lightfingers is not confined to the holiday season however; we work closely with retail staff through the year to target thieves and send a clear message that these types of offences will not be tolerated. We also work with store-owners on crime prevention strategies and we continue to see improvements in surveillance technologies that can act as an effective deterrent against would-be shoplifters. Having said that, retail theft continues to cost the industry billions of dollars each year, which is why we remain committed to cracking down on those who attempt to take goods without paying for them,” Crematy said. [Source: Mirage News]

Tractor-trailer with $500k worth of Coach bags goes missing from New Jersey warehouse

Someone stole a tractor-trailer containing $500,000 worth of Coach bags from a distribution warehouse in New Jersey Friday, authorities say. Police say they got a call about the theft at SalSon Logistics in Newark shortly before 8:30 a.m. Arriving officers were told the stolen commercial trailer contained four pallets of the luxury women’s purses.

An investigation is ongoing. A Coach representative told CNBC they had no information on the incident. [Source: NBC News New York]

The Road to Eliminating Cargo Theft

Cargo theft in the United States continues to create challenges for our nation’s supply chain. No one is immune to the impact of cargo theft. Although insurance companies carry a majority of the risk, we all stand to lose when cargo is removed from legitimate supply chains.

So how can you mitigate cargo theft? In one word “preparedness.” It’s imperative to have documented prevention protocols in place. It is all about education and awareness. Here are some best practices to protect your freight and assets from being stolen:

• Notify dispatchers via text, email, or phone if you plan on stopping.
• Pre-plan your stops prior to departure from the shipper.
• Get it all done in advance: fuel, shower, eat, and rest prior to loading.
• Even if you did a thorough pre-trip inspection earlier in the day, always do a walk-around when you stop. Give your truck and trailer a visual inspection of tires, brakes, air line, etc. Also—always check all trailer doors when you stop and prior to departing.
• Always drive a minimum of 250 miles after accepting a load before stopping.
• Never discuss your destination, type of cargo, or any personal information on the CB radio or at a truck stop.
• If you must stop, use reputable truck stops or a secured parking area.
• When you park at a truck stop, be aware of anyone who seems to be loitering—that person could be a criminal waiting for you to leave your vehicle unattended.
• If you must eat and/or shower with a loaded trailer, ensure that the rear doors are parked against a fixed object—fence, light pole, etc.—to eliminate the opportunity for theft.

Cargo security is everyone’s responsibility. Keep your guard up at all times and do not be lured into a false sense of security. Your first theft could be your last! [Source: The Road]

LP Worldwide: Fake goods in £1m haul were destined for streets of Wales

Thousands of items of fake electrical goods, clothing and cosmetics were among a haul seized by authorities that were likely to have ended up being sold in Swansea, Wales. Swansea Council’s trading standards department was just one of the agencies involved in a joint operation, which saw counterfeit products worth £1 million seized when police pounced on a convoy 12 of vehicles. Working with West Midlands Police and others, officers found six of the vehicles seized during the raid crammed full with counterfeit products including Kylie Jenner cosmetics, Ugg boots, GHD hair straighteners and fake MAC makeup sets.

The council became involved after investigating complaints locally from consumers who had purchased goods via social media sites including Facebook and Instagram. Mark Child, Swansea Council’s cabinet member for wellbeing & healthy city, said: “We’ve seen an increase in the sale of counterfeit goods across the country. Social media is being used as a platform to sell these products. All of these counterfeit goods are poorly constructed and have not been put through the rigorous safety tests that genuine products are subject to. This means consumers are put at risk, especially where electrical products are concerned.”

The raid is the latest phase of Operation Jasper, a long running campaign, co-ordinated by the National Markets Group and trading standards. The aims of the raid are to disrupt the flow of cheap, dangerous, counterfeit goods by gangs who supply rogue traders at Bristol Fruit market, as well as Facebook and Instagram sellers who get them from the market, and sell them on to members of the public. [Source: AJC.com]

The post Breaking News in the Industry: December 13, 2016 appeared first on LPM.

Here’s how one shoplifter assesses risk. “First things first—you want to know if they got what you want. The second factor is the risk involvement. The risk involvement will be security times cameras times employees times space times [other] customers. Those are the five factors you’re going to have. Why? Because all of them conflict (sic) with each other to catch you.”

The quote above is not fictional. It is an actual quote from a seasoned shoplifter, and it indicates clearly the type of thought process shoplifters and organized retail crime (ORC) gangs use when they enter a store. Like anyone else, shoplifters are reasonable people who usually assess the pros and cons of a situation before deciding to take action. For a shoplifting offender, this process may occur in a matter of seconds—the length of time it takes to walk into a store, scan the space, and judge its desirability as a theft target. The offender weighs reward/opportunity against risk, and then decides whether or not to steal.

The key for retailers and loss prevention managers, then, is to convey a strong message of personal risk of detection and/or theft difficulty to shoplifters and other retail thieves, without discouraging legitimate customers. It’s a tricky balance to strike, particularly when so little research exists on what exactly shoplifters consider risky.

Fortunately, growing retail industry research is shedding light on this subject, suggesting new ways to affect the psychology of the shoplifter, without turning the store into Fort Knox. This article reviews some strategies to help create a store environment that deters shoplifting and boosts sales, so your company can “design out crime.”

Shoplifter Behavior and Environment

Understanding how environmental conditions shape human behavior is not new, especially in the retail industry. For centuries, store owners have manipulated the selling floor in order to affect people, usually the consumer.

Humans move through places and spaces partly based on physical features. For example, barriers block access or force movements in a certain direction. Or, open areas allow others to see what’s taking place.

People entering places interact with the space, and their perceptions and actions are shaped by their experience. Positioning items at reachable heights, placing merchandise in highly visible parts of the store, using alluring product displays to attract business…these are attempts to lure, excite, and hold the shopper to increase sales.

Today, hundreds of marketing studies provide retailers with ever more ways to create an environment that increases sales, from the subtle affects of lighting and fixture placement to the not-so-subtle effects of flashy colors, large signs, and other bells and whistles. Kmart’s famous “blue light” marketing initiative, in which a flashing blue light at a shelf alerts customers to a sale, is a notable example.

Other retailers also include places for shoppers to rest and relax, eat, or read magazines, all of which lead to happy customers, longer store visits, and, hopefully, repeat business.

Design and Crime

No one questions the store interior’s ability to either help or hurt sales and profitability. However, despite how savvy retailers are in using the environment to shape customer psychology, few use the same strategy to shape shoplifter psychology. Shoplifters enter into and see the same space as customers. In fact, many are one and the same. Yet little consideration is given to what the offender sees.

Crimes such as shoplifting and organized retail crime are too often addressed after the fact, relying solely on CCTV, EAS, and extra security staff. These measures are costly and difficult to buy and consistently operate, and their effectiveness is hindered if the store itself is not designed to support their operating process.

Just as with sales and customer satisfaction, retail store design can either help or hinder LP. It can enhance loss prevention technology and facilitate safety through aisles planned to coincide with camera angles, and shelves designed to maximize employee visibility. Alternatively, it can create hiding spots for shoplifters with poorly monitored exits and dark unprotected aisles and corners.

Fortunately, the tactics involved in designing and maintaining a secure retail interior are rarely offensive to customers. In fact, most of the strategies actually help sales and customer service, leading to happier customers and more sales, in addition to deterring shoplifters and reducing losses.

Before exploring how retail design can impact loss levels, it’s important to understand how this approach is grounded in good theories and decades of sound, thorough research on the environment-crime connection.

The theories behind the “design against crime” approach are derived from scores of studies on crime reduction in areas such as street crime, residential burglary, and crime in public housing. Because such theories are concerned with how crime occurs in certain places, they’re called place-based crime prevention. Design elements and cues like barriers or low and staggered shelving “channelize” movement, remind people of possible risks, prompt good behaviors, excite legitimate buyers, or help create concern or fear in shoplifters and other would-be criminals.

The majority of these “built environment” theories have focused on outdoor spaces and urban planning. While such studies helped affect safety in convenience stores, parking lots, and bus stops, they haven’t formally addressed in-store theft reduction. In fact, one of the main reasons so few stores are designed to maximize security is simply because fact-based theory on retail design strategies is not readily available. Retail interior designers are taught how to design spaces that excite or help sell, not spaces that also protect.

Only recently has research—much of it by the Loss Prevention Research Council (LPRC) and the University of Florida—brought place-based crime theories indoors to explore how they can help the retail environment. Armed with this new set of information, store designers, managers, and loss prevention professionals can work together to create and maintain store environments that promote sales, while also minimizing theft opportunities.

Theory to Action

The big idea behind place-based crime prevention is fairly simple—when a criminal enters a setting, that setting helps determine his/her behavior. Humans take in and react to built and psycho-social environments. So, by altering the setting in certain ways, you can alter the criminal’s actions. Three main theories relevant to retail design are defined below.

Rational Choice Theory. This criminology theory explains how shoplifters usually act as quasi-rational individuals who weigh the relative risks and rewards associated with a crime before deciding to commit it. For example, the shoplifter quoted previously, wants to steal teeth whitening strips, but decides not to once he sees they’re stored behind the counter, or otherwise tough to take in bulk. Rational choice theory would explain how his choice not to shoplift was based on his assessment of the risk associated with jumping behind the counter and potentially fighting off employees in order to grab teeth color enhancers. The theory predicts physical and cultural barriers that make theft difficult will dissuade most shoplifters.

The Theft Triangle. The triangle theory helps retailers operationalize the rational choice concept by describing what offenders consider before acting, including

• A perceived motive or need,
• Perceived access/availability, and
• A low perception of personal risk.

According to the theft triangle, offenders usually believe all or some of the three components are favorable to them before stealing. Consider Joey and the whitening strips again in terms of these three components:

1. Perceived motive—The shoplifter needs fast cash to support a drug habit. He knows he can readily convert the teeth bleaching strips to cash through a nearby fence, so his motive is in place.

2. Perceived access/availability—The shoplifter perceives availability of the item insofar as the teeth strips are in the store, but his access is limited by their position behind the counter, so this component is not fully in place.

3. Low perception of personal risk—In this example, because the strips are so closely guarded by the checkout staff at the store, the shoplifter’s perception of risk is high. Therefore, he decides not to steal.

However, change the environmental circumstances in this example, and the outcome could be quite different. Perhaps the whitening strips are available right in the aisle, such that the shoplifter would perceive them as both available and accessible. Furthermore, imagine the aisle is located far from the eyes of any employee or LP staff member, and the shelves in the aisle are high enough to block anyone from seeing him. Finally, imagine the shoplifter looks up to the ceiling and sees no or non-credible CCTV coverage. All of these factors reduce the shoplifters’s perception of risk. In this scenario, all three elements of the theft triangle are in place, so the shoplifter steals the tooth strips.

CPTED. Crime Prevention through Environmental Design (CPTED) further builds on the theft triangle by specifically addressing the built environment. In the example of the strips, we see how manipulation of just a few key “cues” in the environment, like employees, product placement, visibility, and cameras, can impact a shoplifter’s psychology, assessment of opportunity and risk, and decision to steal.

However, little empirical research has examined how CPTED can help retail LP through store design. Part of the problem has been a lack of information about just how shoplifters perceive the retail environment, and which elements within it best convey that all-important message of high risk, low opportunity. Retailers and LP managers need to know how to increase shoplifters’ perception of risk in the store, and minimize their perception of theft opportunity.

Past Research on Professional Shoplifters

Fortunately, research conducted by the University of Florida’s Loss Prevention Research Team (LPRT) and the LPRC has focused on this very issue. One such project involved an analysis of over twenty in-depth, structured interviews with active professional shoplifters. The research team identified the specific elements of a store interior that shoplifters consider most risky when deciding whether or not to steal. This research and others has led to the development of a set of “best practice” suggestions for retailers and loss prevention staff aiming to reduce crime through store design.

Improve Natural Surveillance. Natural surveillance is a CPTED technique referring to the ability for everyday users, such as shoppers, vendors, and employees, to visually monitor the store with no extra effort. The term natural simply means these measures are integrated into the store’s design. For instance, long, wide aisles placed in direct eyesight of the employees in a checkout area promotes natural surveillance. This is opposed to formal surveillance like CCTV, which will be discussed later.

One of the biggest concerns shoplifters cited in this study was they do not like being seen or spotted. By increasing the “eyes on the stuff” that employees, shoppers, and casual users provide, a shoplifter’s sense of risk is also increased dramatically.

To promote natural surveillance, loss prevention managers and retailers should aim to improve “lines of sight” throughout the store, making sure employees can see as much of the store as possible from where they usually work. Employee positioning should be coordinated with high-theft areas of the store, either by moving high-loss items to areas where employees can easily see them, or by setting up an employee in a vulnerable part of the store. The mere visual presence of employees and the knowledge that these employees can see what’s going on is often enough to give a shoplifter the feeling of “being watched”—an important deterrent for shoplifting.

The concept of “being watched” relative to theft deterrence was indicated in another recent study. In this study, people in an office were sold bagels on the honor system, where they put money in a little container if they took a bagel. The study found that people were more likely to pay for their bagels when an image of two eyes was posted above the bagels. In this case, just a picture seemed to change behavior, which suggests how effective the very idea of “being watched” can be.

“If somebody’s watching, I’ll go over and buy my popcorn or whatever and leave.”

Lowered shelf and fixture heights–less than 60 inches tall, for instance–improve natural surveillance, as do wide, clear aisles, strategic placement of mirrors, and ample lighting.

Another CPTED strategy, territoriality, also plays into natural surveillance. Territoriality is based on the idea people are more likely to guard a space when it has some clear boundary definition. In retail design, these boundaries are marked by changes in flooring, ceiling height, lighting, and color and are often used to distinguish one area of the store from another. However, these visual boundaries also subtly assist employees in protecting spaces, since the employee is able to “see” their territory and (knowingly or not) guard that particular space against crime.

Natural surveillance has the added benefit of improving customer service, since an ability to see more store activity also provides employees the opportunity to spot and service customers in need or note an empty product area.

“A blind spot…like where the cameras can’t see you…[the local Walmart] has a blind spot actually in the filing cabinets. They also have a blind spot in their hunting goods. I can see a blind spot and there’s rarely anybody walking through there…Like, it’s not full coverage of the store.”

Optimize CCTV. Data indicate carefully deployed and used CCTV is one of the more effective anti-theft technologies. But what many do not realize is how closely CCTV and store layout need to be integrated in order for the system to work at maximum effectiveness. This means eliminating blind spots or dead zones, which are those areas unmonitored by staff or cameras.

Obviously, all high-risk products can’t be prominently displayed. One single blind spot can put an entire store at risk. Offenders often learn about hiding spots through word of mouth and already know to use that area to conceal or tamper with products. To get the most out of CCTV, retailers and LP managers must make sure coverage is complete, and not hindered by glare, high fixtures, signs, or other poorly-placed objects blocking the camera views.

“A uniform is a good deterrent. Like if I was walking in a store and I had stolen stuff and I come back to an exit and I see like four uniform guys that weren’t there before, I’ll dump the stuff instantly.”

Support Store and LP Employee Efforts. Store and LP staff often know a store’s layout better than anyone else—the “hot spots,” the hiding spots, and the easy getaways. Therefore, store layout and design should be geared to support both selling and asset protection efforts to the fullest extent possible.

Territoriality and boundary definition will help staff guard particular areas. The entry/exit point is ground zero for shoplifting offenders, and should be designed to optimize surveillance and guardianship efforts. You may consider prominently positioning uniformed guards or monitors in high-risk stores. Several interviewed shoplifters in the LPRT study [one quoted above] noted they did not steal around uniformed personnel.

“You know that what you’re doing is dangerous and anything can happen, so you want to know exactly what you want. The quicker you’re in and out of the store, the less you’re seen…that’s if they’re watching you.”

Control Exit Access and Provide Exit Screening. Easy exit after a theft is a major factor in any offender’s assessment of a store’s opportunity and risk. Exits that enable a speedy getaway appeal to would-be shoplifters, while complicated, well-guarded exits are perceived as risky.

Several exit design elements convey “danger” to offenders. Indirect access to the exit doors is better than a wide, clear aisle straight to the outside. This makes a quick walk or full run out the door more difficult. Many stores “complicate” the exit with small displays of low-cost impulse items or cue lines. Other stores use designated exit doors so people cannot go out the entry doors. Some very high-risk stores install rails at the exit point making users walk through channels before leaving the space. All of these design strategies slow down the actual exit process, making it easier to apprehend criminals, and making the act of shoplifting seem riskier to the offender.

Exit screening is another way to deter shoplifters. The physical presence of a store “greeter” or receipt checker is a red flag to a potential offender. Screening is one more obstacle the shoplifter must overcome in order to escape. However, design plays a crucial role in the effectiveness of an exit screener. If it’s possible to leave the store through an exit far from an employee, the deterrent effect is reduced. Checkout aisles and exit doors should be designed with the idea of an exit screener in mind, funneling users to slowly pass a screener before reaching the exit.

“Sometimes you go into a place and you just don’t have the accessibility to some of the products you want because they’re behind the counters or locked up. That’s a big thing. I mean, at that point you walk out and go someplace else. Deterrents work. They do.”

Harden Targets. Another deterrent shoplifters frequently cite is what’s referred to as hardened targets, meaning items whose accessibility is limited due to such devices as cords, cables, and glass cases. Shoplifters almost unanimously agree that locked items are rarely worth the theft effort.

However, operations and LP staff know that locked items are also harder to sell. Therefore, it is imperative target hardening be limited, usually for the highest-priced, highest-theft items. The task of designing devices that both harden products while providing easy access to customers is an ongoing priority of many retailers and their vendor partners.

Keep in mind target hardening exists on multiple levels:

• Store Level—Each store will have areas that are “safer” or more protected/visible, than others. These are the areas where the highest loss items should be positioned; away from immediate access to exits, in direct line of sight of employees, and covered by obvious CCTV
• Fixture Level I—Target hardening on the fixture level is not always about impenetrable glass cases. Some retailers have developed attractive, alluring fixtures that serve the dual function of highlighting and displaying an item while also attaching it firmly to the store. Design plays a large role in how the customer reacts to the hardened target.
• Fixture Level II—Designers and LP staff should ensure the method of securing the item is flexible and ergonomic, allowing legitimate customers to touch, feel, and test and item while it is still attached to the fixture. These fixtures should also be planned in conjunction with employee stationing or customer service, adding another layer of product protection while also assisting with customer service.
• Fixture Level III—Theft triangle theory predicts fixtures that make loud noises, force two-handed selection, and slow selection rates will deter many thieves.

Future Research

From an empirical research standpoint, retailers and researchers are just getting started. Future studies need to measure the effects of fixture height, aisle width, manning and visibility levels, and lighting and signage variations in conjunction with experiments, larger offender samples, lab testing, and statistical modeling to provide retailers with investment-grade data.

Deterring crime via secure store design is not a turnkey solution. Each store and even department within a store is different and poses a unique set of LP challenges. With the help of research, asset protection design principles should be incorporated at the most preliminary stages of store design and carried through construction and management of the store.

In addition, store design should evolve with the store location’s evolving needs. Surrounding crime risk varies as does a store’s vulnerability to that risk. In essence, to really work, asset protection must be treated as the priority it is, since keeping key merchandise available for purchase is critical to the store’s success.

This article was first published in 2007 and updated December 13, 2016.

The post How Store Environments Affect Shoplifters and Organized Retail Crime appeared first on LPM.

Yahoo says one billion accounts exposed in newly discovered security breach

Yahoo Inc. warned on Wednesday that it had uncovered yet another massive cyber attack, saying data from more than 1 billion user accounts was compromised in August 2013, making it the largest breach in history.

The number of affected accounts was double the number implicated in a 2014 breach that the internet company disclosed in September and blamed on hackers working on behalf of a government. News of that attack, which affected at least 500 million accounts, prompted Verizon Communication Inc to say in October that it might withdraw from an agreement to buy Yahoo’s core internet business for $4.83 billion. Following the latest disclosure, Verizon said, “We will review the impact of this new development before reaching any final conclusions.”

Yahoo also said Wednesday that it believes hackers responsible for the previous breach had also accessed the company’s proprietary code to learn how to forge “cookies” that would allow hackers to access an account without a password.

“Yahoo badly screwed up,” said Bruce Schneier, a cryptologist and one of the world’s most respected security experts. “They weren’t taking security seriously and that’s now very clear. I would have trouble trusting Yahoo going forward.”

Yahoo was tentative in its description of new problems, saying the incident was “likely” distinct from the one it reported in September and that stolen information “may have included” names, e-mail addresses, telephone numbers, dates of birth, hashed passwords and, in some cases, encrypted or unencrypted security questions and answers. It said it had not yet identified the intrusion that led to the massive data theft and noted that payment-card data and bank account information were not stored in the system the company believes was affected. [Source: Reuters]

Organized retail crime on the rise

For the first time in the 12-year history of the National Retail Federation’s organized retail crime survey, every responding retail company — 59 in total — said it had been a victim of organized retail crime in the past 12 months. In addition, 83 percent of respondents, all top-level loss prevention executives, reported that ORC activity had increased in the past 12 months: 44 percent reported a “significant increase” while 39 percent reported a “slight increase.”

The survey also uncovered a trend of ORC criminals and shoplifters becoming “more aggressive and brazen;” 97 percent reported an increase in the levels of aggression, and one in six felt the level of aggression was much higher than the previous year.

“Shoplifters are more confrontational with our LP officers,” one respondent said. “Even if we do catch them, it’s just a slap on the wrist. Short of pulling a gun on our LP team, they will always be cited and released by the police. Even if they attack our team, they are not charged with a battery or robbery anymore. It’s all just considered part of theft crime.”

The average loss attributable to ORC was $700,259 per $1 billion in retail sales, up significantly from 2015’s average of $453,940. Even though the survey found that the average dollar amount of retail personnel dedicated to combating ORC reached an all-time high of $545,694, more than half of responding companies had “not allocated additional resources in personnel or technology” in the past 12 months.

Nearly 80 percent of respondents said a federal law is needed to combat ORC, with stronger penalties acting as a deterrent. A federal law would remove jurisdictional issues in what increasingly is becoming an interstate crime. [Source: The National Retail Federation]

Retail sales inch up in November

The start of the holiday shopping season did not bring with it a big jump in retail sales. Retail sales, excluding automobiles, gasoline stations and restaurants, increased 0.1% in November, less than many analysts had expected according to a National Retail Federation report. The gain came on top of a strong October, and that retail sales were up 5% year-over year. November’s results indicate that retail sales for the holiday season will meet or exceed its holiday forecast, which anticipates an increase of 3.6% over last year’s level for November and December.

In other NRF findings:

• Online and other non-store sales increased 0.1% seasonally adjusted over the previous month and increased 15.3% unadjusted year-over-year.
• Sales at clothing and accessories stores were flat from the previous month and increased 1.9% unadjusted year-over-year.
• Sales at general merchandise stores increased 0.1% seasonally adjusted over the previous month and decreased 1.4% year-over-year.
• Electronics and appliances stores’ sales increased 0.1% seasonally adjusted over the previous month and decreased 2.5% unadjusted year-over-year.
• Furniture and home furnishings stores’ sales decreased 0.7% seasonally adjusted over the previous month and decreased 7.2% unadjusted year-over-year.
• Sales at building materials and supplies stores increased 0.3% seasonally adjusted over the previous month and increased 7.5% unadjusted year-over-year.
• Sporting goods stores’ sales decreased 1% seasonally adjusted over the previous month and increased 1.6% unadjusted year-over-year.
• Sales at health and personal care stores increased 0.1% seasonally adjusted over the previous month and increased 7.7% unadjusted year-over-year.

[Source: Chain Store Age]

91% of cyber attacks start with a phishing email

The majority of cyber attacks begin with a user clicking on a phishing email. According to a new report from PhishMe 91% of cyber attacks start with a phish, the top reasons people are duped by phishing emails are curiosity (13.7%), fear (13.4%), and urgency (13.2%), followed by reward/recognition, social, entertainment, and opportunity.

“Fear and urgency are a normal part of every day work for many users,” says Aaron Higbee, co-founder and CTO of PhishMe. “Most employees are conscientious about losing their jobs due to poor performance and are often driven by deadlines, which leads them to be more susceptible to phishing.”

The study was based on more than 40 million simulation emails by about 1,000 of its customers around the world. The study took place over an 18-month span from January 2015 through July 2016.

Among the study’s top findings:

• Susceptibility to phishing email drops almost 20% after a company runs just one failed simulation. So people do learn.
• Reporting rates significantly outweigh susceptibility rates when simple reporting is deployed to more than 80% of a company’s population, even in the first year.
• Active reporting of phishing email threats can reduce the standard time for detection of a breach to 1.2 hours on average – a significant improvement over the current industry average of 146 days.
• The study also found that users respond to Locky ransomware’s phishing lures (21.5%) more than any other malware variant. The others that followed Locky included order confirmation (17%), job application received (15.5%), and blank email (11.9%).

[Source: Dark Reading]

Suspect arrested in 12 cell phone store robberies

A man suspected in as many as 12 armed robberies has been captured in Tempe, Arizona. Gilbert Martinez is accused of stealing hundreds of dollars in cash, and thousands of dollars worth of cell phones from Valley cell phone stores, according to court records.

Police report that Martinez went into the Boost Mobile cell phone store acting like a typical customer, until he told the employee, “Don’t do anything dumb, open the drawer, I have a gun.” Police say that when the employee hit the silent alarm, Martinez became nervous and fled, only taking the hand sanitizer he was holding while in the store. Five days later, Martinez allegedly struck again, this time at a Cricket store. In this case, police say Martinez took money from the cash drawer and then asked the employee “where the big money was.” The employee went to the back room and got him a bank bag with cash inside. A couple of weeks later, he reportedly robbed another cell phone store, this time getting money and a box full of cell phones.

Police received information that indicated Martinez, who had previously served seven years in prison for similar crimes, might be the person responsible for the robberies. Victims who were shown his photo identified him as the suspect. When police located Martinez at his Tempe home, he ran from officers and threw his handgun into a nearby parking structure. After he was caught, Martinez told police that he planned on killing himself with the one bullet that was in the gun. Martinez has been charged with one count of armed robbery, but police say he is a suspect in a dozen armed robberies. [Source: ABC News Phoenix]

Walgreens employee charged with felony embezzlement

Prosecutors in Cherokee County, Oklahoma have charged a former Walgreens employee after she allegedly confessed to stealing merchandise and using customer receipts to give herself cash refunds, resulting in a loss of nearly $11,000. Jessica Coulter is charged with felony embezzlement. Prosecutors allege the thefts began in November 2014 and continued until October 2016.

Officer Reed Felts first took a report when he met with Walgreens Asset Protection Manager George Schaeffer. Schaeffer received a lead that suggested Coulter was stealing money from the business. He told the officer he reviewed surveillance footage and saw Coulter remove a receipt from her pocket and carry out a “cash refund” worth $23.52. There was no customer present when the transaction occurred, and Coulter placed the money inside her pocket.

When Schaeffer visited Tahlequah and questioned Coulter, she allegedly confessed to making fraudulent refunds for several months, estimating she did so three times a week and often averaged $20 per “refund.” But she also told Schaeffer she would take food, drinks, cosmetic items and other “stupid things” about three times a week, averaging around $35 each time.She estimated her theft of merchandise and money from the false returns totaled nearly $11,000. Coulter also claimed a former Walgreens employee told her about the cash refund scam and even showed Coulter how to carry it out. [Source: Tahlequah Daily Press]

Infamous jewel thief Doris Payne, 86, arrested again

Legendary jewel thief Doris Payne’s love of bling has landed her in the clink once again. The 86-year-old, whose globe-trotting exploits were chronicled in a 2013 documentary, was arrested this week in the Atlanta suburb Dunwoody for allegedly trying to swipe a $2,000 necklace from a mall jewelry store. The bust comes a year after she was arrested at another Atlanta mall and charged with stealing $690 Christian Dior earrings from a Saks Fifth Avenue store. Charges in that case are still pending, and there is also a warrant out for her arrest in connection with a July 2015 theft of a diamond engagement ring from a store in Charlotte.

In past interviews, Payne has played coy about her crimes and what she has said is more than 20 arrests. She will call herself a thief in one breath and then deny stealing in the next. “I don’t dictate what happens when I walk in the store. The people in charge dictate what happens with me when I walk in the store,” Payne told the Associated Press earlier this year. “I don’t tell a person in the store I want to see something that costs $10,000. They make those decisions based on how I present myself and how I look.”

Matthew Pond, co-director and co-producer of the documentary “The Life and Crimes of Doris Payne,” said he was sad but not surprised to hear of his former subject’s latest run-in with the law. “The documentary we made about her focused on a crime she was accused of in San Diego and during her sentencing, as sad as he was to have to send her to prison, the judge said, ‘She’s the Terminator. She won’t stop,'” Pond said. “And now I’m thinking of her, 86 years old and arrested again, and I’m thinking he was right. She won’t stop.” [Source: NBC News Atlanta]

The post Breaking News in the Industry: December 15, 2016 appeared first on LPM.

Like the British referendum vote earlier this year, the election of Donald Trump in the United States has sent tectonic waves not just through the individual countries but also around the globe. With the unexpected results of both votes, we in the retail trade industry are left with more questions than answers as to what comes next on a variety of subjects.

For the retail loss prevention and profit protection industry, it remains business as usual—for the time being. Employee theft will continue as will shoplifting and organized retail crime. Compliance to internal and external regulations will remain a focus as will safety of customers and employees.

However, the anticipated changes, especially in global trade and immigration policies will undoubtedly have a major impact on the retail environment and, thus, on loss prevention policies, logistics security and processes, and retail hiring.

Over the past decade, perhaps longer in Europe, loss prevention has played an integral role supporting retailers’ acquisitionand sourcing of manufacturing materials and transportation of merchandise from point of manufacture to store shelves. Trade partnerships and international agreements have by most accounts helped streamline the flow of goods. Yet renegotiating or even bowing out of these trade agreements entirely, which certainly was a primary focus of Trump’s campaign, could have a tremendous impact on both the flow and cost of goods.

The nationalist movements that stoked both campaigns—and are alive and seemingly empowered in other countries throughout Europe—are hoping to return jobs to their home countries, jobs that they believe were outsourced to lower-wage nations in Latin America and Asia. Whether or not jobs return or remain outside the country, prices of goods will almost inevitably increase on the merchandise retailers sell, especially if tariff wars erupt as some experts predict.

Debate will continue as to the long-term benefit of changing trade policies, but there is no disagreement that retailers and their customers will be affected bothin the long and short term. Prices will likely fluctuate dramatically both up and down. On-shelf availability—one of the
LP industry’s major objectives—will be even harder to manage. Consumers will likely find goods unavailable in their neighborhood stores as well as online more frequently than today. Theft of products in high demand yet low availability will beadded to the “hot products” on organized retail crime gangs’ target lists.

I am certainly no economist or trade expert. Even if I were, based on the wide-ranging opinions voiced by those who are, there is no way to predict how the next few months and years will unfold. That said, the entire retail organization, including loss prevention, should begin an ongoing dialogue both inside each company and throughout the industryto look at policies and procedures and contingency plans to be able to proactively manage the changes as they occur.

Just as we prepare for natural disasters and terrorist events in our crisis management and business continuity planning, we should take a similar approach to these political upheavals. In fact, based on the extreme outcry from both sides after these recent developments, some might argue that these are indeed crisis events no different than an earthquake or hurricane, yet with much more far-reaching impact.

What is your take on the impact of these political changes? Are you discussing the impact inside your company in a formal way? We would love to hear from those on both sides of the Atlantic to help the retail industry begin dialogue on this important issue.

This article was originally published in LP Magazine EU in the Winter 2016-2017 issue.

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