Loss prevention has traditionally focused on shortage reduction through an emphasis on internal theft, external shoplifting, and operational controls. Resources to prevent these losses have been spent on developing programs and controls to stop loss from within the company.

Within the past decade, retailers have identified the growing threat of organized retail crime (ORC) theft. Loss prevention departments are beginning to shift resources in order to investigate and resolve these more complex cases that are causing a large percentage of their overall external theft shortage. Loss prevention professionals currently responsible for handling cases of organized retail crime have realized the difficulty in investigating groups of criminals who operate by boosting merchandise from multiple retailers.

Organized retail crime investigators rely on incidents that occur at their specific retailer in order to gather necessary evidence to present to law enforcement for resolution. Investigators may believe that a group has stopped their boosting activity and a case may become cold without progressing because they have not been seen in that particular retailer. In reality, these criminals are boosting merchandise at many retailers, which make them difficult to track and apprehend. A more effective way to attack this increasing theft trend is to bring together retailers and law enforcement resources in order to share theft trends and case details.

Today’s reality is that these organized criminals boost merchandise from any retailer who sells product that can be easily resold to a fencing operation. While flea markets, pawn shops, and makeshift stores have provided common places for the traditional booster of the past, online sales, or e-fencing, now allows an anonymous worldwide sales outlet.

E-fencing is now a national outlet for sophisticated organized retail crime rings. Because of the easy ability to resell boosted merchandise, boosters work with lists that include everything from electronics to baby formula and low-end apparel to high-end designer clothing. It is common to find a wide array of merchandise in their vehicles or in homes for resell.

Organized criminals commit crimes at all retailers, and for that reason, companies can–and should–work together in order to connect the dots for case identification and resolution. Combining evidence and investigative resources will produce more rapid case closure, increased criminal charges, restitution, and extended sentencing, all of which are needed in order to reduce shortage and take criminals out of circulation.

Shortage Impact of ORC Theft

Organized retail crime costs the retail industry nearly $30 billion per year. According to a 2015 survey by the National Retail Federation (NRF), almost 97 percent of retailers report being victims of ORC theft activity within the last year.

ORC theft activity has been reported across all sectors of retail nationwide. In many closed cases, boosters were found to have been hitting multiple retailers for different types of product lines depending on what was hot for resale to traditional and online fence locations.

Organized retail crime is making a significant negative impact on shortage results. Retailers realizing the magnitude of the problem impacting their bottom line are responding by creating departments within the LP pyramid in order to specifically identify and eliminate these theft rings.

Economic and Community Impact

ORC theft losses contribute more negative impact than just company profits. Retailers pass losses to consumers in the form of higher prices. Companies must make their product pricing decisions based on many factors. One such factor is projected overall loss the company will incur over the year and what appropriate price will recover those lost profits. An increase in cost to the consumer is the most likely answer to recover those losses.

In addition to increased prices, ORC theft rings make desirable products unavailable to honest consumers. When these crime rings boost large quantities of merchandise from a store, the honest consumer is left with no option to purchase the product, thus impacting their shopping experience and negatively impacting sales for the retailer. In many cases, the impacted retailer has no idea that the merchandise was stolen and replenishment does not arrive until a cycle inventory is completed later that year. Thus, every time a customer returns to attempt to purchase a particular product, the store will not have it in stock; the inventory system believes that it is still in the store when in fact it is being sold through a fence location instead.

Another negative impact of organized retail crime is that state governments lose out on needed sales tax revenues. When fewer products are sold through retailers who legitimately report and pay taxes, less money is contributed to fund government activity to improve our communities. When ORC theft rings use refund fraud as their mode of operation, this decrease in taxes is doubled. When merchandise is returned to a store fraudulently, not only do local, state, and government programs lose out from the taxes that would have been collected on the original sale, but they also lose a second time because that return pulls sales revenue from the store.

Criminal Benefits

Currently, the benefits for criminals to commit organized retail crime far outweigh the negatives. The financial benefits for being involved in ORC theft are too great for criminals to ignore. Individual boosters report profits of over $100,000 a year in providing fence operators with merchandise for resell.

When boosters are caught in a store for shoplifting, they generally only have small amounts of product on them and will likely be charged with a misdemeanor shoplift for that one incident of theft. What is often overlooked by law enforcement and even some LP investigators is that, in many cases, the shoplift incident where the arrest occurred may have been the fifth or sixth location that the booster committed a theft that day. The rest of the merchandise may be sitting in their vehicle in the parking lot.

If the correct questions are not asked by LP professionals or law enforcement officers, or if a vehicle is not searched, then the scope of the activity will not be uncovered. In the case where a booster is only charged for theft from one location, the penalties are minor and little or no jail time will be served.

If an investigation does lead to the arrest of an ORC theft ring and those individuals are charged for the full amount of loss they were responsible for at that one particular retailer, the group will see slightly more jail time, but still insignificant punishment.

However, if a joint investigation by multiple retailers leads to the arrest of an ORC theft ring in which a much larger dollar loss is proven and multiple counts of theft are charged affecting multiple retailers, then punishment can increase significantly. This will lead to the temporary elimination of the theft ring. Taking these groups out of circulation keeps needed merchandise in the store for sale to legitimate customers. However, once the individuals are released, they may return to target different retailers or products that were not part of the original investigation and prosecution.

Connecting Retailers and Law Enforcement

Law enforcement has a wide variety of task forces or special departments that investigate property theft cases depending on location and governing body. In many cases, law enforcement resources are used by retailers only after a case has been put together and the majority of the needed evidence to prosecute has been obtained. As a result, retailers can provide assistance to one another by becoming involved in cross-retail investigations sharing. This will allow for cases to be put together more quickly when multiple retailers are involved in a case.

Often, the pieces of evidence needed to complete an ORC theft investigation can be found across different retail case files, waiting for someone to connect the dots. In addition, having joint retail documentation and evidence adds credibility to cases for prosecution. It allows for a strong case presentation to a law enforcement agency that will be able to assist in the final stages of the case being closed.

A company’s policies on information sharing must always be considered in relation to case details. However, general case information such as the mode of operation, subject descriptions, and pictures should be considered by retailers when attempting to identify and locate theft rings that are causing large amounts of loss.

Good resources are available for cross-retail investigations sharing. Many counties and states across the country have organizations that meet monthly or quarterly where law enforcement and retailers get together to discuss thefts and criminal trends. These “crime stoppers” or “property theft” associations are beneficial places to educate law enforcement and share case details in order to solicit support for cases by both law enforcement and other retailers in attendance.

In addition to the above suggestions, the easiest way to work together is by simply talking to other LP professionals. Sharing information via email that can be passed along to investigators in the field is a great way to work together. This is a quick and easy way to get information out to those responsible for investigating this type of activity within their company. It also increases the probability that your subject will be seen by other investigators and evidence can be obtained in order to bring your case to resolution.

This article was excerpted from “Connecting Retailers to Combat Organized Retail Theft,” which was originally published in 2006. This article was updated February 28, 2017. 

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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 reports 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.

This article was originally published in 2016 and was updated March 1, 2017. 

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

Professional advancement and building a successful loss prevention career can mean many things to many different people. For some individuals it may mean reaching a top leadership position at a particular company, perhaps serving as a director or vice president of loss prevention/asset protection. For others, it may involve gaining experience in multiple professional fields in order to establish a unique and versatile role that capitalizes on all of our various skill sets. Some aspire to be the very best at a particular skill or discipline, building a base of knowledge and expertise that sets us apart from the rest. There are those that strive to leave a professional legacy, leaving a lasting mark on the present and future of the loss prevention industry. And there are still others that simply want the recognition that comes with reaching a particular level of performance and the security that it provides.

There are many different ways to evaluate our career vision and professional aspirations. But what is most important is that we find the path that fits us best. We need to fashion and follow a professional development plan that leads us forward and builds our future. Especially when involved in a profession that is evolving as quickly as retail loss prevention, career growth is essential to professional survival. Whatever our professional goals and aspirations might be; whatever skills and experiences have helped forge our personal loss prevention career path, we have to find and seize the opportunities to learn, grow, and progress.

All of us throughout the loss prevention community are proud of the accomplishments of those that have worked hard and earned a new place along the loss prevention career path. Please join us in congratulating the following individuals on their recent career moves and promotions.

March 2017

Brad Milo is now East Coast loss prevention manager at Aeropostale

Matthew Schoenauer is now a senior ORC investigator at TJX Companies

Dale Jackson is now a regional loss prevention manager at Charming Charlie

Gloria Fausto-Figueroa is now a regional asset protection manager at Advanced Auto Parts

Jeremiah Brajczewski is now an ORC Investigations Area Supervisor at UNIQLO

Luis Loayza is now an ORC market investigator at Victoria’s Secret

Carolyn Korchik, CFI named Global Security & Retail Loss Prevention Operations Manager at Levi Strauss  Click here to learn more

Steve Boarman was promoted to the Director of Central Investigations & ORC at Macy’s

Greg Adams was named Director of Loss Prevention with A.C. Moore  Click here to learn more

Charles Simms was promoted to market manager of asset and profit protection at Sears Holdings Corporation

Teri Railey was promoted to regional loss prevention manager at Gap Inc.

Jeremy Nerbonne was promoted to regional loss prevention manager at LIDS Sports Group

Ted Younes is now a regional loss prevention manager at GNC

Michael Romeo is now a regional supply chain investigations manager at TJX Canada/Winners

Brian Tolbert was promoted to territory asset protection manager at Sears Holdings Corporation

Jaclyn Kachur was promoted to regional manager of loss prevention at Indigo Books and Music

Larry Martinez was promoted to district manager of investigations at Macy’s

Russell Fisher is now a district asset protection manager at Stage Stores

Meredith Plaxco was promoted to director of loss prevention & safety – strategy, operations, and field at PetSmart

Almond Dennis, Jr. was promoted to market asset and profit protection manager at Sears Holdings, Co.

Robert Malone was promoted to district asset protection manager at Saks Fifth Avenue

Hank Siemers, CFI promoted to vice president of global retail security at Tiffany & Co.  Click here to learn more

Paul Jaeckle, LPC named vice president asset protection at Meijer’s  Click here to learn more

Chris DeSantis, CFI promoted to vice president of asset protection for the Herald Square district at Macy’s

Antonio Harris promoted to regional director of investigations at Macy’s

Nicole Thorne promoted to asset protection business intelligence analyst at Macy’s

Janet Rodriguez promoted to organized retail crime analyst at Macy’s

Tim Huff promoted to director of national events for asset protection at Macy’s

Brian Goddard promoted to manager of AP innovation and implementation at Macy’s

Jay Morales named regional security manager at McDonald’s

Kelly Moye, CFI promoted to assistant vice president of operations and investigations at GM Financial

Melanie Meschwitz, CFI was promoted to senior regional loss prevention & safety manager at PetSmart

Jaclynn Arabe was promoted to regional loss prevention manager at Old Navy

Adam Stokes CFI is now lead supply chain loss prevention manager at ULTA Beauty

Bob Jensen is now a regional director of asset protection at Rite Aid

Michelle Cabrita, CFI named senior corporate investigator at Barnes & Noble, Inc.

Eric Ives, LPC was named director of special investigations for Luxottica

Maurizio Scrofani, CCSP, LPC was named vice president of supply chain security and intelligence at Grupo ALTO  Click here to learn more

Jim Zurawski is now an area loss prevention manager at HEB

Robert Fanuko is now a field loss prevention manager at Staples

Garth Gasse, CFI was promoted to national loss prevention manager – US & Canada at SSP America

Robert Grant is now an area loss prevention manager at Ross Stores, Inc

Matt Barnett was promoted to corporate loss prevention analyst at Belk

Ian Amato, LPC was named national loss prevention manager at Maison Birks

Tracy Beltram was promoted to regional loss prevention manager at Old Navy

Christopher Crossman promoted to Senior Director of Loss Prevention Operations at CVS Health  Click here to learn more

Clarence Gooding is now a regional loss prevention specialist at Shoppers Drug Mart

Neil Baker was promoted to regional business partner, loss prevention at Total Wine and More

Joshua Kastner was promoted to regional loss prevention manager at TJX Companies

David Homolka was named VP of human resources at Duluth Trading Company

Michael Woods is now director of assets protection & safety at Denny’s

Michael Fallon Jr. is now a market asset and profit protection leader at Sears Holdings Co.

Brett Marksberry was promoted to director, supply chain asset protection at Macy’s Logistics and Operations

Ryin Francis was promoted to regional loss prevention manager at Gap Inc./Old Navy

Reinaldo Valdes was promoted to regional loss prevention manager at Shoe Carnival

David Powers CFI is now a territory AP leader at Ascena Retail Group

Bob Serenson is now a strategic account manager at Checkpoint Systems

Spenser Valerga was promoted to area asset protection manager at JC Penney

Antonio Harris was promoted to regional director of investigations at Macy’s

Rey Rodriguez was promoted to district director of asset protection at Macys

Ashley O’Rourke was promoted to area loss prevention manager at Nordstrom

Garrett Rodriguez was promoted to regional loss prevention manager at Gap Inc./Old Navy

Mario Cardia, CFI was promoted to regional loss prevention manager at Gap Inc./Old Navy

Joseph Carteret, CFI was promoted to regional loss prevention manager at Gap Inc./Old Navy

Steven Bond was promoted to regional loss prevention manager at Gap Inc./Old Navy

Matthew Koury, CFI was promoted to regional loss prevention manager at Gap Inc.

Justin Evans is now an area asset protection manager at Stein Mart

Jamie Jones was promoted to corporate security analyst at Aldi

Lise Lang, CFI was named corporate investigations – US and Canada at Starbucks

To review the February “People on the Move” click here.

Many of the Loss Prevention / Asset Protection career moves and promotions are reported to us by our career advisor partners. We are grateful for their collective efforts and diligence in delivering this information. If you would like to provide information pertaining to a recent promotion or career move that is not listed below, we welcome your submissions by clicking here.

The post People on the Move: March 2017 appeared first on LPM.

Nine accused in organized $102K theft from Safeway

A group of 9 people is accused of stealing more than $102,000 from Safeway-Albertson stores, according to police. The 5-week investigation into the suspect organized retail crime (ORC) began in October 2016. ORC typically involves more than one individual, said Scott Chapman, the Director of Asset Protection for Albertson-Safeway. He said the groups usually steal merchandise and sell it on the black market. “They’re in business to make money, whether it be for drugs (or) whether it be for re-selling,” Chapman said. ORC can result in higher prices for consumers and less taxes for state and local governments, he said. The thieves will steal in bulk quantity.

Some will use what’s known in the industry as a “booster bag,” which is typically a large handbag lined with tinfoil. Other thieves will load up a shopping cart and simply leave without paying. Those are called “push outs.” Chapman said ORC investigators are seeing thieves steal high-value items that are popular across a wide demographic of individuals such as laundry detergent, teeth whiting strips, allergy medicine and nutritional supplements.“It’s a quick turn for them,” Chatman said. “They can sell it quickly.”

The investigation resulted in the identification of 9 suspects, including suspected ringleader Jenna Hollingshead. According to ORC investigators, Hollingshead was “specifically targeting” stores in Southeast Portland and Gresham. She was selling laundry detergent pods online for prices “far below their market value,” according to Safeway. Undercover investigators were assigned to the case. ORC undercover investigators eventually identified John Logan Irish, Stephanie H. Mitchell, Andrew J. Christie, Kristin Renee Eichler, Michael William Lewis, Richard Santos, Tyler Scott Tomlinson, and Kristan Lee Partin as associates to the operation Hollingshead was running.  Safeway investigators say they developed probable cause to have each arrested; however, not all have been indicted by a grand jury.  [For more: KOIN6 News]

Family of security guard fatally stabbed by shoplifting suspect grieve

Family members of a loss prevention associate at a Burlington store who was fatally stabbed Saturday say they are left wondering how a minor shoplifting incident escalated into a lethal assault.  Larry Donnell Drumgole, who was working as an LP associate, was fatally stabbed while confronting a shoplifting suspect at the retailer’s Potomac Mills mall location in the Woodbridge, Va., area on Saturday afternoon, the county police said.

“It’s so sad he was taken away just like that, over something that couldn’t have been worth it,” Nora Clinton, Drumgole’s mother, said Monday.
According to Prince William County police, Drumgole was stabbed after he and another associate confronted a man who had been observed shoplifting inside the store. The associates approached the man who was walking toward the parking lot, where a tussle broke out, the police said.

Drumgole, 44, of Rappahannock Academy, died of his injuries at a hospital shortly after, according to police.  The other LP Associate was unharmed.  [For more: The Washington Post]

Liquor store owner beat to death with wine bottle

The 46-year old owner of a Rochester, N.Y. liquor and wine store, and mother of three, was beaten to death during a brutal robbery late last week.  Around 5 p.m. Thursday, police say a 59-year old man entered the shop and used a wine bottle to bludgeon the woman, Charlotte Lahr, to death. When responders arrived, they noticed “severe trauma to her head and upper body”. The suspect, Kevin Quander, was actually out on parole when the crime occurred, having served nine years stemming from a 2007 first-degree burglary conviction.

The vicious attack was captured on security cameras and Quander’s fingerprints were found at the scene. The man had a total of three prior felonies, before being arrested Friday on charges of first-degree murder and robbery. Lahr’s store was previously robbed when someone drove a car into the storefront. This led Lahr to install security cameras in her shop, which was used to help identify the suspect in her death. Quander is currently being held without bail and entered in a not guilty plea.  [For more: TWC News]

Catch up to the future of credit card fraud with our FREE Special Report, Credit Card Fraud Detection and Prevention: Lessons on Credit Card Skimming, e-Commerce Scams, and Theft Investigations.

1.37 Billion user identities leaked, taking down one of the biggest spam empires

Believed to be the largest data leak ever, a database of roughly 1.4 billion IP addresses, email addresses, and even physical addresses were leaked Monday.
 A security researcher, Chris Vicker, shared the recent story on Monday, calling it possibly the largest data leak in history. Vicker had accidentally discovered some suspicious looking files and was shocked when he found out what he had come across. Amazingly the information was not even password protected.

The source of the data leak is River City Media (RCM), who are notorious for being highly effective spammers. While the group does offer some actual services, it is not quite the innocent marketing group it represents itself to be. In fact, RCM is estimated to send over a billion spam emails per day.  The group is believed to collect this data through malware, offering “free gifts” or education opportunities, and by a process known Co-registration. This occurs when users are prompted with and accept or click the “I agree to terms of services” boxes. By agreeing to the terms, permission is granted to share your personal information to affiliate companies, a fact unbeknownst to most people.
 Vicker also stated that law enforcement has been notified and sent details of RCM’s abusive tactics and scripts, which were utilized to collect the information.  [For more: WCCF Tech]

House passes bill creating “organized retail crime”

The House of Delegates passed a bill Tuesday that would create the criminal offense of organized retail crime in West Virginia. Delegate Rodney Miller (D-Boone), a former county sheriff, said the provisions of the bill (HB 2367) would provide another tool for police officers and prosecutors to go after those who encourage the drug epidemic by hiring drug addicts to participate in retail theft. “They are sending boosters out into our communities to steal property, bring back to them, so they can have their profit level and in return the consumer in the state of West Virginia is eating the cost of that,” Miller said. The bill defines organized retail crime as “the commission of two or more retail crimes, either alone or with any person or persons, as part of an organized scheme within a ninety-day period, and the aggregate value of the retail price of the merchandise involved in the retail crimes exceeds $1,500.”

Opponents of the bill, including Delegate Pat McGeehan (R-Marshall), argued the state already has crimes to cover the illegal activity like theft and shoplifting. “We need to stop just passing law after law to add to the books. If prosecutors really want to go after criminals use the laws currently on the books,” McGeehan said. But Miller argued the bill eliminates a series of small crimes and takes them to the next level to get to those who are ordering the criminal activity. “This takes it higher up the food chain. It gets us to a point where we can take some of these folks out and take their assets away from them,” Miller said. “They don’t care about the people they are using and abusing and causing them to go out and steal in their communities. They don’t care about their next fix. They don’t care about the treatment. They don’t care.”

The bill lays out levels of organized retail crime from misdemeanor to felony with various fines and jail time. The maximum jail time listed is 3 to 15 years. The bill passed the House 93-4 and was sent to the Senate.  [For more: Metro News]

Open letter to IL Governor: Raising prosecution threshold for shoplifting harms retailers

The letter was written by Amy Looten, executive director of the Quincy Area Chamber of Commerce, Illinois:

While business owners in the Quincy Area Chamber of Commerce recognize and appreciate the fact that Gov. Bruce Rauner is attempting to cut state expenses by reducing the number of inmates in Illinois prisons, we are concerned about the recent proposal to increase the threshold to $2,000 (from $300) to prosecute retail theft as a felony. The increase sends a message that not only can thieves steal more, but their penalties will be much less.

We agree that non-violent offenders, particularly first-timers, should not necessarily be sitting in jail, but the answer is not to declare open season on retailers. Studies repeatedly point to the fact that shoplifters steal many times before they are caught.  According to the Illinois Retail Merchants Association, in 2015 the national loss reported from retail theft was estimated at $60 billion, and Illinois’ share was over $2 billion.

Not only does this impact the state and local governments’ income from sales tax, it increases the cost of goods to all. Store owners, especially those working with a low profit margin, cannot absorb this loss, so they typically pass it on in the form of higher prices. We all pay for retail theft.
With a $2,000 threshold, a shoplifter could steal an Apple MacBook Pro laptop, 1-carat diamond stud earrings or 58 pairs of denim pants (at $34 a pair) and be charged with a misdemeanor, which comes with probation and a fine of $1,500 to $2,500. The fine could be less than the value of the stolen item. This proposal by the Illinois State Commission on Criminal Justice and Sentencing Reform diminishes the seriousness of retail theft and erodes our sales tax base. On behalf of the members of the Quincy Area Chamber of Commerce, we urge Rauner, Sen. Jil Tracy and Rep. Randy Frese to reject this recommendation and reinforce the fact that retail theft is serious business. If total rejection is not possible, we at least expect a more reasonable dollar amount.  [For more: Herald-Whig]

LP Worldwide: ATM tricksters used hidden cameras to skim card details

Two men accused of having stolen thousands by placing skimming equipment on ATM machines across Malta were this afternoon arraigned in court. Emil-Alexandru Hrinca, 30, and Silviu Mirica, 34, having no fixed address in Malta, stand charged with having formed part of a criminal organization. The two are facing charges of conspiracy to commit a crime, forgery and of having made an unlawful gain exceeding €5,000 to the detriment of HSBC Bank Malta, APS Bank and Bank of Valletta. Inspector Matthew Vella charged Mr Mirica from the Economic Crimes Unit with having masterminded the alleged criminal activity. Mr Mirica allegedly installed hidden cameras on bank ATM machines in various localities around Malta and used them to obtain card details when customers withdrew funds.

The court, presided by magistrate Marse-Anne Farrugia, heard how this information was then used to produce counterfeit cards that were used by the men to withdraw cash. Nine such cards were found on the person of the accused at the moment of arrest. Mr Mirica was arrested last Saturday after being caught red-handed while withdrawing money from an ATM in Gzira. The court was informed that €270 in cash were found upon him at the time of his arrest. A wallet containing personal documents, a train ticket, an empty SIM card cover, a SIM card and two fiscal receipts were handed over to the court.

When asked by the court to state his plea, Mr Mirica at first insisted on pleading guilty in spite of his lawyer’s advice to the contrary. Later, he appeared to have a change of heart and indicated his intention to plead not guilty. Mr Hrinca, the second accused, was found in possession of a batch of 50 counterfeit bank cards at the time of his arrest.  [For more: Times of Malta]

The post Breaking News in the Industry: March 8, 2017 appeared first on LPM.

Market Organized Retail Crime Manager, Lowe’s, (CA)
The Market ORC Manager will have primary responsibility for detection, investigation, and prosecution of organized retail Crime related activities through analytical review of losses and reporting. This position will report directly to the Loss Prevention and Operations Support Manager (LPOSM), and will also be supported by and receive guidance from the Corporate Investigations team… Learn more

Area Asset Protection Leader, Big Lots, (CA)
Manages asset protection and Safety program activities designed to increase overall store profitability, reduce shrink and provide support to establish and maintain a safe and secure environment within stores in an assigned market… Learn more

Area Asset & Profit Protection Manager, Kmart, (OH)
Non Negotiable(s)/Critical Success Factors: Owns shrink and safety results for assigned area(s) and supports the Loss Prevention five play strategy; Manages the training, detection, investigation and successful resolution of all internal high dollar and sensitive investigations within assigned store; Ensures all training in the detection and detention of shoplifters including certification has been completed… Learn more

Area Asset Protection Manager, JCPenney, (FL)
As the Area Asset Protection Manager you will lead asset protection activities for your assigned stores in accordance with company policies and procedures, in order to drive sales and profits... Learn more

The post Today’s Top LP Jobs appeared first on LPM.

LP Manager (Multi-Unit) , Kmart, (PA)
The Multi-Unit Loss Prevention Manager is responsible for providing disciplined leadership, including clear expectations and holding the team and self-accountable for results. This position is accountable for conducting the training, detection, investigation, and successful resolution of all internal investigations within the assigned stores. This position is responsible for owning the shrink and safety results for the stores… Learn more

Market Organized Retail Crime Manager, Lowe’s, (CA)
The Market ORC Manager will have primary responsibility for detection, investigation, and prosecution of organized retail Crime related activities through analytical review of losses and reporting. This position will report directly to the Loss Prevention and Operations Support Manager (LPOSM), and will also be supported by and receive guidance from the Corporate Investigations team… Learn more

Asset Protection Manager, Sears, (MD)
Non Negotiable(s)/Critical Success Factors: Owns shrink and safety results for assigned area(s) and supports the loss prevention five play strategy Manages the training, detection, investigation and successful resolution of all internal high dollar and sensitive investigations within assigned store. Ensures all training in the detection and detention of shoplifters including certification has been completed in assigned store… Learn more

LP Market Specialist (Multi-Unit), Bealles Outlet, (FL)
The position has multi-unit responsibility and is 40 hours weekly. Weekly travel reimbursement and drive time provided. We are a winning loss prevention team with industry leading technology & shrink reducing strategies. Opportunity for growth into Field Management, Investigations, ORC Investigations and Auditing… Learn more

The post Today’s Top LP Jobs appeared first on LPM.

Best known for his fifteen years as head of the Food Marketing Institute’s (FMI) loss prevention initiatives from 1987 to 2002, Charles Imbrie “Chuck” Miller, CPP, CSP, had a major impact on the supermarket segment and loss prevention industry as a whole. Miller influenced and mentored many loss prevention executives who are leaders in the industry today.

“Our entire industry and so many of my colleagues are deeply saddened to hear of our friend and mentor’s passing, as he touched so many of our lives both personally and professionally,” said Dan Faketty, vice president of asset protection for Southeastern Grocers and current chair of the National Retail Federation’s LP council. “He was truly on the cutting edge of building proactive loss prevention programs for not only FMI member companies, but all retailers. These programs are used even today to positively impact retail stores.”

“I first met Chuck in the early ‘90s when he was visiting Safeway and attended a shrink presentation I was giving in Seattle,” recalled Kathleen Smith, vice president of corporate security at Safeway. “Afterwards he asked that I give the presentation at an upcoming FMI loss prevention conference in Georgia and later asked me to join the LP committee. I’ve been on the committee ever since.”

Karl Langhorst, CPP, CFI, former head of loss prevention at Kroger and Randall’s/Tom Thumb supermarkets and now executive vice president of ALTO US, said, “Chuck was the consummate loss prevention professional. His vast knowledge of our industry never ceased to amaze me, and I sought out his expertise on multiple topics numerous times throughout my career. His legacy leading the FMI LP council, as well as his many other contributions to our profession, are truly remarkable.”

Many of his colleagues credit Miller for being one of the first in the industry to advocate that retailers and law enforcement focus efforts on fighting organized retail crime (ORC). Safeway’s Smith said, “Chuck was truly a forward thinker. I remember I first heard about ORC from him. Many have taken credit, but if Chuck was not the first, he was right up there with the pioneers. Looking back, it must have been very difficult convincing folks early on, but Chuck never gave up.”

One of his most noted accomplishments was working with retailers such as Target stores to develop a first-of-its-kind video documenting ORC (referred to as organized retail theft at the time) titled “Thieves Market.” Produced in the mid-1990s, the 13-minute video explained in detail the ORC problem to retailers, law enforcement, and legislators.The video was so well produced that it was used as a training tool at the FBI Academy in Quantico, VA, to train law enforcement professionals and FBI special agents to better understand the methods of criminal enterprises impacting retail stores.

As vice president of loss prevention at Target, King Rogers worked with Miller closely on the awareness and training projects related to ORC. Now an executive with Master Technology Group, Rogers said of Miller, “One of his many characteristics that made him successful and contributed so much to our industry was his fearless ability to take risks. When he was convinced that something was the right thing to do for FMI and the whole loss prevention industry, he did it. Occasionally he might have to ask for forgiveness later, but he got it done. Incredibly courageous with tireless energy, he was a fun man to watch as he constantly made significant impacts on our industry. It’s too bad that so many of today’s younger LP leaders did not have the opportunity to profit from knowing Chuck Miller as so many of us did.”

Miller retired from FMI in 2002 but continued to serve as a consultant to various companies and associations, including the National Food Processors Association and the NRF. In 2005, the NRF published Miller’s study titled Organized Retail Theft: Raising Awareness, Offering Solutions that led to the FBI asking Miller to organize the FBI’s ad hoc committee on ORC, which continues to be hosted by NRF.

During his tenure with FMI, Miller was responsible for coordinating numerous supermarket-related initiatives, including customer and employee safety, fire prevention, disaster and damage control, product tampering, security, crisis management, insurance, and substance abuse. He also developed FMI’s regulatory compliance programs relating to loss prevention, hazardous substances, and other areas. He also developed the first of its kind loss prevention email-based e-share network for industry executives to share information and obtain guidance on literally hundreds of current issues and trends that became a model for other associations.

Miller was an immediate and enthusiastic supporter of LP Magazine when it debuted in September 2001, inviting the magazine staff to speak at FMI conferences and encouraging all supermarket LP professionals to subscribe to the magazine. He also contributed articles to the magazine—one on the food industry’s response to bioterrorism and a second on planning for terrorist attacks against retailers.

Prior to FMI, Miller was president and owner of Loss Prevention Systems, a management consulting firm he founded in 1970. His firm’s services included producing loss prevention seminars, designing and implementing security and safety programs, conducting security surveys and internal investigations for management, and training management and supervisory personnel. Earlier in his career, he served as manager of loss prevention for Kroger and as director of security and training for The Tappan Company.

Visitation for Miller will be held at 1:30 p.m. on Tuesday, March 14, at Andrew Chapel United Methodist church in Vienna, VA, with services at 2:00 p.m. and reception to follow.

The post Food Marketing Executive Chuck Miller Dies at Age 79 appeared first on LPM.

Shoplifting suspect fatally stabs LP associate

A shoplifting suspect fatally stabbed an LP associate in the Burlington store in Woodbridge, Virginia, Saturday before fleeing the scene, according to Prince William County police.  Two loss prevention associates at the Burlington store at 2700 Potomac Mills Circle confronted Jamel Carlos Kingsbury, 35, who they observed shoplifting inside the store, police said. After the associates confronted Kingsbury when he exited the store, a struggle ensued, and Kingsbury stabbed one of the associates and fled on foot. Prince William County police arrived to the store at Potomac Mills Mall about 2:30 p.m. and searched the area but could not find Kingsbury.

The LP associate who was stabbed, Larry Donnell Drumgole, 44, was taken to a hospital, where he died as a result of his injuries. The second associate involved in the encounter was not injured. Kingsbury is described as a black man who is 6 feet 2 inches tall, weighing 190 pounds and has black hair and green eyes. Kingsbury was also involved in a “domestic related call” Saturday morning, police said.

Anyone with information on Kingsbury’s whereabouts is asked to contact police at 703-792-6500 or Crime Solvers at 1-866-411-TIPS.  [For more: NBC Washington]

Jewelry theft suspect charged while already in jail

A man who allegedly stole $15,666 worth of jewelry from the Cornelius Fred Meyer in January was charged on March 2, deputies said. The Washington County Sheriff’s Department said deputies have been looking for this suspect for more than a month. Marshall Litten allegedly went into the jewelry store on January 19, smashed a display case and ran off with $15,666 worth of gold necklaces.

Deputies saw a booking photo of Litten after he was arrested for a robbery in Beaverton and believed he was the same man seen in surveillance video from the jewelry store robbery. The forensic science unit confirmed Litten was the suspect they were looking for based on evidence from the theft. Litten was already being held at the Washington County jail for the Beaverton robbery case, and was then charged with first-degree theft and criminal mischief for the Fred Meyer theft. He is being held on $280,000 bail.  [For more: KOIN]

NY man nabbed for $1M in counterfeit jackets

A Jericho, New York, man was arrested for allegedly selling counterfeit The North Face jackets after investigators seized 20,000 of the coats with a street value of more than $1 million, authorities said. Rahul Biswas, aka Kazi Aziz, was charged with trademark counterfeiting. Judge Joseph Girardi set his bail at $100,000 cash or bond.

Federal agents and investigators with the district attorney’s office seized the jackets after executing search warrants at the 56-year-old suspect’s Old Bethpage warehouse, where the jackets were stored after being shipped from Bangladesh.   Investigators also raided the office of his Jericho-based business, TRB Designs and Resources, Inc., where they seized business records and two Bangladeshi passports, one in Biswas’ name and another in an alias, authorities said. Neither he nor his company are authorized distributors of The North Face products, but he sold them to other distributors, according to investigators, who described the jackets as inferior quality and not as warm as the real thing. The counterfeits sell for as little as one third the price of the original. He is due back in court Monday and faces up to five to 15 years in prison, if convicted.  [For more: Long Island Press]

Colorado police arrest Maine convenience store manager for theft

The former manager of a New Harbor, Maine, convenience store faces felony forgery and theft charges after she embezzled over $50,000 from the store in 13½ months, according to police. Siarra M. Kear, 23, of New Harbor was arrested in Colorado on Friday, Feb. 24, after more than two weeks at large. She is fighting extradition to Maine, according to Lincoln County Sheriff’s Office Lt. Michael Murphy. Kear faces one count each of class B forgery and class B theft by unauthorized taking, according to court documents. A class B crime carries a maximum penalty of 10 years in prison.

The Aurora Police Department in Aurora, Colorado, a suburb of Denver, arrested Kear on a warrant out of Lincoln County, according to Murphy. She is in custody at an Arapahoe County jail with bail set at $5,000 cash or surety. Kear was an employee of Dee’s Variety for about six years, according to an affidavit by Lincoln County Sheriff’s Office Detective Scott Hayden. She was the store manager from January 2013 until January of this year.

As store manager, Kear was responsible for ordering, payroll, scheduling and some bookkeeping, according to Hayden’s report. She was also involved with the daily operations of the store. In early January 2017, $3,200 in cash went missing from the store, according to the report. The same day, Kear did not show up for work. Dee contacted her bank to request statements for the last year, and found more than $35,000 in unauthorized checks payable to Kear, according to the report. She also found $3,227.18 in unauthorized charges to a business credit card in Kear’s name. “There are numerous charges to Amazon Video on Demand, Walmart (including a $938.99 charge that Patti found was the purchase of a TV for Siarra’s boyfriend), and also a $425 charge to the Animal Emergency Clinic in Portland,” Hayden said in the report.  [For more: Bangor Daily News]

Catch up to the future of credit card fraud with our FREE Special Report, Credit Card Fraud Detection and Prevention: Lessons on Credit Card Skimming, e-Commerce Scams, and Theft Investigations.

Yahoo! CEO will give up annual equity, bonus due to security breaches

An update regarding the internal, independent board committee investigation of two massive Yahoo hacks, along with a 10-K financial filing for the company for 2016, reveal a little more about who knew what and when concerning data breaches. According to the filed documents, the affected cookies have since been invalidated. Yahoo CEO Marissa Mayer is among the highest paid CEOs.

Yahoo began warning some customers in mid-February that state-sponsored attackers had accessed their accounts by using the sophisticated cookie forging attack. The chief exec is doing so as a tacit admission of failure following Yahoo’s two separate security breaches revealed previous year that collectively compromised the personal information of more than 1.5 billion users.

Vijaya Gadde, Twitter’s Head of Legal Affairs said that he has little to no knowledge about Yahoo’s breach, but he knew that lawyers are very easily blamed for everything. Mayer, a former Google executive, said she would voluntarily turn down her annual bonus and equity grants for 2017 as a result of the incidents. Yahoo’s general counsel, Ronald Bell, resigned without severance pay for his department’s lackadaisical response to the security lapses. Yahoo revealed a year ago that it suffered two security breaches, one in 2014 and one in 2013, that compromised info like names, email addresses, telephone numbers, and cashed passwords. Last month, Verizon Communications, which is in the process of buying Yahoo’s core assets, lowered its original offer by US$350 million to US$4.48 billion.  [For more: Ligue1Talk]

National retailers step up the pace of store closures

Retailers are disappearing from shopping centers in Maryland and throughout the United States at a pace not seen in years as familiar brands go out of business or attempt to stay alive by closing some stores. Online shopping has changed how people buy things, and retailers that fall between discount and luxury are struggling the most.

This year alone, at least 13 retailers are closing more than 1,500 stores nationwide. The Limited and Wet Seal — with more than 400 apparel stores between them — have gone the way of Sports Authority and Radio Shack, disappearing altogether. Consumers are visiting stores less frequently and increasingly turning to computers and mobile devices to browse, shop for deals and complete purchases. Such shifts mean retailers need fewer physical stores and less space and inventory at a time when the nation is already “overstored,” experts said.

“It’s going to be a very difficult year,” said Mark Millman, president and CEO of Millman Search Group, a retail consulting and executive search firm. “We are over-retailed. Mall traffic is down in every center. The consolidation will be increasing.” He said his firm is gearing up to help liquidators staff the many going-out-of-business sales that retailers run when winding down operations. “Liquidators are telling me it’s the worst they’ve seen in 30 years,” Millman said. “The numbers of closings are fast and furious.” Store-closing announcements typically come after the dust settles from the crucial holiday selling period and after retailers report and assess end-of-year sales and profits. Many retailers turned in disappointing financial results this past holiday season and are looking to trim costs. Others have chosen not to renew leases when they expire.  [For more: The Baltimore Sun]

Amid a sea of store closures, home-improvement retail thrives

The home-improvement sector of commercial real estate tends to fluctuate. It is very reliant on the stability of the housing market, which has been a bit shaky for some time. It can also be counterintuitive. Depending on the economy, the housing market can crash. Then again, if there is a natural disaster, like a hurricane, these chains do well.

Home Depot had a very strong fourth quarter. Same-store sales increased 6.3 percent year over year for stores in the United States. Net earnings also rose to $1.7 billion from $1.5 billion the prior period.  Lowe’s fourth quarter was very successful as well. Its comparable-sales results were up 5.1 percent compared to the same period in 2015. Its earnings per share shot up 45.8 percent during the quarter from the prior year. This is a good sign, for the time being, for the home-improvement sector of commercial real estate. Both Home Depot’s and Lowe’s stocks are soaring. This means that retailers in this part of the industry have learned how to adapt.

When Home Depot opened its first store in New York City, it was a pretty big deal. Why would a big-box suburban retailer open in a location that arguably has the most expensive real estate in the world? It probably saw the future before the skeptics. Right now Baby Boomers, and the Millennial crowd, want to live in more urban areas. Everyone likes to talk about Amazon and how it is crushing brick-and-mortar retail. Well, if you live in a city center, which seems to be the trend, and your condo, or apartment, has an issue with your shower head, do you really want to wait around for someone to fix it? Probably not. If home improvement is doing well, it’s a sign that other sectors of commercial real estate are doing well. The industrial sector is one. Home Depot and Lowe’s obviously have a lot of real estate, either leased or owned, that involves each chain’s mega distribution centers. And, as stated above, multifamily is also obviously doing well in urban centers.  [For more: SeekingAlpha]

The post Breaking News in the Industry: March 6, 2017 appeared first on LPM.

Three MA women charged in shoplifting spree at CT outlet mall

Authorities say they have arrested three Massachusetts women following a shoplifting spree at an outlet mall in which hundreds of items of clothing and footwear were stolen. Police were called to the Clinton Crossing Premium Outlets after a store employee reported a shoplifting incident. Police found the women in the outlet’s lower level and their car was located and searched.

Police say they seized items valued at nearly $10,000, all stolen Saturday from about 13 stores.Arrested were 31-year-old Betzaida Rodriguez; 38-year-old Delia Rodriguez-Perez; and 26-year-old Sheyla Orengo. The women, all from Springfield, Massachusetts, are charged with larceny and conspiracy to commit larceny. They’re each being held on $5,000 bond. It wasn’t immediately known if they’re represented by lawyers.  [For more: NBC Boston]

Florida is #1 for fraud complaints in 2016

The state of Florida received 269,000 complaints of fraud as part of the 3.1 million nationwide, according to a report from the Federal Trade Commission. Most of the reported fraud incidents occurred over the phone (77%) as opposed to email communication (8%). According to the FTC, a majority of the fraud complaints involved debt collection scams and incidents of credit card fraud.

The Sunshine State also ranked in at No. 2 for identity theft complaints. News 96.5 WDBO’s Clark Howard said a likely cause is the insecure technology used by debit cards. He recommends always using a credit card when possible. “The only time that I ever use a debit card is to withdraw money from an ATM,” Clark explained. “It’s possible that an ATM will be compromised, but I’ve greatly reduced the chance that I’m going to end up with a compromised card and have my own checking account emptied out.”  [For more: 96.5 WDBO News]

Branding firm Gordon Brothers snaps up Wet Seal for $3M

Global restructuring, investment, advisory and branding firm Gordon Brothers topped a stalking horse bid from Canadian apparel retailer YM last week with a $3 million bid at teen apparel retailer Wet Seal’s bankruptcy auction Thursday, according to a press release. Judge Christopher S. Sontchi of the U.S. Bankruptcy Court in Wilmington approved the purchase, The Wall Street Journal reports.

Gordon Brothers, a 100-plus year-old Boston-based company, says it will “rebuild and reposition the brand and develop a unique new business model to best position it for future success,” according to a statement from the company’s president of brands, Ramez Toubassy. A brand acquisition that could lead to some kind of licensing deal was a likely outcome for Wet Seal in what was its second bankruptcy in just over two years, Jasmin Yang, an associate attorney at law firm Snell & Wilmer who has helped several clients in various aspects of bankruptcy and restructuring, told Retail Dive in January.

“I think there is some goodwill, and I think one of Wet Seal’s most valuable assets would be their trademark, just as with American Apparel — their intellectual property,” she said. “If someone were to buy it and enter into a licensing agreement with a Target or a Walmart, that might be a strategic and creative use. It’s probably not valuable enough to sell to fix all their problems, but licensing is definitely one creative solution. The way teenagers shop is just different now.”  [For more: RetailDIVE]

Is your data breach response plan good enough?

Response plans rarely survive first contact with the enemy. That is why it’s important to stress test your incident response plan to identify weaknesses while time is on your side. Studies show that a swift response to a security incident retains customer trust-and saves costs. Breaches contained within 30 days of discovery cost an average of $2.61M, according to the Ponemon Institute. If it takes more than 30 days to contain the breach, the average cost increases to $3.52M. But speed can’t be mandated by the plan. For this reason, plans should be stress tested on a semi-annual or annual basis, as if you were experiencing an active data breach.

Here are three recommendations to make the most of your stress testing exercises.

Focus on the most likely scenarios
You’re more likely to encounter ransomware via a phishing email than a dedicated nation-state penetrating your firewall. As such, focus your stress test on the scenarios that are most likely and threaten the worst potential consequences. By the time you work your way down to less-likely and less-costly threats, you’ll already have covered the common elements of your response. Knowing how to adapt your plan to a specific threat is an expertise unto itself; one that won’t emerge naturally in the planning phase.

Make it more than a technical exercise
By the time Target alerted its customers about its historic breach in December 2013, several days already had passed. The delay impacted consumer faith and the retailer’s bottom line, and was a consequence of Target’s leadership treating the breach as a purely technical issue. Non-technical staff, such as legal, public relations and human resources, should participate in stress-test activities, too. Try to strike a balance between internal staff, who may be more familiar with the company, and external specialists, who have expertise and can take on extra work.

Apply lessons learned
The true benefit of a stress test is the analysis following the experience. The whole point is to make improvements to your plan by responding to what went wrong and reinforcing what went right. Your breach response plan should include time for the incident response team to reflect and discuss the exercise. Additionally, ensure that any of the team’s recommendations are reviewed and implemented within a specified timeframe.

The benefits of organizing and testing your incident response plan could far outweigh the costs. Factor in the peace of mind your C-suite and response team will gain when they feel confident in their plan, and we believe you’ll arrive at a compelling argument to place stress tests near the top of your to-do list.  [For more: InsurancePost]

Catch up to the future of credit card fraud with our FREE Special Report, Credit Card Fraud Detection and Prevention: Lessons on Credit Card Skimming, e-Commerce Scams, and Theft Investigations.

New study says few consumers penalize companies after data breach

About a quarter of American adults reported that they were notified about their personal information being part of a data breach in the previous year. However, only 11 percent of those who have ever been notified say they stopped doing business with the hacked company after the event occurred, according to a new RAND Corporation study. The findings are from one of the first examinations of consumers’ experiences with data breaches and the impact it has on their relationships with the companies that lose their personal information.

The RAND survey found that among those who remembered receiving a data breach notification at any time over their lifetime, about 44 percent said they were aware of the hack even before they received notification. About 10 percent discovered the breach by identifying suspicious activity themselves. Surprisingly, 62 percent of consumers reported they accepted offers of free credit monitoring. This counters claims made by others that consumers are experiencing “breach fatigue” — where consumers become desensitized to the notices and either discount them or ignore important information contained in the notices.

The three main reasons for declining such offers were the time and effort required to register for the service, concerns about the hacked company or the breach notification service, and whether the offer duplicated services the victim already had. While most states have laws requiring that consumers be notified of data breaches, three states, Alabama, New Mexico and South Dakota, have no such legislation. Survey participants in those three states reported lower rates of having ever received a data breach notice as compared to people from states with notification laws, although the difference was not statistically significant.  [For more: Knowridge]

Downtown Minneapolis Macy’s store sells for $59 million

The selling price on the Macy’s store in downtown Minneapolis was $59 million in cash. Macy’s Inc. said Wednesday it completed the sale to 601W Cos., a New York real estate investment firm. The longtime department store location on Nicollet Mall will be redeveloped into office and retail space after it closes this month.

“As a part of our overall real estate strategy, Macy’s has been investigating the best possible use for this property, especially given the large amount of unproductive and unused space on the upper floors,” said Jeff Kantor, Macy’s chief stores officer, in a statement. “We have talked with a wide variety of partners in pursuit of a plan that would create the most value for the company and the community, and are pleased that the new owner intends to invest substantial capital to repurpose the building.”

In January, Macy’s publicized it plans to close the store and almost 70 other locations across the country after it reported weak sales. The store’s closure in late March will signal the end to more than a century-long history of department stores at the site at 700 Nicollet Mall that many Minnesotans still nostalgically remember from its time as a Dayton’s department store. The property was re-branded as Marshall Field’s in 2001 and Macy’s in 2006.  [For more: Star Tribune]

Retail Cyber-attacks Down In Q4

According to a new report from content delivery network and web security firm Akamai Technologies Inc., cyberattacks against retailers were on the decline in the fourth quarter of 2016, though that doesn’t mean retailers were free from major security events during the holiday season. Here are some of the key findings.

Akamai analyzed web security data between Nov. 22 and 29, the days surrounding Thanksgiving, meaning the start of the holiday shopping season in the US and likewise the peak time for criminal activity online. First, Akamai Technologies found that web application attacks declined 19 percent year on year in the fourth quarter of 2016.  “The biggest sales season of the year usually signals a marked increase in the number of attacks for all customers, especially retailers,” said Martin McKeay, senior editor of the Akamai report and senior security advocate. “Many merchants breathed a sigh of relief at not being attacked during their most important shopping days. [But] that’s not to say everyone got off without some stress.”

Akamai found that the United States was the largest global target for cybercriminals in the fourth quarter of 2016, with 28 percent of cyberattack volume. The US was followed by the Netherlands, with 17 percent; Germany, with 9.2 percent; and Brazil with 5.5 percent. The United States was also the most prolific source country for web application attacks in the quarter, according to the report. However, these numbers were also in decline — falling 53 percent year on year in the US. By retail segment, the study found that there were four primary categories that contributed to the spike in cyberattacks around the start of the holiday shopping season — apparel and footwear, commerce portals, consumer electronics, and media and entertainment.  [For more: PYMNTS]

The post Breaking News in the Industry: March 7, 2017 appeared first on LPM.

Data analysis is all about answering questions. To properly develop the questions, you must first identify your enterprise’s opportunities to increase profitability. Second, you need to identify the specific data needed to answer these questions. Finally, you must determine the tools and loss prevention software resources you can use to turn that data into actionable information to resolve the opportunities.

Develop the Questions. Increase in profitability is always the goal of any enterprise. Opportunities reside in breaking up organized retail crime (ORC) rings that are having a heavy impact on shrinkage and item availability across your business. Improving safety protocols to reduce internal and external injury claims would avoid payouts. Upgrading loss prevention software to improve workforce efficiency and productivity would result in reductions to labor cost centers. How do you resolve these opportunities? The specific questions can be limitless, but the answers are almost always contained in your data.

Find the Data. Once you have determined your questions, you need to find the data to answer them. Look at every level of your enterprise and understand all of the data being collected and how it can possibly morph into information that can answer your questions. You may find that the human resources department has data that can help with your efficiency and workforce productivity. There is also information in logistics, point-of-sale, and inventory databases that could help. You must look at a variety of sources to gather sufficient data to answer your questions.

When collecting your data, you must be proactive and diplomatic at the same time. Snooping around in databases often is met with resistance, for good reason. Information security, proprietary secrets, HIPAA, and a whole host of other factors may create a discussion as to why you may want access to the data. Make sure you have clearly defined goals, ensure that you have proper oversight while examining, and be patient but politely persistent.

Find the Tools. Now that you have formed the questions and identified your data, you need to aggregate the data in a methodical way and turn it into actionable information. This is the most difficult part of the data analysis process. We have all sat at a desk trying to make the link between transaction data, inventory data, suspect data, tips, and video images to resolve an ORC group or an internal case. And we have all conducted analysis of cycle counts and physical inventory with multiple databases and applications open on our laptops to try and find out why our numbers are off. There is loss prevention software out there to help aggregate and analyze data to answer your questions.

A great loss prevention software platform designed for data analysis should be able to:

• Instantly access and view all relevant databases through one interface.
• Graphically create relationships between data and build a case for the answers to your questions.
• Create multiple graphs of the information for better understanding.
• Accept and analyze social media and hashtagging.
• Use facial recognition of stored photo and video images as well as run actively against live CCTV feed.
• Be flexible in allowing specific modification to loss prevention system needs but also to any need in your enterprise.
• Not change or alter your data in any way.

All of these points are key to getting the capital expenditure toward DA loss prevention software. You can actually prove value in purchasing DA software by showing that it can accommodate any department in the enterprise, not just LP. And the fact that software only looks at data and does not affect the data in any way will give you greater access and buy-in from IT and other stakeholders.

Check out the full article, “Data Analysis: The Key to Good Loss Prevention and a Great Career,” to learn more about extending the life of your investments and improving profitability through data.

The post Loss Prevention Software and Data Analysis appeared first on LPM.

Virginia French

Listening to loss prevention leaders discuss their relationships with information technology (IT) departments and offer advice for strengthening them can seem a bit like eavesdropping on marriage counseling. There is admission of a “love-hate” dynamic, occasional hand-wringing over who gets final say, and counsel to “listen, don’t just talk” and to “see things from their perspective.” There is a critical difference, however. No matter how uphill the battle, divorce is never an option.

Loss prevention needs IT. More functions of retail security than ever depend on support from technology departments. LP needs IT permission to put technology solutions on the network and increasingly relies on IT for access to the data and the optimization of IP technologies to effectively perform their function. “I simply can’t do my job without them,” explained Virginia French, an investigator at Brinker International, whose brands include Chili’s Grill & Bar. French says she needs her IT partners to provide timely access to a variety of data sets, so she can keep pace with the latest employee fraud or theft scheme. “My job is absolutely crippled if I can’t get the data,” she said.

High Stakes

As more loss prevention technologies migrate to the network and LP increasingly plays in IT’s sandbox of data, IT departments have become indispensable to loss prevention and asset protection (AP) functions. We rely on them for both the implementation and success of asset protection systems and to fully realize the value that our departments can provide our companies.

Thomas Smith

Macy’s, for example, has been aggressively pursuing big data projects for years, and tapping into it has been a focus of its AP and LP departments, according to Thomas Smith, systems and technology manager in Macy’s asset protection division. “Within the data systems they maintain is all the return information, all the transaction info, and all the marketing information. So we’re looking at all this data and thinking about how we can use that in AP and with our own analytics to make us more efficient and identify issues we haven’t seen before,” said Smith. It’s already had a payoff. Macy’s recently closed several major refund fraud cases, organized retail crime cases, and major insider thefts by digging deeper into its data—with a key assist from IT.

As with access to data, network technology drives reliance on IT. “Our relationship with IT really started in earnest with the move to IP cameras and adding them to more than 500 locations,” explained Joe Darnell, manager of loss prevention administration for

Joe Darnell

Retail Business Services at Delhaize America and its Food Lion and Hannaford brand stores. “For years, we only needed IT to network our DVRs, and that’s not that hard. But when you’re putting every single camera on the network, with every device named, and making sure ports are available and standardizing the system, the relationship with IT became that much more important.”

Clearly, the stakes of effective collaboration with technology departments are extremely high. So how’s it going?

Extremely well, if you ask loss prevention executives. In a national security survey on the question, LP pros rated their level of cohesion with technology departments significantly better than security counterparts in other industries. Case in point: fewer than 4 percent of loss prevention executives rated their alignment with IT as particularly weak, a score of 1 or 2 on a 5-point scale (see Table 1).

Table 1.

But that’s not to say there aren’t challenges and potential pitfalls. Talking with IT isn’t always easy. Cultural and operational differences may exist and act as barriers to effective collaboration. Priorities and project timelines are often at odds. Setbacks occur and can be triggered by even small events like the departure of key personnel. “It’s happened that I’ll work with one person for a long time and educate them to the point where they finally understand the urgency we have and how employees are thinking and stealing, so they are intuitive on their end about the data I need as an investigator,” said French. “And then they leave. And I’ll have to teach LP to IT all over again to someone new.”

Tom Meehan

Even IT has limits to its bandwidth, according to Tom Meehan, CFI, director of technology and investigations in the asset protection department at Bloomingdale’s. “In an omni-channel retail environment, IT departments today have their hands in everything—it’s a true resource challenge. When they say they don’t have time, they really don’t. They are truly dealing with everything a retailer does.”

LP Magazine spoke with a dozen leaders in the LP industry, and they seemed to unanimously agree that understanding and avoiding the potential causes of disconnect between IT and LP is as critical as any management challenge facing LP pros today. So what’s the secret to a happy marriage?

The Right Approach

For loss prevention to successfully team with technology departments on, say, a new IP camera roll out, it’s vital to approach them respectfully. Demonstrate an appreciation for their resource challenges and their concerns regarding network security—and certainly don’t arrive at the table spoiling for a fight.

“I think LP and IT can be unnecessarily adversarial at times because they’re expecting the relationship to be contentious,” said Bloomingdale’s Meehan. But for LP and IT to be good working partners, LP has to come looking for a true partner, he suggested. “Imagine you’re going to do an interrogation and someone from IT comes in and says, ‘This is how we’re going to do it.’ That approach just doesn’t work.”

Christian Romero

Christian Romero, data privacy and protection associate at the Technocracy Group, says LP managers may need to recalibrate their perception of IT for partnerships to flourish. He warned against holding onto an us-versus-them mindset and the perception of IT as “the guys that are always saying no” and act as roadblocks to your LP projects. “Oftentimes with LP, we will ask, ask, ask—and LP is not giving. It has to be two-way, give and take, to demonstrate, ‘I understand where you’re coming from,’ and to be open and receptive to new ideas,” advised Romero.

The proper strategic approach to IT collaboration could also require checking your ego at the door, suggested several LP leaders. Your LP project may be important to you, but it is almost certainly not the most important thing that your IT department is working on. “In any retail organizations today, where the focal point is technology, there could be 100 projects already in the works that are more important to the business. And when you come to the table you have to appreciate that,” said Meehan.

Necessary Skills

Romero, who worked in loss prevention at Neiman Marcus for ten years before making the jump to IT security as its director of security intelligence, thinks LP needs to boost its technology acumen in general. “In my experience, the biggest obstacle to effective collaboration is the lack of technical knowledge on the LP side,” he said. LP executives compound the problem when they try to fake it, he added. “Where LP people get in trouble is when they try to use technical jargon without really understanding the technology. You can lose credibility pretty quickly,” he warned. Meehan offered similar caution. “You have to be up front about what you don’t know,” he said. “There is no sense in trying to pretend you know something that you don’t.”

In terms of addressing the knowledge and skill gap, one fix will need to come at the industry level, Romero suggested, with LP certification programs becoming more IT-centric in their content. Internally, if a loss prevention team lacks the necessary depth of technical knowledge, you may need to cede some control. “You have to acknowledge limitations and instead focus on better articulating what you need to accomplish in LP and identifying your non-negotiables,” said Romero, “And then LP pros have to rely on IT guys and trust that they can do the job.”

Personal skill development is also critical according to Smith, who has worked in asset protection for twenty years but has only one year under his belt in his role as systems and technology manager at Macy’s. “I’ve always been a bit of a systems guy, but now I’m learning how much more there is to know.” Smith said he’s aggressively educating himself about technology tools and data resources that will allow him to be both a better partner and to better exploit IT resources to assist loss prevention.

Skills building have also been a focus for Joe Darnell. “I’m not an IT expert, but I’ve worked to learn enough of the language and develop enough expertise to know what information IT is going to need, so I can I bridge the gap between the LP team and IT.”

Mike Wiley

Several experts identified the importance of this bridge—and of having personnel who both have the skill to act as a liaison between IT and LP and are strategically positioned within the retail organization to permit them to serve effectively in that role. When Mike Wiley came on board with Walmart, where he serves as director of asset protection point-of-sale programs, a dedicated resource within IT was already in place to help manage asset protection projects, something he mentioned is a must-have. “Having a dedicated IT resource assigned to AP is a step that I would encourage any asset protection leader to take—and it shouldn’t be a shared resource with another department,” said Wiley. “IT departments at large retailers are huge, and you need that dedicated liaison within IT, that person you can call and discuss projects with and not have it be a different person every time.”

Scott Glenn

Scott Glenn, JD, LPC, chief security officer at Sears Holdings, suggested that AP-IT collaboration is facilitated—or not—by how skill sets are organized within a retailer’s organizational structure. “We actually have a mini IT team that works within the AP department. We also have a larger team offshore working for us but with an indirect reporting to the IT department.” Those connections help ensure that AP at Sears Holdings has a voice when projects arise, such as the recent conversion of some data systems to Amazon’s web service. “Without the partnership and collaboration of our personnel in common, we’d be at the mercy of the IT team,” said Glenn. “Instead, we’re in a position to partner on ways to enhance and improve usage of new systems.”

Recruiting with IT collaboration in mind is another way to build an LP team that can work with—and extract value from—the IT department. “I look for folks with a skill set that shows they can speak that language. It’s really about understanding how intricate and complex the technology work is,” said Wiley. Acumen is also critical at the field level to keep pace with uses of technology. In today’s tech-heavy LP environment, you need some understanding “of how the clock works and not simply what the time is,” said Wiley.

A Platform for Execution

It’s difficult to identify universal best practices for developing and implementing LP projects in concert with IT, according to experts. Every retailer is set up slightly differently to accept new work, invest in new technology, and manage projects—and the best way forward is necessarily resource- and system-dependent. For example, whether the LP team sources and selects an LP technology solution or the IT team takes the lead will reflect the resources of the two departments, the size of the project and company, and whether additional departments are involved.

At Sears Holdings, for example, which is in the process of implementing updated network switches on DVRs—enhancing resilience in the event of a power failure with dynamic IP addresses—it was up to AP to develop and present IT with conceptual but realistic options. But it was IT that was tasked with the details of assessing if the project was technically feasible, how to implement it, and how to maximize the project’s cost effectiveness. An IP camera project at Food Lion stores was somewhat similar, according to Joe Darnell. IT set the standards; LP researched choices, narrowed the field, and gave IT its preference; and IT made the final choice. Although one size can’t fit all, it’s still instructive to consider the strategies that LP executives say they have found effective in bringing LP projects to fruition.

Get comfortable working within the IT project framework. Romero believes it’s critically important for LP to understand the intricacies of how its technology department works and to bend to that structure. For example, he noted that IT projects tend to be planned further out than projects in LP, which may get a capital expenditure for the current year and want to see an immediate roll out. “But IT may have projects planned out for the next year or sixteen months,” said Romero. “Being a good LP partner is about being proactive and saying to IT that ‘this is on the horizon; put a brick in for me,’ and to adjust from there.” Similarly, Romero advised adjusting your project strategies to align with IT’s project management process, such as whether they use a waterfall management approach, which is a sequential design process in which progress is seen as flowing downwards through the many phases from conception, through design, to testing, implementation, and maintenance. Your success working on projects with IT will depend significantly on the extent to which you are comfortable seeing projects the way IT views them, he suggested.

“Be strategic in your asks,” said Macy’s Thomas Smith. It’s important to recognize when the time is ripe to bring a project to IT, which requires “understanding their requirements and limitations and timelines, and where your project will likely rank on their project list,” he continued. Walmart’s Mike Wiley said that effective LP leaders understand their retailer’s project priorities and act accordingly to get their project on the docket—a point echoed by Bloomingdale’s Tom Meehan. “You have to understand where your project fits in with others the business is conducting and to know what issues they are dealing with,” he said. “So when you sit at the table, you can anticipate what their challenges and concerns will be.”

Prepare to address IT’s concerns and answer their questions. It’s fairly basic high-performance teamwork stuff, said Meehan, but LP executives need to assess potential LP projects through the prism of IT’s needs and concerns. To start, “Ask them, ‘What are the things you need? What’s off-limits? What technologies are you just not comfortable with?’” Then, more specifically, ask questions of your project—“Are you asking at the right time? Do you understand the network load of what you’re asking for? Is it a potential security risk? Are you sure?”

Don’t let loss prevention vendors drive the security debate. Meehan warned against brushing aside the concerns of IT over the security of LP projects and suggested trying to demonstrate that you recognize the legitimate risk of bringing in a new vendor. “Every vendor comes in and says, ‘We’re in this store and this store,’ but all those stores have been breached, and some of the victims of the bigger breaches have never fully regained credibility,” said Meehan. “That’s why my team takes the lead in doing risk assessment, and we don’t let vendors drive the discussion in this area. And then also go to IT to see what else you need to do to assuage their concerns,” he suggested.

Stay completely engaged as projects move ahead. Wiley warned against stepping aside as projects move into the build phase as things can easily be sidetracked and reshuffled. You may need weekly or even more frequent interaction to drive them through to conclusion. “It’s important to anticipate that other high-impact projects may arise and move ahead of yours, but having a contingency plan in place up front when that impact happens is key. Will your resources be reassigned? And now where is your project in the deployment status?” When that happens, however, it’s imperative to “stay engaged and to ensure operations, IT, and AP executive leaders are aware of and support that reprioritization, but if they don’t, you’re giving them the time needed to lean in and help reprioritize, if necessary.” A different high-impact project may move to the front of the line, “but that doesn’t mean your project needs to fall to ‘sometime next year,’” said Wiley.

Frequent Communication

The skill with which LP communicates with counterparts in IT directly impacts the effectiveness of collaboration and shouldn’t be taken for granted, experts warned. “If that dialog is not there, then you won’t be successful,” said Romero. “Even with something that is relied on heavily, like email, meanings can be lost in translation; issues can be misinterpreted.”

LP may also have to accommodate, and avoid misinterpreting, different personalities. IT professionals often differ in mannerisms from their colleagues in LP, something to consider when trying to make headway with them. “Some folks in IT are more introverted. They’re often not the guys who tend to jump up and down and scream in objection,” explained Meehan. “Often, they may be more mild in their dissent, but that’s just the way they make their objection. LP can’t confuse what they’re saying with how they’re saying it. You have to appreciate that personality piece,” he said.

It helps to be transparent and direct, according to Sears’ Scott Glenn. He believes that doing so has helped his department get past any residual mistrust technology leaders may have held about asset protection’s use of its network. “In terms of vision and strategies, we’ve found it critical that there be no secrets about what we’re trying to accomplish and to help them understand how we utilize the data we need for investigations. This way, they have the assurance that we’re not going to use the systems improperly,” he said.

Several experts cited the importance of forging personal alliances with counterparts in IT, and it may help to cast a wide net, according to Macy’s Thomas Smith. “For me, being new in my role, partnering has meant doing a lot of outreach, even searching the company directory and doing some cold calls. Telling them, ‘Here is what I’m looking to do,’ and asking if they can help, and if not, can they point me in the right direction.” The strategy has worked, said Smith. “With our size, there are more than fifty flavors of IT leaders, and I’ve found many that have been more than willing to help us.”

For Brinker’s Virginia French, education has been an important part of communication. She said the data she needs to conduct theft investigations changes frequently, alongside implementation of new software, technology, programs, or business tools. So she invests heavily in educating IT in the LP function, so they can more easily anticipate how her needs may change. “Sometimes we need a lot of register data, check-level data, or to identify coupons applied to specific transactions—really granular information and often at the last minute,” she explained. “So I make an effort to describe LP to them and to educate them. Because when they understand the bigger picture about what LP does, they more easily understand the data I need.”

Finally, good communication must extend beyond person-to-person rapport. Several LP experts cited relatively high turnover rates in their company’s IT departments, which means personal relationships may come and go. Procedures, protocols, and value creation persist, however, and can provide an enduring foundation to the IT-LP partnership.

The original process at Delhaize America, when a Food Lion camera wasn’t working or some other part of the system wasn’t functioning, involved notifying a third party who would then report the incident to IT. “The main problem with this process was not all of the details were being captured by that third party. All the details weren’t being included. So IT didn’t have everything they needed to fix the problem,” explained Darnell. A more formalized IT-incident ticketing system has since been implemented. LP opens up a ticket and is guided through a series of specific questions depending on the type of problem, including when the device or system was last working, how it’s supposed to work, what steps the LP team has already taken in an effort to fix it, and necessary technical information. “It clarifies things, streamlines the process, and speeds up the process to fixing it,” said Darnell. “Without it, it can become like a volleyball match, with the two sides going back and forth collecting the different data that is needed to address the issue.”

At Walmart, Mike Wiley said the AP department works closely with their IT partners in initial planning stages to build out specific requirements covering many of the details regarding the project build and how alterations to requirements might be made. Changing requirements after a build, without any contingencies for that, is extremely difficult. “If you happen onto a business need and you want to change something once the build is underway or completed, you may pick up the phone and have a conversation and assume all is well only to find out that you didn’t follow the rules or get the change request into the project on time,” said Wiley. “You should still always try to make it right, but understanding and appreciating that your IT partners have processes to follow and budgets to keep in-check—just like you do—usually results in more forethought and participation in the requirements discussions phase.” Wiley added that it’s critical to get clarity up front on change request matters to avoid miscommunication once the project is well underway.

Sears’ Glenn said that communication lines with IT are more likely to remain open when AP can show embedded value into the DNA of the company, and it acts as a hedge against turnover at the top of the IT department. “In the past few years, we have worked with several CIOs,” he said. “So you better have a good, well-vetted use case for what you want to get done. It’s important, so you don’t find yourself having to reinvent the wheel.”

An Expansive View of the Relationship

A final piece of advice for improving LP’s relationship with IT—identified repeatedly by LP experts—is to enlist others in the collaboration. Working effectively with IT—and pushing LP higher up their priority list for projects—is made easier when you have the backing of front-end operations, management, and other key departments.

Virginia French, for example, has taken strategic aim at “getting management to respect the interaction that LP and IT need to have and the time the two departments need to work out potential problems and issues.” For example, a new loyalty program or a new tabletop payment system creates a whole new set of scams that LP needs to plan for. If management is sensitive to the need for LP and IT to collaborate on such a rollout, LP may gain critical time to plan, she suggested.

Mike Wiley says the AP department’s relationship with IT has benefited significantly by partnering closely with the front-end operations team. “Being as aligned as possible with your business partners, for example the front-end operations team, is important because an aligned AP/operations team can present the ROI and benefits from many viewpoints—sales, service, loss mitigation, risk exposure reduction, compliance, labor savings, and the list goes on,” said Wiley. “Being joined cohesively with your business partners should give you an advantage, add credibility to the overall project need, and improve your chances of elevating the priority of your projects with your IT team,” he offered.

Tom Meehan made a similar suggestion to his industry peers. “You need to understand your business needs before you go to IT, and that frequently may mean going to other departments before you go to IT. There are lots of players—it’s not usually just an IT-LP collaboration.”

It helps if the LP team sees itself as part of the larger business whole, according to Thomas Smith. “One of the big things at Macy’s is that we’re not in silos; everyone has their hands in everything,” he said. “That global business mindset helps us in LP forge the partnerships we need to get things done.”

Finally, several LP executives noted that they’ve used outreach to other departments not only to push joint projects higher up on the agenda of IT, but also to arrive at bigger, better, and more expansive technology solutions than ones they had initially identified. One expert shared the example of an LP department that wanted a virtual network to segment its cameras from the store’s network. And because partnering was a core mission of the LP group, it became aware that an engineering group had been investigating a similar network setup for its own purposes. The technology team was then able to put it all together—providing both groups what they needed by combining the two projects—and saved money by doing so.

The post Building an Unbreakable LP–IT Bond appeared first on LPM.

These are clearly turbulent times in retail. How people shop is changing—and with it the strategies employed to attract and retain customers. Store technology is changing, offering new opportunities, and ushering in new risks. What does the upheaval mean for loss prevention? What are the primary challenges the industry may face this year, and how might we rise to meet them?

For perspective and input into where 2017 may take LP, we turned to executive leadership from three leading retail solution providers to help identify some common themes. Participants included Rod Diplock, CEO of Controltek; Steve May, CEO and president of LP Innovations; and Patrick O’Leary, vice president and general manager of the Americas of Nedap Retail. Not shockingly, our conversations were interesting, insightful, and struck similar chords with each other.

Was there a key trend or development in 2016 that you think will drive the loss prevention agenda in 2017? Or might something new steal LP’s focus in the year ahead?

DIPLOCK: In one word—connectivity. Steve Case, the founder of AOL, once said that to say that something today is Internet-based is the same as saying that it’s electricity-based. Being Internet-based is a default for almost any technology today. I think the same will be the case with connectivity in a few years when it comes to LP systems. Today, a standard EAS system goes “beep” when something goes out the door. A connected EAS system can communicate with the surveillance video to capture that event for easier investigation. This requires connectivity. Taking it another step further, an RFID system does all of the above and also tells the LP team that a pair of blue Levi’s in size 34 left the store and communicates that to the inventory management system. Due to budgetary constraints and some technological limitations, many retail enterprises can’t make an immediate leap into this kind of future. But I think it’s time to start thinking about and planning for a day when all LP systems will be interconnected.

MAY: The retail industry will continue to undergo a seismic shift, and everyone in loss prevention—and anyone engaged in retail—will be challenged because of it. It’s similar in significance to 2008 to 2009, when the failure in the macro economy had a huge impact on retail and store closings; only this time the challenges are being driven by the shift away from brick-and-mortar stores and the acceleration of online sales. Just look at Amazon. They conduct one-in-three retail transactions. They have 360 million products. That has a tremendous impact on retailers, including how to shift to online, cutting costs, and maybe store closings. I’m not sure when we’ll realize an equilibrium between brick-and-mortar and online, but we’re not there yet. We’re in the middle of that dramatic change, and all retailers will be challenged to deal with it, and that’s going to have an enormous impact on every discipline—merchandising, finance, as well as loss prevention. It’s going to affect everything we do in LP because it alters everything about how a retailer operates. And this is really unique because unlike an economic crisis where things eventually return to normal, after this shift there is no turning back.

O’LEARY: I think the key trend is definitely the advancement in omni-channel retailing. Although omni-channel was certainly not developed in the last year, more and more organizations are finally starting to understand all of the necessary components that need to be synchronized in order to play in this space. For example, RFID Journal recently published an article revealing what some of us already knew—that omni-channel cannot work without RFID. There is no other tool on the market that can manage inventory like RFID technology.

As you look over the risk landscape in 2017 and consider the many challenges currently facing LP, which of these do you think the industry is least prepared for or perhaps not giving enough attention? In other words, are there any areas where you think LP might need to step up its game?

DIPLOCK: I don’t think it’s so much about LP stepping up its game as it is about thoughtfully continuing its game. Every year there are new challenges, and at the same time there are emerging technologies that offer new promises. But one of the basic functions of LP never goes away, and that is fighting shrink. As an industry—and I mean both on the retail and solution provider side—we have to be careful not to get distracted by every new thing that comes along. We should always keep in focus what’s proven to be effective and continue to drive it. Take EAS for example. It’s neither new nor sexy, but it has proven to be effective over several decades of use. Why neglect it by completely refocusing on a promising new technology that’s still just a promise? I don’t suggest that we should not innovate or take calculated risks on new things. On the contrary, we should; but at the same time never forget the primary function of LP or neglect the proven tools and strategies that help us get the job done today.

MAY: First, accept and embrace the shift in retail. There will be pressure on everyone as a result of a realignment of budgets across the board. We’re seeing reduced budgets because of the shift to online. One of the major challenges is how do you manage within new resource allocations and still be effective in meeting today’s challenges? For example, how do you deal with organized retail crime with a cut in budget? There has been a lot more visibility and understanding of ORC, but what if you’re now challenged from a resource perspective? How do you advocate effective solutions without those resources? It’s going to have to be a combination of an intelligent use of resources and enabling technology. Another concern is employee fraud. It’s still a major component of loss in retail, and the great shift to online will cause additional uncertainty and stress among store personnel, which may cause additional pressure on employee fraud. People always look for a justification to commit fraud, and I’m anticipating this uncertainty in retail is going to provide it for some.

O’LEARY: Again, I think the answer here surrounds omni-channel. The truth is, LP professionals need to be fanatically involved within every aspect of what omni-channel retailing offers. Most retailers are playing in this space, but few have mastered it. The challenges are complex, and when any part of the complex omni-channel machine fails to function, oftentimes its LP who is looked to for answers. When customers decide to buy online and pick up in a store (BOPIS), they expect the item to be there. But when it isn’t there, everyone is looking at LP for an answer. At that point, it’s too late. The damage is done. Some of the most successful companies ingrained in the omni-channel way of business have their LP executives involved at the onset. LP professionals have a way of identifying risks of loss before they occur, so having LP involved at the beginning will allow an organization to plug the holes before a customer becomes disappointed and a brand is damaged.

Technology advancements are coming fast and furious. As you look at the year ahead, do you see technology reshaping retail or loss prevention? If so, how?

DIPLOCK: No matter what new technology is widely adopted, I believe it will be predicated on its ability to create data. The creation, moving, sharing, and using of data in retail is going to continue to be one of the most important adaptations in our industry. Now, while the technology will help capture the data, it’s the people who will need to interpret and make decisions with that data who will make a real difference in their enterprises. So when it comes to how technology will reshape retail and loss prevention, I strongly believe it will force all of us to get better at understanding which data is most meaningful in our decision-making and then becoming skillful at using that data to achieve the business objectives.

MAY: Anything to do with inventory control is going to be a key technology. When you can integrate GPS, Bluetooth, and RFID for insight into products as they’re manufactured, sold, potentially returned, or diverted on purpose or because of fraud—these are the technologies that retailers need to invest in. These technologies are finally maturing and getting smaller, less expensive, and showing great promise. The challenge is managing investment in those critical technologies and using it to improve sales performance with the right inventory at right time with an integrated approach that benefits the entire organization.

O’LEARY: Absolutely. Look at what Amazon has done with Amazon Go—no line, no checkout, just grab and go. Technology will always continue to change, and that change will reshape retail and create new challenges for loss prevention. The opportunity for the LP role to advance and become more ingrained in the retail landscape is greater than ever today. In my opinion, loss prevention needs to be proactively involved in all areas of the business, and not just when there is a problem. They should be involved in all areas of the business through building positive relationships with leaders in merchandising, operations, human resources, and even accounting, so they can be at planning meetings for nearly all new company initiatives.

There is a lot of industry talk about changes in retail strategies to drive revenues. One of these, for example, is to offer more engaging in-store experiences and events to entice customers to return to brick-and-mortar stores. Do you see any emerging retail strategies impacting loss prevention?

DIPLOCK: Many industry professionals I talk to understand fully well that LP cannot operate in a silo. So they are increasingly placing an emphasis on building partnerships with other departments in their organizations. I think this is the key to being able to take on the expanded role of not just preventing loss, but also helping drive more top-line business. Having good relationships with other stakeholders helps LP understand what it can do to help merchants and operations, while at the same time helping their peers understand the value of LP and what they can do to help LP do its job. Along the same lines, I think it’s crucial to network with LP professionals from other companies through industry organizations and think tanks to share experiences and ideas.

MAY: Across the industry there has been a significant effort to focus on enhancing the customer experience to drive repeat business. One example is return policies, where some retailers have created a policy to make it difficult to make an exchange, while others have taken the opposite approach to allow customers an easy experience, which may have more fraud attached to it. There needs to be a balance. An LP executive can’t advocate making returns as difficult as possible and not think about the need to enhance guest services. We need to work more closely with those that are part of the process of enhancing retail experience and be willing to be more creative in our approach to the fraud issue.

O’LEARY: We will continue to see more and more strategies implemented by retailers to bring customers into their brick-and-mortar locations. The key will be to make sure that when the customers come in, the product they are looking for is available. If all inventory within retail was accounted for, there would be no need for loss prevention as we know it today. At its core, LP is really about inventory management. No matter what changes may come to any retailer’s strategy, the protection of inventory will always be the cornerstone of that strategy. Simply put, a retailer cannot sell off empty shelves. And no matter what type of in-store experience you offer if the product is not on the shelves, it won’t matter. LP professionals need to excel at building relationships. There is no technology, no new retail strategy, or no new widget that will change that. Loss prevention is about educating the executives and employees on what causes loss and risk of loss and finding ways to entice them all to adhere to the controls put in place to protect assets. That can only be done with buy-in from the C-suite all the way down to the store employees. That takes highly effective relationship-building skills.

When we take look back at 2017, what do you think will be the year’s big story in loss prevention?

DIPLOCK: The big story might be this—“Again this year, not everyone followed the Ten Commandments.” I say this half-jokingly to emphasize the point made earlier that no matter what the actual big story ends up being, the need for loss prevention will not go away since thieves will always think that actually “thou shall steal.” This might not be a bold prediction, but keeping this in mind is what keeps my team and me focused on driving new creativity to help retailers. At the end of 2017, theft and loss in retail will continue to be a major problem that we will have to continue to address.

MAY: I think we’ll have seen some real winners and losers both among retailers and among LP leaders. Unfortunately, there will be some who don’t adapt to the great shift going on, who don’t react effectively to resources challenges, and who insist on doing things the way they’ve always done them. If you’re an LP director working for a challenged retailer that is closing stores and comps are flat, you have an obligation to help create the most profit you can. You can’t just sit back and hope it passes. You have to become a true partner in profitability, take some leadership, and take some risk. It’s the LP leaders that adjust to the new reality—and examine how to reapply resources in more effective way, work with different partners, find new solutions, and help drive profitability—who will be the winners. It’s retailers and LP pros who are unwilling to try something out of the box and just hope that things don’t get worse who will be the losers. Doing nothing today is a prescription for failure.

O’LEARY: I think the big story will be how winning retailers embraced RFID technology in ways that allowed them to service their customers the best. Just a few months ago, Macy’s announced plans to have 100 percent of all items in every store RFID-tagged by the end of 2017. What does Macy’s know that other retailers do not? Perhaps they just decided to be one of the first to do what they feel needs to be done to service their customers better than their competition. I predict the big story will not only be Macy’s success in this endeavor, but also how many other retailers followed suit.

The post The Year Ahead in LP appeared first on LPM.

We have new CCTV cameras, but now what? This is the type of question we often hear. For example, do we primarily want the CCTV devices to deter offenders, detect attempts, or document them for trial and planning, or some combination? This distinction is huge because each CCTV use objective can mean slightly different camera form factors and deployment tactics. And to cost-effectively reduce crime and loss, we really have to get it right or at least close. The fancy term for this in policing and medicine is dosage and diffusion. What we do, not just that we do it, is critical. We’ve got to engage with the asset, the space or place, and of course the offender. But how do we best do this? What are some evidence-based methods?

The Why Is Important

Before we do something, however, it is always important to think about and know, via evidence, why we’re doing something. Why do we want to deploy this tactic? What do we expect it to do? How will it do this? How does it really work in the field? We call this a logic model.

We take a pain reliever to relive a headache because multiple randomized controlled trials demonstrate consistent efficacy. Further, how the medicine works to relieve pain—its mechanism of action or MOA—has been repeatedly identified. Doctors know not only that it generally works but also how it works to relieve pain.

Here is ibuprofen’s MOA according to “PharmGKB Summary: Ibuprofen Pathways” by Mazaleuskaya and others in a 2014 edition of Pharmacogenetics and Genomics: “The main mechanism of action of ibuprofen is the non-selective, reversible inhibition of the cyclooxygenase enzymes COX-1 and COX-2 (coded for by PTGS1 and PTGS2, respectively). Of the two enantiomers, S-ibuprofen is a more potent inhibitor of COX enzymes than R-ibuprofen, with a stronger inhibitory activity at COX-1 than COX-2 in vitro. COX-1 and COX-2 catalyze the first committed step in the synthesis of prostanoids–prostaglandin (PG) E2, PGD2, PGF2alpha, PGI2 (also known as prostacyclin), and thromboxane (Tx) A2–from arachidonic acid. Arachidonic acid is released from the cell membrane phospholipids by phospholipase A2, PLA2, encoded by PLA2G4A (cytosolic, calcium-dependent) and PLA2G2A (in platelets and synovial fluid). …”

We certainly don’t need nor will probably ever have such a scientifically derived MOA, but as the loss prevention experts for our employers, we should have a good understanding of how an investment we want to make will actually do what we say it will. And we need to know how much of our LP solution to deploy. For Advil, a brand-name ibuprofen, the standard adult dosage is one tablet by mouth while symptoms persist, not to exceed six tablets in 24 hours, unless directed by a doctor.

The How Is Important

What, how, where, how much, how often, and how long we do something really matters. Our team suggests you consider several dosage dimensions when you’re looking to deploy a protective action:

• Active. How do we do this, what does it look like, who should do it, how many do we need, and what else should I do to make this work better?
• Spatial. Where across my chain, and where on my property?
• Temporal. When do I deploy and for how long? And how often do I change things up?

In this column this year, we’ll continue to discuss our findings on what works better than other options. We have new research findings around what, how much, where, when, and who—in other words, dosage.

Working Groups Make Us Go

Loss Prevention Research Council (LPRC) working groups are the primary way the organization supports retailer member improvement. Working groups get multiple retail experts, solution partners, LPRC staff, and others together monthly to set and discuss priority research and development needs and findings. Here are some key points followed by a list of the groups themselves:

• LPRC’s eleven working groups focus retailers, solution partners, and scientists collaboratively on specific crime and loss control problems.
• LPRC members enroll their corporate and field team members into all their priority working groups to simultaneously provide company LP/AP process improvement and individual professional development.
• Retailer experts drive the working groups’ outputs by working group leaders setting group priorities, running the monthly group calls, webinars, and field trips, and making the working group part of their regular work efforts. Each group strives to generate two to four actionable project reports annually.
• The working groups also meet at the annual LPRC Impact conference to discuss the year’s work and projects and to plan for next year’s output.
• The LPRC board of advisors working group committee checks in quarterly with all working group leaders and monitors at least one call to assess the groups’ focus, member experience, and work output.

Product Protection Working Group

Team coleaders: Adam Hartway, Digital Safety; Corrie Tallman, Walmart; Brianna Betts, CVS
Current members: Verizon, Best Buy, Office Depot, Price Chopper, Target, Walgreens, Loblaw, Sam’s Club

Data Analytics Working Group

Coleaders: Scott Pethuyne, Justice; Kyle Grottini, CAP Index
Current members: Walmart, Meijer, dressbarn, Bloomingdale’s, Loblaw, Ralph Lauren, Target, Office Depot, REI, Price Chopper

Video Solutions Working Group

Coleaders: Justin Taylor, TJX; Jeana Pantoliano, Bloomingdale’s; Hedgie Bartol, Axis
Current members: Price Chopper, Walmart, Office Depot, 7-Eleven, Publix

Supply-Chain Protection Working Group

Leader: Kevin Taparausky, TJX
Coleaders: Mike Combs, Home Depot; Shannon Hunter, Office Depot
Current members: Target, Luxottica, Tractor Supply, Best Buy, 7-Eleven, ULTA Beauty, Publix

LP Innovation Working Group

Coleaders: Tom Meehan, Bloomingdale’s; Stacie Bearden, Home Depot
Current members: Target, Tyco, AutoZone, Price Chopper, Ralph Lauren, Verizon, Macy’s, REI

Organized Retail Crime Working Group

Leaders: Denny Dansak, Kroger; Tony Sheppard, CVS
Coleaders: Abe Gonzalez, Bloomingdale’s; Shane Hunter, Walmart
Current members: Publix, Walmart, Ahold USA, Walgreens, Target, Best Buy, Home Depot, Tractor Supply, Lowe’s, AutoZone, Verizon, T-Mobile, Macy’s, eBay, DICK’s Sporting Goods, Luxottica

Violent Crime Working Group

Leader: Kevin Larson, Kroger
Coleaders: Basia Pietrawska, CAP Index; Russell Hinds, Walmart; Mike Aldridge, 7-Eleven; Nolan Bomar, Publix
Current members: Rite Aid, T-Mobile, Walgreens, CVS, Target, Location Inc., General Growth Properties, Best Buy

Retail Fraud Working Group

Leader: Sean O’Brien, Target
Coleaders: Tom Meehan, Bloomingdale’s; Graham Twidale, 7-Eleven
Current members: Walmart, CVS, Macy’s, Ahold USA, Justice, Walgreens, DICK’s Sporting Goods, Office Depot, Kroger

LP Strategic Partnerships Working Group

Leader: John Doggette, Lowe’s
Coleaders: Karen Sinning, Walmart; Andrea Guthrie, DICK’s Sporting Goods; Maria Acosta, Zip Ed Tech
Current members: Toys“R”Us, Best Buy, Tractor Supply, Home Depot, Bloomingdale’s, Ascena, Cracker Barrel, CVS, General Growth Properties, Kroger, Luxottica, Publix, REI, Rite Aid

Food and Drug and Health and Beauty Care Action Team

Coleaders: Kevin Larson, Kroger; Ben Friedman, Walmart; Jim Cosseboom, Ahold USA; Scott Ziter, Price Chopper; Renee Micek, Avery Dennison
Current members: Walgreens, CVS, Publix, Target, Best Buy, DICK’s Sporting Goods, Luxottica, Meijer, Tractor Supply, REI

Specialty Retail Action Team

Leaders: Millie Kresevich, Luxottica; Miguel Merino, Ralph Lauren
Current members: Sterling Jewelers, AutoZone, 7-Eleven, ULTA Beauty, Verizon

Summits

LPRC and the University of Florida (UF) are conducting some upcoming gatherings to explore and set research and development priorities. These include the Baltimore/DC Corridor Robbery and Violence Summit on Tuesday, March 21, 2017; Canada Day at the LPRC UF Innovation Lab (date to be announced); and Total Community Solution Colloquy, a law enforcement, retailer, and media gathering at UF (date to be announced).

Recommended Reading

Space, Time, and Crime (third edition) by Kim Lersch and Timothy Hart describes theory and logic models and evidence around why crime events tend to concentrate in place and time and for specific reasons. The more we know about those mechanisms, the more precise our protective actions to affect specific mechanisms or variables.

The post Getting the Dosage Right to Stop the Pain appeared first on LPM.

Food Marketing Institute (FMI) and National Retail Federation (NRF) will partner on PROTECT in 2018, according to a live joint announcement made at the Audit, Safety, Asset Protection conference in Orlando, FL. The two associations will combine their existing risk and safety signature events into one cross-industry gathering starting in 2018.

The association executives for each group offered the following statements about the future of their working relationship and meeting the specialized needs of loss prevention, risk and safety, organized retail crime investigators, risk management, and retail operations professionals:

FMI President and CEO Leslie G. Sarasin said, “Respecting the changing grocery landscape and the intense consolidation our industry has witnessed over the last several years, our trade groups are making similar strategic decisions to maximize efficiencies and deliver greater value to the audiences we serve. Our partnership with NRF on PROTECT 2018 will afford our food retail members the opportunity to expand their horizons, network in a larger sphere and get at the root of what they seek to do best – mitigate risk.”

NRF President and CEO Matthew Shay said, “Securing retail brands, assets, people and profits is the essence of PROTECT’s brand promise. We are enthusiastic to amplify the sphere of influence of this gathering and ultimately help deliver the resources and information necessary to safeguard, prepare, protect and defend the nation’s commerce streams.”

More information about PROTECT in Dallas on June 11-18, 2018 will be forthcoming at this year’s NRF PROTECT event, which will be held at the Gaylord in Washington DC, June 26 -28.

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How can retailers minimize their exposure to store theft from career criminals, both effectively partnering with law enforcement and prosecutors and ensuring convicted offenders do not return to steal again?

Loss prevention organizations have struggled for decades to protect retail locations from thieves who understand the difficulty of apprehension and prosecution that all too often is viewed as a “minor” offense. One solution provider has developed a comprehensive service working with retailers that identifies offenders, builds a “case in a box” for law enforcement, and follows the offender through the judicial process and even after incarceration with ongoing deterrence communication.

ALTO is expanding their programs into the United States that began in 2003 and have proven successful with major retailers in Chile, Columbia, Mexico, and Spain. Currently over 7,000 retail locations in more than 100 cities are achieving lower shrink and increased revenues while enjoying a safer environment for their customers and employees.

Karl Langhorst, CPP, CFI, a well-known US retail loss prevention executive, most recently the corporate senior director of loss prevention at The Kroger Co., was recruited to lead the ALTO initiative in the US as their executive vice president.

“I am delighted to help my peers in US retail implement an innovative strategy for dealing with the significant problem of external theft in their stores,” he said. “ALTO is committed to changing the face of loss prevention in North America with a comprehensive collaborative program that combines proven technology and processes that will assist retailers and law enforcement combat the ever-growing trend of retail crime that negatively impacts our society.”

Expert Board of Advisors

As part of that commitment, ALTO has enlisted the assistance of some notable experts in loss prevention, criminal law, and law enforcement to serve as their board of advisors to assist the company with their entrée into the US retail market.

Bill Williams, recently retired as captain from the Los Angeles Police Department where he commanded multiple divisions including the Commercial Crimes Division, accepted his appointment to the board and said, “I believe it’s high time that ALTO came into the US market. Shoplifting and other retail crimes are a significant problem throughout the United States, particularly in California. It is my view the ALTO solution will allow retailers to better package crime investigations and assist in the recovery and retention of evidence for law enforcement and prosecutors. That, in turn, will assist in holding lawbreakers accountable for their activity.” Williams is also a founding member and law enforcement chair of the Los Angeles Area Organized Retail Crime Association (LAAORCA).

Gary Johnson, CPP, representing retail loss prevention on the board, said, “We need to find new ways to deter retail theft, which is now the leading property crime in America. We continue to view theft and fraud as not a major crime. And, if you do get caught there’s not much of a punishment for it. The successes ALTO has had in Latin America and Spain have been nothing short of astounding. Recidivism is a key metric, and looking at ALTO’s success over the past decade—a 97 percent reduction—that should warrant our full attention.” Johnson has an extensive career in corporate security and loss prevention holding executive positions at The Vitamin Shoppe, Great Atlantic & Pacific Tea Company, and Barnes & Noble. He is a past chair of the National Retail Federation’s loss prevention advisory council. He currently serves on the Loss Prevention Foundation’s Benevolent Fund steering committee.

Other board members include Louis Anemone, who retired as chief of the New York Police Department (NYPD) after a 34-year career. He has also served as deputy director of the New York State Office of Public Security and deputy director of security for the Metropolitan Transportation Authority. He is a graduate of the FBI National Executive Institute, member of the NY State Association of Chiefs of Police, and the Honor Legion of the NYPD.

Carol Martinson has corporate security, asset protection, and risk management experience in the finance, big box, discount, and grocery sectors, including executive positions with SUPERVALU, Lund Food Holdings, Target, and First Bank System. Her most recent positions include COO of Accentus-Lundus, president of International Security Design, and adjunct faculty member in the master of science in security technology program at the University of Michigan.

William Morales is a retired police detective who started his career with the Miami-Dade Police Department where he had wide-ranging experience in all areas of law enforcement including coordinating major events such as the NFL Super Bowl and MLB World Series, providing training and investigations as a member of the TOMCATS Cargo Crimes Task Force, and investigating organized retail crime with the Organized Crime Division. Morales continues to speak to companies across the country as a subject-matter expert sharing best practices to assist them on how to secure their supply chain.

Loren Naiman recently retired from the Post-Conviction Litigation and Discovery Division of the Office of the Los Angeles County District Attorney. A career prosecutor, he served as both a trial deputy and assistant head deputy in the LA County Auto Insurance Fraud Division, deputy in charge of the High Technology Analysis and Litigation Team, and assistant head deputy in the Hardcore Gang Division.

ALTO US Headquartered in Miami

ALTO opened its US headquarters in Miami, Florida, in 2016 with Karl Langhorst joining the executive team with Cristian Lopez, US country leader, to introduce the ALTO Alliance retail solution and supply-chain solution, ALTO Assurance, to the US market (alto.us).

In early 2017, well-known supply-chain asset protection expert Maurizio Scrofani, LPC, CCSP, joined the team to lead the enhancements of the company’s end-to-end supply-chain security and intelligence initiatives already in place in Latin America. Scrofani has held senior leadership roles at Macy’s, Bloomingdale’s, Delonghi, and Verisk Analytics where he was co-founder and president of CargoNet.

The post Technology-Based Strategy Fuels Collaborative Program with Law Enforcement to Prosecute Retail Theft and Reduce Recidivism appeared first on LPM.

What is the issue facing retailers regarding boosters and fences? There seems to be confusion over whether boosting or fencing goods is the primary cause of retail shrink. Is this issue one of those questions that we can break down into bite-sized pieces, make mathematical comparisons, study historical data, and reach an operationally sound conclusion? Humph! The booster-fence causal analysis is similar to the age-old question, “Which came first, the chicken or the egg?”

We may disagree on which came first in the chicken versus egg analysis, but perhaps we can determine which is the most important. However, that depends on whether you want an omelet or fried chicken. In reference to booster or fence, the question is not so much, “Which came first?” but “Is one or the other a more direct cause of retail shrink?” Would the elimination of one cause the demise of the other? Until now, the issue has been too complex to invite consensus.

Examining Pertinent Questions

How does one define the role of booster or fence? Which did come first? Did one create the other, or simply create an environment in which the other could thrive? Is the relationship born of necessity? Do they depend upon each other for existence, or is the relationship a simple matter of symbiotic utility where both find the relationship beneficial?

Let’s attempt to answer these questions.

What is a booster? A person who makes a living by stealing retail merchandise for resale.

What is a fence? A person who makes a living buying and selling stolen merchandise.

There you have it: shrinkage from external theft in retail stores absolutely occurs at the booster level with or without a fence. Doesn’t that answer the next question? Not really.

A fence can’t sell a store’s merchandise if it’s not stolen to begin with, but fences sell a variety of other contraband from many sources.

This further establishes the fact that the booster is the first step in the stolen retail merchandise “pipeline.” However, we can’t place any value on which came first, because each one operates in some aspects without influence from the other and is capable of operating with total autonomy.

Does this mean retailers should ignore everything but the booster? Of course not. We can’t ignore the increase in losses due to the relationship between the booster and the fence.

Did one cause the other to exist, or create an environment in which to thrive? The booster expands the fence’s product line, while the fence expands the market for the booster’s stolen merchandise. They complement each other’s business by providing each other the opportunity for increased volume.

Is the relationship one of necessity or symbiotic utility? They exist independently from each other. Their relationship is that of utility, mutually beneficial for both parties, although not necessary.

The role of the participants becomes clearer during detailed analysis. We must conclude that boosters are the direct link to shrink.

Examples to Consider

Too often, boosters are thought of as the smallest link in the chain of organized retail crime. The dollar amount of a single booster apprehension pales in comparison to the amount of recovery from a well-established fencing operation. But how does each one impact your bottom line? Let’s look at some actual examples of past cases.

A Significant Fence Bust. Over 200 boosters were identified selling stolen over-the-counter pharmaceuticals to an opportunistic street-level fence. The criminal organization was on the threshold of making the move to a mid-level operation. We partnered with agencies of sufficient clout to bring the fullest extent of the law against the fence. As is the case with most high-level prosecutions, the time required to complete a thorough investigation required roughly 18 months. You don’t just run down and hang a pole camera outside the criminal’s business location. It takes cooperation and networking.

During the course of the investigation, documentation was accumulated establishing the fact that the fence transported on average $140,000 per week to an illegitimate repack warehouse in the Northeast. In retrospect, we allowed $10,080,000 to be stolen. The bust was a colossal event, and the recovery of $1,700,000 set a record at the time. But what was the net loss? Not counting expenses and payroll, the figure came to $8,380,000.

What did the community lose during the same period? Well, if the tax rate was 9 percent, and if we applied that percentile to sales of $10,080,000 at retail, the community coffers would realize a loss of revenue valued at $907,200.

A Typical Booster Ring. In another example, this particular booster group stole an average of $5,000 per day throughout the duration of the investigation. If the group only worked five days a week, they caused $25,000 in retail shrink. If we extrapolate that out over 52 weeks, the resulting retail shrink in the targeted market would translate to a cumulative yearly loss at retail of $1,300,000. This booster’s profit margin averaged 20 percent on the dollar, creating a yearly gross income for their business of $260,000. The group moved the stolen merchandise themselves. Maybe they hadn’t heard of outsourcing.

The group had been on a state agency’s targeted criminal list for 27 years. Ouch! Do you think the agency focused all their efforts toward working pawn shops and fences?

Maybe if they had understood that the booster is the direct link to shrink, they would have known a link to the fence was not necessary. Maybe they would have expanded their investigation. This misunderstanding has led to the success of many booster rings.

A Second Booster Case. Some time ago, an organized retail crime investigator told us about a booster group he busted. A cooperating witness provided information identifying a group that was hitting his stores and other retailers in his area. The group was stealing over-the-counter medicines and Gillette razors, and was responsible for a daily retail shrink of approximately $8,000. The group was reported to work at their craft six days per week.

The investigator assembled a team, contacted the police in the area specified by the witness, and began surveillance on the group. His team observed the boosters hit four stores, and then called the police. The group was arrested, at which time authorities discovered that the “booster in charge” was on parole with an outstanding warrant for parole violation. Prior to this arrest, the other members of the group had no criminal records.

This investigator’s initiative and organizational skills made a $48,000 per week impact on retail shrink at stores in his area. We were flabbergasted when we learned that a supervisor made the statement, “He’s spending valuable time on boosters when he should be working the fences.”

If the supervisor’s goal is to make a positive impact on the bottom line, maybe someone should point out the fact that boosters are the direct link to shrink.

One Retailer’s Attitude. While attending an LP meeting in the upper Midwest to discuss organized retail crime (ORC) and legislation, a retailer in attendance said, “Boosters are a dime a dozen, and we concentrate our efforts on fences. Cut off the head and the body dies.”

The statement came across as overly dramatic and was a complete opposite of commodity flow. Boosters feed the stolen product into the body of the speaker’s mystical beast, not the other way around.

A successful fence will enhance a booster’s business. If the fence is well connected to an illicit repack warehouse, the booster’s share of the stolen goods market can grow exponentially, increasing the wealth of the fence in the process. Further, if the repack warehouse is well connected to an illegitimate diverter, the potential for increased profits will have a ripple effect all the way back to the booster.

The Booster’s Business Plan

Some boosters are known to have their own version of a business plan. They set a daily goal in the form of a dollar amount of theft and work hard to reach the mark. This amount ends up on their criminal P&L as tax-free profit.

There are as many different levels of boosters as there are different levels of fences. For example, a drug addict may only boost in order to supply a daily habit, but the more entrepreneurial criminals may put the profits straight into their pocket or systematically amass the wealth for expansion of the criminal organization.

Of course, most of the professional boosters use more than one fence to transform the fruits of their labor into operating cash. It’s a good market strategy, and we all know any good risk management program should include a plan to mitigate losses. The booster’s plan just happens to be based on the possibility that one or more fences might get busted. No one wants their cash flow interrupted, illicit or not.

It’s important to remember that the entrepreneurial booster doesn’t require a fence. The fence only improves the booster’s business by helping to expand the booster’s market. The addict may use the fence when the opportunity is available, but they also have the option of trading directly with the drug dealer.

Alternatives to using a fence include working fraudulent refunds for cash or moving stolen product through flea markets. Some boosters sell their stolen products over the Internet as well.

Finding the right fence is merely a plus. Put in perspective, it’s like a vendor getting accepted by a major chain—business soars.

Fencing Goods

We’ve already established the fact that the fence can exist without the booster. Boosting from stores is only one way to generate stolen property. Remember the business relationship between booster and fence is one of utility. The booster’s association with the fence benefits the booster, and the fence’s association with the booster benefits the fence. Their association will only continue as long as it benefits both parties.

Which one should we focus efforts to deter: the booster or the fence? That question makes it sound like we still don’t get it. After all, we now know that the booster causes the loss at store level that causes shrink. If the booster did not steal merchandise from our stores, the fence would make no impact on our bottom line. On the other hand, the negative impact from shrink due to external theft is made more severe if a significant fence is thrown into the mix.

The booster’s activity is much more than a crime against a company. It’s a crime against the people who make their living in retail. It can negatively impact pay and bonuses, for everyone from the stock clerk to the CEO. We’ve also seen how boosters hurt the community through the example of lost tax revenue.

Should we feel compelled to work both angles of the problem? We’d better. While it’s a fact that the booster is the direct link to shrink, failure to recognize the significant role the fence plays is a mistake we can’t afford to make.

The fence is, in no small way, an indirect link to shrink. If we do not target and work the significant fences, we lose even more. Remember, someone who is fencing goods acts as an accelerant. The increasing demand for the booster’s stolen product pumps the contraband through the pipeline. Left unchecked, the relationship of booster and fence could literally drive even more companies out of business.

The booster-fence relationship is responsible for the movement of billions of dollars in stolen property throughout the United States and internationally. With focus on global markets, continued growth of the problem is inevitable. Spin-off issues include devaluing the integrity of certain products, especially those which are date sensitive or meant to be ingested. Not all fences deal exclusively in stolen retail merchandise, but the ones that do deserve our attention.

Effective Retail Responses

Improve Procedural Controls and In-house Security Measures (Quick Solution/Temporary Results).

• Increase associate awareness and create programs that incorporate their involvement. For example, making false security calls when leaving an area to take a break or lunch.
• Make “bottom of basket” (BOB) and “look inside always” (LISA) regular topics of store meetings and awareness posters.
• Install some form of greeter program.

Tightening security through a heightened loss prevention presence is an excellent way to start, but the menace is still in the market. Sooner or later, they will adapt and change their methods in order to circumvent your security measures. This fix is hit or miss and is a continual process.

Target Individual Boosters for Apprehension (Quick Solution/Lasting Impact).

At the least, the booster network will classify your company as a hostile environment and change their choice of stores for a satisfying boosting experience. A good in-store loss prevention program can add another dimension to your loss prevention presence by providing an opposing skill set to challenge the booster’s capabilities.

The in-store LP professional, when partnered with law enforcement, can monitor intelligence on the organized booster. When supplemented by a capable corporate ORC unit, your company is ready to take the process to the next level. Working together, a company’s loss prevention assets, along with investigators from other retailers and your law enforcement partners, can make a positive impact on market profitability.

With the right support from operations, a sustained emphasis on this type of aggressive response can land the career booster in the penitentiary and out of the market entirely, thereby breaking the direct link to retail shrink.

We can’t afford to ignore the example of the booster ring that was responsible for a market loss of $1,300,000 without the benefit of a significant connection for fencing goods; or the other example where $48,000 per week no longer leaves the market. The investigator who took the initiative to react to information from a cooperating witness and addressed the issue head-on contributed the potential increase in yearly profit for the stores in that market of $2,496,000. How can we ignore that?

Educating Law Enforcement, the Industry, and Legislators (Long-Term Goal/Progressive Results).

We must consider several long-term goals that will ultimately have a positive result for the entire retail industry, as well as the communities we serve.

Educating Law Enforcement—For the past several years, retailers have worked within the law enforcement community to educate those detectives involved with property crimes. Seminars on organized retail crime have been held from California to New York to Chicago and Miami. These efforts allow the participants to share goals and information and to lay the groundwork for developing partnerships and networking.

We invest substantial amounts of time educating the officers involved with property crimes, but what about the front-line officer who comes in contact with the booster on a daily basis? How many times have we heard a uniform patrol officer talk about stopping a vehicle that had all kinds of duplicate retail property in the back seat, but they had no idea it was from booster thefts?

Educating the Industry—Retailers can be a hard sale. The profit margins are sometimes narrow and their focus is on sales, as it should be. Operations executives have the tendency to leave issues of retail shrink and ORC to the loss prevention department. With 98 percent of the company’s human resources working in sales or sales-supporting departments, it’s easy to understand how 50 percent of the company’s loss only gets two percent of the company’s effort. We can have the best sales figures in the industry, but if the percent of profit isn’t there, investor confidence deteriorates and the end is inevitable.

The problem lies in the fact that the industry’s shrink from ORC represents a conservative figure of 15 billion dollars annually. This money comes right off the top of company profit columns on the corporate P&L. Large sales figures can mask the problem for a while, but once you look past the percentage points and focus on the dollars, you can see the need to refocus attention on the total business. One of our weakest endeavors as an industry may be our failure to educate our own folks regarding organized retail crime and its impact on retail shrink.

Educating Legislators—Our involvement in the development of the first retail loss prevention legislative team in history was an eye-opening experience. There was a glaring need to document the difference in a simple “shoplifter” who stole a candy bar and the career criminal “booster” whose primary source of income was stealing retail property for resale. The team’s purpose was to write bills that target:

• The sale of stolen property at flea markets,
• Those who use devices to defeat EAS systems, and
• Those who use instruments in creating UPC and bogus receipts.

The team continued targeting several other types of retail crime until finally writing the major bills that create organized retail crime statutes.

Legislative change continues to be of utmost importance. If we are to be successful against ORC, it’s imperative that we have crime-specific laws.

Legislative changes like the third-strike law have made a huge impact on criminal punishment for boosters. Better understanding of the severity of ORC lowers resistance to prosecution and fosters a mindset that can readily accept the need to increase penalties at the individual booster level as well as the fence.

Legislative change is just one of the tools needed to address these issues. We have recognized the importance of area coalition websites and distribution lists. Working together through coalitions that link retailers and law enforcement can improve the distribution of information pertinent to real-time ORC issues. One such organization is the Coalition of Law Enforcement and Retail (CLEAR), which has a board of directors evenly representing both law enforcement and retail. Formed in 2008, the association is currently headed up by Curt Crum, CID Special Services Manager of Forensics and Victim Services and Organized Retail Crime with the Boise City Police Department.

The Ultimate Goal

By using all the tools at our disposal, we can continue to impact the various levels of organized retail crime. We can make the occupation more difficult and less rewarding. Sooner or later, with the help of enhanced legislation, the career criminals will land in prison as habitual offenders.

Loss prevention’s goal must include taking the lead in educating all their partners on the issues of organized retail crime. We must break both links to shrink—the booster as the direct link and the fence as the indirect link to shrink.

This article was originally published in 2010 and was updated March 30, 2017.

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The retail supply chain network is a critical component of the retail machine. While many may view the heart of retail as the interactions and events that happen within the store, this support system has always fueled the way. Through a complex web of processes and activity, a well-managed supply chain is essential to a successful retail operation.

Merchandise doesn’t magically appear on the shelves of our stores and into the hands of our customers. When we consider that every single piece of retail merchandise must in some way pass through the retail supply chain network, it’s easy to see the need to implement appropriate controls and protect our interests as product moves throughout the network and ultimately makes its way to our customers.

For seasoned loss prevention professionals, the importance of sound retail supply chain policies and practices is nothing new. However, expanding our understanding of this essential aspect of the retail enterprise is something that we all can benefit from, and puts us on common ground as the industry moves forward.

The role of loss prevention across the retail supply chain has grown considerably in recent years. The advancements in technology, the evolution of e-commerce and omni-channel retailing, and the mounting sophistication of retail crime will continue to revolutionize our role throughout the supply-chain network.

As this role grows more complex, our approach to the entire process must evolve as well. As a critical element of our overall programs, this function is much more sophisticated than making sure that receiving doors are locked, cargo is secured, and logs are signed. That image and mentality must change to reflect the true nature of the management process within the retail supply chain.

Managing a Process

Supply-chain management encompasses the planning and management of the many activities involved in sourcing, procurement, conversion, and logistics management for the business. It involves planning and processing orders; handling, transporting and storing the products purchased, processed and/or distributed; and managing the inventory of goods in an efficient and coordinated manner. The primary objective is to fulfill business demands through the most efficient use of resources. By maintaining control over inventories and distribution, the retail supply chain seeks to match and manage supply with demand to reduce costs, improve sales, and enhance company profitability.

Efficient and effective retail supply chain networks are necessary to successfully compete in the global retail market. It rests on the loss prevention professional to take the necessary steps to gain a better understanding of the overall supply chain process and how the process impacts the business so that we can effectively support shrink reduction and profit-enhancement efforts.

In terms of understanding, even the term “retail supply chain” can be viewed as a misnomer. This is not merely a seamless link of interconnected, proportional pieces that takes us from a point of origin and leads to a single ending destination. It is a sophisticated, interdependent network of positions, processes, facilities, functions, responsibilities, tasks, transport, and technology that all culminates with delivering products and services to our customers.

From a loss prevention management perspective, our attentions must focus on disruptive risk. As described by one industry leader, “Assuming the enterprise has taken the necessary precautions to ensure product quality, integrity, and safety, the primary risk to any organization posed by the supply network is disruption. Any disruption in production or delivery will result in potential lost sales, decreased revenue, margin erosion, and profit loss.” These risks can exist at each origin location, at each intermediate location through which the product travels, and along each transportation link between points.

Companies must design operational plans that will serve to identify potential threats; evaluate how, when, and where they may occur; develop effective approaches to mitigate losses; and build programs that improve efficiency and business recovery. Theft is a primary consideration, but specific risks will vary depending on a variety of factors specific to a unique supply-chain network. The potential risks must be identified and analyzed at each point along the network, building the plan that serves as the cornerstone of retail supply chain resiliency.

But where do we start? What are our greatest risks? How do we determine where to focus our attention and resources? These are just some of the questions facing our industry leaders as we access the risks and construct our plans.

Where Does Your Supply Network Begin?

The first step of this process is to secure the products that we wish to offer for sale. As retailers, we want to offer quality products, obtain the appropriate quantities of product balanced with customer demand, get those products in the hands of our customers as quickly as possible, and manage the entire operation through the most economical means. Where the product is coming from can significantly impact each of these key management variables.

The point of origin for our products could involve a vast array of sources from across the world, and through different channels depending on any number of factors that might influence supply, demand, purchasing, and product movement. Does the product have to pass through customs? If the products are manufactured internationally, are the products flown in, or does the product pass through our ports system? Are climate or weather issues a consideration? Are there political, labor, regulatory, or other business considerations?

A host of issues must be managed to simply secure the products that we wish to offer for sale, each of which can impact the success and profitability of the entire business, and each of which can pose potential points of risk. Even before the product is owned, such risks can impact supply, product costs, and other factors that can directly influence the business.

Yet while the point of origin is important in setting a foundation, it is the point where we establish ownership that is a critical determination. This not only establishes the right of proprietorship, but also the assumption of responsibility for the products. With the current complexity of the world trade market, the actual point where we assume ownership of products can be determined in many different ways, and at different points depending on specific contract negotiations and other factors.

Ownership determination will vary from company to company and in some instances may even vary depending on the particular product. But at the point where we assume ownership, are we getting what we paid for? Is it the correct quantity? Is it the correct product? Is it the correct price?

International Security Concerns

Another primary point of risk is found when goods cross international borders. Customs is responsible for controlling the flow of goods into and out of a country. Generally speaking, imported goods may not legally enter the United States until Customs and Border Protection has authorized delivery of the goods.

Officers may inspect cargo before it is loaded onto vessels at a foreign port destined for the United States, while in transit, and at the first port of entry where the goods arrive. Inspectors may board ships, planes, rail cars, and trucks in order to thoroughly inspect shipments. The goal is to achieve a sufficient level of security without jeopardizing the efficient flow of legitimate commercial trade at the border.

The process is critical for many reasons. However, potential challenges can result from the inspections process. Inspections can cause substantial delays, product damage, spoilage of perishable items, and compromised shipment integrity that may lead to other loss prevention concerns. Transportation costs can increase when containers sit at the ports waiting to be cleared. Regardless of the circumstances, there are costs, and risks, and protocols that must be managed. If the process is not managed properly, our risks increase, leading to shrink concerns, lost sales, lower profits, and customer service issues.

C-TPAT

Unfortunately, some risks extend beyond product loss, theft, damage, or like issues, and carry the potential to create much more impactful considerations. The Customs-Trade Partnership Against Terrorism (C-TPAT) is a voluntary government-business initiative designed to build cooperative relationships that strengthen and improve both international supply chain and US border security.

The C-TPAT initiative asks businesses to ensure the integrity of their security practices and communicate similar guidelines to their business partners throughout the international supply chain. These principles have been adopted by the World Customs Organization and the international trade community, and similar programs are being developed and implemented worldwide. All ultimately have the same primary goal—to stop abuses of commercial trading lanes by terrorists and others who seek to corrupt the process.

The premise of C-TPAT is fairly simple—if a company has well-conceived and appropriate internal controls in place, they can enhance the likelihood that their products will arrive on time, intact, and without dangerous or unwanted goods substituted for the products that they expected to receive. This requires stringent internal controls regarding facilities, personnel, retail supply chain procedures, computer systems, and other critical functions not only at US facilities, but all over the world. Importers are expected to partner with foreign suppliers and worldwide business partners to secure their supply chain and ensure that internal controls are adopted and implemented.

Risks In-Transit

The temptation for thieves to attack goods in transit dates back to the days of piracy and highwaymen. The reason is simple: goods in transit are the most vulnerable to predation. Retail merchandise moves fairly anonymously across the nation’s roads, rails, and highways, through jurisdictions with varying resources and differing abilities and/or willingness to prosecute if and when individuals are apprehended. As a result, cargo-theft incidents are rarely given high priority when compared to other types of crimes.

Deterring these losses, therefore, mandates attention to security and loss prevention practices, strong operational controls, cooperation among participants in the retail supply chain, and a variety of investments in safeguarding cargo security. But it also requires enhanced awareness. For retailers moving goods attractive to thieves, paying attention to in-transit product and loss prevention management should be a fundamental part of doing business. This isn’t as simple as a box falling off the back of a truck, and shouldn’t be perceived that way. Such incidents can be highly sophisticated operations that can be dangerous as well as financially devastating.

As the retail supply chain grows more complex, so does the criminal element that leeches off of our legitimate business. One of the biggest challenges involves organized retail crime (ORC) and the potential disruption that can result. ORC incidents can occur at any point along the retail supply chain, whether at the point of manufacture, on loading docks, rail stations, distribution centers, or potentially anywhere along the transportation route. Thefts can range from smaller, subtle quantities that are part of larger shipments to aggressive, armed hijackings involving entire truckloads of merchandise.

ORC groups will take advantage of practically any opportunity to steal product that is vulnerable to theft and will potentially produce large profits. Thefts are often preplanned, highly coordinated, and well-executed. Many operations are managed to the point that they know exactly what they are targeting and have the ability to move, reload, and redistribute stolen goods within hours. The stolen goods may be moved quickly to a warehouse, off-loaded, repackaged, re-manifested, and placed on another vehicle—often before the theft is discovered by the company or reported to the appropriate authorities.

In-Transit Methods

Members of organized groups have for decades stolen full and partial shipments and/or loaded trucks while they were in transit. These incidents can occur in a number of different ways. For example, many hijacking incidents occur while a driver is away from the truck, such as at dinner or on a break, and thieves simply break into the vehicle and drive off with the goods. In other instances, hijackers will target a vehicle and forcibly enter the cab while the driver is in the vehicle. Freeway on and off-ramps, rest stops, and other common stopping points are particularly dangerous.

Another common method is to coerce the driver into making an unplanned stop by having someone gain the driver’s attention while they’re driving. This individual may falsely inform the driver that something is wrong with their vehicle or may use other persuasive tactics to convince the driver to stop the vehicle. Once the driver pulls over and the vehicle stops, accomplices arrive to steal the rig.

A technique favored by ORC groups targeting trucks or containers loaded with high-tech and high-value merchandise is the “grab and run.” Often traveling in vans or similar vehicles, they follow a targeted vehicle, waiting for the vehicle to stop. Once the rig stops, several individuals will forcibly break into the cargo area and off-load as much product as they can. This is also a common technique used when employee vehicles are used to transport valuable goods, such as jewelry, from one store to another.

Deception is another common method. Thieves may tamper with trailer/carton seals and/or locks in order to conceal trailer break-ins, or tamper directly with the container or trailer to commit these thefts. Leakage incidents may involve the theft of entire cartons, or removing desired product from within a carton and resealing the packaging to attempt to conceal the theft. ORC groups have even used individuals who present themselves as legitimate drivers at shipping facilities, using counterfeit paperwork or even electronic shipment information in order to gain access to and make off with valuable loads.

Effective, well-planned strategies must be developed, combining the latest advancements in technology with industry best practices, robust security procedures, and fundamental loss prevention methodologies. Such practices would include enhanced awareness efforts, improved response, advanced information and communication management, safety practices, employee screening programs, and robust training programs that provide necessary and appropriate information to our employees at every step along the way.

Distribution Centers

Distribution centers are often viewed as the foundation of the retail supply chain network, establishing a centralized location from which we can stock and distribute products to the stores or directly to customers. While designs and functions may be similar, each facility is also unique based on the organization, the types of products, and the special needs of the business. These complex operations can house volumes of merchandise, equipment, supplies, and employees in order to meet and maintain our primary business objectives.

While often viewed as simply a project-specific, labor-intensive venture, the actual mission of the distribution center operation is strategic and tactically calculated. Coordinating the concurrent needs of the stores, our customers, suppliers, buyers, inventory control, transportation systems, and other services and service providers is a formidable task to keep product moving efficiently and contributing to our companies’ profits.

“Today’s distribution center can house thousands of SKUs, with some of the larger facilities managing the inventory for several hundred stores in a single location,” said one industry expert. “Teams must ensure the accountability of the freight at all times throughout the product cycle, to include accurate receiving protocols, proper storage of the freight in its designated location, cycle counting, and order pulling and shipping of merchandise to the correct location.”

This isn’t simply an exercise in moving boxes from one site to another. This is about product flow and speed to market, driving replenishment, maximizing sales, and maintaining quality customer service while minimizing losses, damage, and theft of goods. All of this requires cutting-edge loss prevention management, with progressive programs that build on modern technologies and supply-chain management strategies and design. Every function, process, and practice must be continuously reevaluated to help control costs and maximize efficiency.

Depending on the company, a retailer may purchase and sell tens of thousands of products. Goods typically arrive in bulk and are stored in the distribution center until needed by the retail location. Products are then retrieved and assembled into shipments before being forwarded to stores or directly to customers. Throughout every stage of the process, there are opportunities for loss.

The efficient processing of goods through the distribution center plays an essential role in the business operation. Every facility must be designed to provide for the safest, fastest, most secure, most efficient and cost-effective control and movement of our retail products, and our loss prevention efforts must complement the process. Vulnerabilities extend well beyond basic physical security measures and access controls, and we must show the same proactive, cooperative insights that have helped to build our success in other areas of the business.

DC Risks

Identifying the potential source of theft risks within a distribution facility are typically not hard to determine. Access to the facility is managed. Activities within the facility are controlled. In the stores, there is public access to the building. However, this is clearly not the case in the DC environment. In plain terms, the most likely way for theft activity to be successful in our distribution centers is if employees are involved.

Often, the greatest opportunities for losses in the distribution center involve collusion between multiple parties—especially between drivers and the employees that load and unload trailers. Merchandise within the distribution center is at its greatest risk when trucks are being loaded and unloaded, which is a time frame that is particularly chaotic with individuals largely concerned with emptying or filling the trailer and getting the truck away from the dock. With attentions focused on labor and speed, employee interest can be diverted, leading to enhanced risks and greater opportunity.

The possible infiltration of our associates by organized criminal groups is also a threat within the DC environment. Perpetrators may gain access through temporary agencies when services are needed, such as during peak selling seasons. Employees with ORC ties may simply hire into the company in order to gain access to merchandise, information, and opportunity. Existing employees may be recruited by ORC operations to participate in illicit activities. Individuals who hired in with honest intentions may also observe and exploit opportunity, and make poor life decisions as a result.

While the direct theft of merchandise is an ongoing concern, the theft or disclosure of information can be just as problematic. Shipment and product information, seals and seal sequences, delivery schedules, truck routes, and other relevant information can be divulged to assist with hijackings and similar operations. Blank forms may be pilfered to create fraudulent documents. Alarm information, CCTV placement, internal layouts, rosters, schedules and shift changes, and other important operational information may be shared or exposed. Additional actions may include intentionally damaging or blocking CCTV or other security equipment, removing batteries from alarmed doors, leaving outside doors or security enclosures opened or unlocked, purposeful distractions, or simply looking the other way. Any and all opportunities may be exploited depending on the complexity and motivations of those involved.

Establishing a Culture

The retail supply chain network demands control to drive efficiency and productivity. Setting the tone early and often by maintaining direction and enforcing rules sends an important message and helps establish a culture of safety, control, and honesty. This is why the fundamental aspects of loss prevention provide such an important barometer of program success. Failure to control basic support functions is an indicator of greater opportunities which in turn can significantly influence the scale of involvement throughout the entire network.

Creating and implementing policies that serve to establish workable controls is an important step. But this must be coupled with appropriate resources to support the control measures as necessary, to include adequate attention and staffing. Programs must be regularly reviewed and monitored to ensure effectiveness, efficiency, relevance, and application. Most importantly, this must have the support of all levels of management, to include implementation, maintenance, enforcement, and resolution.

Finally, as an industry, we must improve our knowledge, awareness, and education regarding the entire retail supply chain network. Programs such as the supply chain course within the LPC certification coursework provide a tremendous resource. But we must also open more effective channels of communication with subject-matter experts, especially those within our own organizations, to gain a more comprehensive understanding of this critical aspect of the retail business.

As emphasized by one industry leader, “Within our industry, there is a tendency to place the roles of loss prevention in the stores and in the retail supply chain in very different buckets. However, closer inspection defiantly puts things into a different perspective, as these roles are often much more similar than they are different. I would encourage each of you to pause for a moment and reflect on some of your dealings with your fellow loss prevention peers who work in the supply chain. If you haven’t already done so, take some time and get to learn more about this aspect of the business. If possible, look for opportunities to do some cross-training in these partner departments. Make the effort to expand your professional horizons. These lessons will go a long way in building relationships and adding value your organization and your future.”

For some, this may open the doors of opportunity that lie within the supply chain for growth and development. For others. it may serve as a simple reminder of a side of the business that doesn’t always hold our full attention. For all of us, it should serve as a notice that the role of loss prevention is expanding, and we have a definitive responsibility to keep pace.

This article was first published in 2014 and updated April 5, 2017. 

The post Keeping Pace with the Global Retail Supply Chain appeared first on LPM.

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.

Results from 2016 National Retail Security Survey (NRSS), which were released during the National Retail Federation’s (NRF) PROTECT conference in June 2016, report that inventory shrink accounted for 1.38 percent of retail sales, or $45.2 billion, in 2015. In addition, more than 48 percent of retailer participants reported an increase in inventory shrink 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. This is the second sequential year that shoplifting has surpassed employee theft as the largest contributor to inventory shrink in the United States.

The annual retail crime survey put forth by the British Retail Consortium reports that the costs of retail crime in the UK reached £613 million (~ $763 million USD) in 2015. Theft by customers reportedly accounts for nearly 83 percent of that cost, with an average value of goods stolen climbing to nearly £325 (~ $404) per incident.

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. The report also found that the average loss of dishonest employee cases dropped from $1,546.83 to $1,233.77.

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 originally published in 2016 and was updated April 5, 2017. 

The post Shedding Light on Retail Theft Statistics appeared first on LPM.

A first-of-its-kind international retail theft prevention conference was held March 9–10 at Tokyo Big Sight, Japan’s largest convention and exhibition center. The event featured subject-matter experts from the United States who offered their insights into loss prevention strategies and organized retail crime (ORC) research common in the United States to the nearly 500 attendees representing Japanese retailers, law enforcement, academia, industry associations, and technology providers. The conference was hosted by the National Shoplifting Prevention Organization (NSPO), a nonprofit group of major Japanese retail businesses, in cooperation with security solutions suppliers Takachiho Koheki and Tyco Retail Solutions.

The US contingent was coordinated by Tyco Retail, which hosted an ORC summit in October 2015 that included representatives from Japan’s NSPO. The US experts included Read Hayes, PhD, CPP, managing director of the Loss Prevention Research Council (LPRC) at the University of Florida; Claude Verville, LPC, former head of Lowe’s LP organization and now principal of Shrink & Safety Solutions; Paul Jones, LPC, previously head of eBay’s anti-fraud efforts and current COO of Turning Point Justice; Brett Detzer, director of global investigations for Walmart; and Kevin Lynch, LPC, executive director for Tyco Integrated Security.

NSPO Chairman Yutaka Takehana greeted attendees by setting the stage for two days of collaboration in support of NSPO’s efforts for launching shrink-management initiatives to combat theft in Japan. After his opening remarks, he introduced Dr. Hayes, who delivered the keynote address on the history of shoplifting in the United States and today’s challenges. Following the event, Hayes said, “The Japanese were wonderful hosts, very open-minded, and expressed interest in more collaboration with US retailers and experts.” He also observed that the Japanese retailers appear to be focused solely on shoplifting with little regard for employee deviance and online fraud. That observation was shared by the other US attendees.

The US delegation in the panel discussion are (from left) Read Hayes, Claude Verville, Paul Jones, Brett Detzer, and Kevin Lynch.

Verville presented examples of anti-shoplifting, safety, and inventory control techniques in US retail stores. “There was a great deal of dialogue about theft problems in Japan’s drugstores and bookstores, where anime books are popular theft items,” he said. “There seems to be a huge need in Japan for what the LPRC is doing for our industry here in the US. In addition, not unlike some companies in the US, they need to take a more holistic approach to shrink reduction to include operational issues and internal controls rather than focusing only on shoplifting.”

Based on his long career in loss prevention and recent experience at eBay, Jones discussed battling ORC online and how US drugstore chains are partnering to battle ORC. According to Jones, “The Japanese retailers don’t have a lot of data regarding theft. Plus, they measure theft in a different way than we do in the US. They need to develop a resource like the LPRC to help them share data.” He also presented the concept of restorative justice in the United States and expects to work with NSPO in the future on a program in Japan.

Walmart’s Detzer reinforced the idea of data sharing in his presentation on fighting shoplifting and ORC at general merchandise stores through regional collaboration with retailers. Tyco Retail’s Lynch addressed the attendees on the latest technology in retail loss prevention, including the integration of EAS with RFID, people counting, metal detection, jamming detection, and other EAS advancements.

The five Americans also sat together on a panel with several Japanese retail security experts to answer questions from the audience. The panelists shared best practices and real-world experiences in their respective countries.

At the end of the conference, Gabriel De Jesus, global director of strategic accounts for Tyco Retail Solutions, delivered closing remarks and highlighted the value of NSPO’s forward-thinking initiative to host the collaborative exchange of ideas and solutions for the benefit of retailers, law enforcement, and customers.

The conference generated a great deal of interest from the Japanese national media. In a press conference following the event, NSPO’s Takehana offered his insights on the success of this first-time event and the valuable insights gleaned from the US delegates on tangible solutions for retail theft prevention. He declared his organization’s commitment to use a more proactive and practical methodology to help effectively reduce shoplifting in Japan.

The post Five US Loss Prevention Experts Present Best Practices at Japanese International Retail Theft Prevention Conference appeared first on LPM.

Professional advancement and building a successful loss prevention career can mean many things to many different people. For some individuals it may mean reaching a top leadership position at a particular company, perhaps serving as a director or vice president of loss prevention/asset protection. For others, it may involve gaining experience in multiple professional fields in order to establish a unique and versatile role that capitalizes on all of our various skill sets. Some aspire to be the very best at a particular skill or discipline, building a base of knowledge and expertise that sets us apart from the rest. There are those that strive to leave a professional legacy, leaving a lasting mark on the present and future of the loss prevention industry. And there are still others that simply want the recognition that comes with reaching a particular level of performance and the security that it provides.

There are many different ways to evaluate our career vision and professional aspirations. But what is most important is that we find the path that fits us best. We need to fashion and follow a professional development plan that leads us forward and builds our future. Especially when involved in a profession that is evolving as quickly as retail loss prevention, career growth is essential to professional survival. Whatever our professional goals and aspirations might be; whatever skills and experiences have helped forge our personal loss prevention career path, we have to find and seize the opportunities to learn, grow, and progress.

All of us throughout the loss prevention community are proud of the accomplishments of those that have worked hard and earned a new place along the loss prevention career path. Please join us in congratulating the following individuals on their recent career moves and promotions.

April 2017

Jerrod Johnson, CPP, CPPM has been named director of global investigations & corporate security systems at PetSmart

Greg Dolcich has been promoted to loss prevention operations specialist at DSW

David Grinstead was named vice president and general manager of global security products at Johnson Controls  Click here to learn more

Chadd Cranfill, CFI was promoted to Zone Asset Protection Director at Dollar Tree Stores

Robert Sanchez Jr, CFI was named Director of Loss Prevention at DFASS Group

Adam Ennis, LPC, CFI was promoted to district manager of investigations at Macy’s

Syd Workman was promoted to regional loss prevention director – southwest for Little Caesar Enterprises, Inc.

Paul Isaacson was promoted to regional loss prevention director – midwest for Little Caesar Enterprises, Inc.

Brad Piros was promoted to national director of loss prevention for Little Caesar Enterprises, Inc.

Chadd Cranfill, CFI was promoted to zone asset protection director at Dollar Tree Stores

Ron Kornblum, CFI, CFE, LSSBB is now director of corporate security at Loblaw Companies

David Robbins is now a regional asset protection manager at Advance Auto Parts

Lee Davies was promoted to senior manager of loss prevention at Amazon

Jo Day was promoted to regional security & loss prevention manager at Amazon

Pam Copeland was promoted to area asset & profit protection manager at Sears Holdings Corporation

Paul Trickett is now a regional manager of loss prevention at TJX Canada/Winners

Robert Seaser, CFI, PCI was promoted to manager of brand risk investigations & intelligence at PetSmart

Adam Walker is now manager, corporate security and loss prevention at APMEX, Inc.

Debbie Ho is now a regional ORC manager at Macy’s

Ayoka Moss is now corporate loss prevention coordinator at Michael Kors

Oscar Rodriguez is now an area loss prevention manager at Ross Stores, Inc.

Tina Marie Knighten was promoted to senior district loss prevention manager at Sephora

Robert Chunko, CFI is now regional director, supply chain asset protection at Macy’s Logistics& Operations

Brett L. Ward, CFI was promoted to divisional vice president of business development and client relations at Wicklander-Zulawski & Associates  Click here to learn more

Colleen Dillon was promoted to area asset protection manager at Sears Holdings Corporation

Casper Sten Felding is now director of global sales operations at Milestone  Click here to learn more

Keven Marier is now director of technology business development at Milestone  Click here to learn more

Henrik Sydbo Hansen was promoted to group manager – devices and integrations at Milestone  Click here to learn more

Mikkel Winther was promoted to group manager for product management at Milestone  Click here to learn more

Jesper Lachance Ræbild is now director of product marketing at Milestone  Click here to learn more

Kim Jørgensen is now vice president, global IT and operations at Milestone  Click here to learn more

Brian McKay, CFI was promoted to district loss prevention manager at TJ Maxx

Matt Palmer was promoted to senior manager of loss prevention at The Fresh Market

Tom Sinciro is now a Regional Sales Director at Oncam  Click here to learn more

Jeff Oakie is now a Regional Sales Director at Oncam  Click here to learn more

John “JC” McKitterick is now a Regional Sales Director at Oncam  Click here to learn more

Daniel Cisneros is now a Field Sales Engineer at Oncam  Click here to learn more

Stephen Walls has a new position; District Loss Prevention Manager – Kohls (Information provided by Loss Prevention Recruiters

Michael Elliott has a new position; Managing Consultant – XBR/Loss Prevention – SkillNet Solutions, Inc. (Information provided by Jennings Executive Recruiting, LLC)

Michael Phillips has a new position; Business Development Executive – Intelliq (Information provided by Jennings Executive Recruiting, LLC)

Richard Escandon has a new position: area loss prevention manager – ULTA Beauty (Information provided by Jennings Executive Recruiting, LLC)

Misty Davis has a new position; Lead Area Loss Prevention Manager – Ulta Beauty (Information provided by Jennings Executive Recruiting, LLC)

Tom Doyle has a new position; Regional Loss Prevention Manager- – Goodwill of So. Calif (Information provided by Jennings Executive Recruiting, LLC)

John Genna has a new position; Investigator II – City of Los Angeles (Information provided by Jennings Executive Recruiting, LLC)

Fred Manzitto has a new position; Regional Security Manager – FedEx Supply Chain (Information provided by Loss Prevention Recruiters)

John Marketti has a new position; Regional Asset Protection Manager – Ralph Lauren (Information provided by Loss Prevention Recruiters)

Anthony Murguia has a new position; Regional Asset Protection Manager – BCBG Max Azria (Information provided by Loss Prevention Recruiters)

Eva Shkurti has a new position; Area Manager Asset & Profit Protection – Sears Holdings Corporation (Information provided by Loss Prevention Recruiters)

Richard Anderson has a new position; Area Manager Asset & Profit Protection – Kmart (Information provided by Loss Prevention Recruiters)

Stephen Seefeldt has a new position; Regional Asset Protection Manager – Dollar Tree (Information provided by Loss Prevention Recruiters)

David Huhner, LPC has a new position; Manager – Business Intelligence/Reporting – Sears Holdings Corporation (Information provided by Loss Prevention Recruiters)

Damien Walter has a new position; ORC Market Investigator – L Brands (Information provided by Loss Prevention Recruiters)

David Bytnar has a new position; DC Loss Prevention Supervisor – DHL eCommerce (Information provided by Loss Prevention Recruiters)

Michael Romeo has a new position; Regional Supply Chain Investigations Manager – TJX Canada/Winners Merchants International (Information provided by Loss Prevention Recruiters)

Tom Jones, CFI has a new position: partner and asset protection – Starbucks (Information provided by Loss Prevention Recruiters)

Brian Sanders is now a regional loss prevention manager at Amazon

Lucy (Agurcia) Bessell is now a district manager of asset protection at Albertson’s/Von’s

Brian Akonom, CFI, CORCI is now a regional asset protection manager at EZ Corp

Jeff Hunter is now the senior manager of asset protection – west at Under Armour

Ruben Castillo is now a district asset and profit protection manager at Burberry

Daniel Rutschke is now a district manager of investigations at Macy’s

Stephen Anderson is now a district loss prevention manager at Dicks Sporting Goods

Billy Wilson is now a market asset protection manager at Walmart

Andrew Robinson was promoted to senior loss prevention analytics manager at Gap Inc.

Greg Lavers was promoted to manager of high-tech crime at TJX Europe

Paul Isaacson was promoted to regional director of loss prevention at Little Caesars Pizza

Edouard Kane was promoted to senior security program manager – emerging markets at Amazon

Michael Sanders, LPC named vice president, fraud prevention & oversight with Santander Consumer USA  Click here to learn more

Jim Faulds named director of asset protection at Calgary Co-operative Association Ltd.  Click here to learn more

Quinby (Yost) Squire named vice president, head of asset analytics and insights with CVS Health  Click here to learn more

Randy Hamilton is now vice president of operations at USS

Sam Ross is now a territory loss prevention manager at Claire’s

Marlene (Bordonaro) Giordano is now a regional loss prevention manager at T-Mobile

Ken Keegan was promoted to director of profit protection U.S. & Mexico at The Body Shop

Anthony Bruni, CFI is now a regional manager of asset protection at Luxottica

Lauren (Elflein) Jackson is now a loss prevention investigative analyst at L Brands

Kyle Lott was promoted to area manager, asset and profit protection at Sears Holdings Corporation

Amanda Weaver is now a district loss prevention manager at Dick’s Sporting Goods

Stephen Boarman was promoted to director of central investigations and organized retail crime at Macy’s

Tim Huff was promoted to director of AP administration and operations at Macy’s

Marfrelina Melendez is now a district loss prevention manager at TJ Maxx

R. J. Anderson was promoted to area asset & profit protection manager at TJ Maxx

Christie Delaney is now a territory leader of asset protection at Ascena Retail Group, Inc.

Deanna Gunter was promoted to area asset & profit protection manager at Sears Holding Co.

Hawken Averett, LPQ is now supervisor of global asset protection at eBay

Neil O’Neill, CFI is now a district loss prevention manager at H&M

Chris Frey was promoted to senior project manager, security & loss prevention at Amazon

Tom Zaroban Jr. was promoted to regional investigations manager at Nordstrom

Paul LaBlanc was promoted to director of global asset protection at Coinstar  Click here to learn more

John Cafiero was promoted to LP Analyst at Coinstar

Amanda Bowen, LPC, is now a loss prevention investigator at Coinstar

Kevin Trimble, CFE named director of loss prevention development at Blue Dot Safes

Ryan Dzwigalski, CFI promoted to senior loss prevention manager at VF Outdoor and Action Sports Coalitions

Marty Andrews, CFI promoted to senior director of loss prevention at VF Outdoor and Action Sports Coalitions

Jake Wilson named corporate director of loss prevention at Bed Bath & Beyond

Matt Robertson promoted to acting divisional vice president of retail operations at Sears Canada

Bill Gropper promoted to associate vice president of international asset protection at L Brands

Max Walzenbach promoted to senior loss prevention manager at Old Navy

Scott Lee ll was promoted to area asset and profit protection manager at Sears Holdings Corporation

Christopher Breton, CFI is now an area asset and profit protection manager at Sears Holdings Corporation

Miguel R. Llull is now a multi-store asset protection manager at The Home Depot

Ian Hartman was promoted to director of field loss prevention for Eddie Bauer  Click here to learn more

Erik Schmidt promoted to senior regional loss prevention manager for North America and Canada for Destination Maternity Corporation

Al Robinette promoted to senior regional loss prevention manager for North America and Canada for Destination Maternity Corporation

Melanie Meschwitz, CFI promoted to senior regional loss prevention & safety manager for PetSmart

Mike Rackley promoted to senior director retail operations risk & control for Nike

Matthew Haughton was promoted to assistant vice president of corporate security at L’Oréal-USA (Information provided by Loss Prevention Recruiters)

Jeff Hunter was named director global asset protection and investigations at Under Armour (Information provided by Loss Prevention Recruiters)

To review the March “People on the Move” click here.

Many of the loss prevention / asset protection career moves and promotions are reported to us by our career advisor partners. We are grateful for their collective efforts and diligence in delivering this information. If you would like to provide information pertaining to a recent promotion or career move that is not listed below, we welcome your submissions by clicking here.

The post People on the Move: April 2017 appeared first on LPM.