Alpha High Theft Solutions

ShopliftingTricks You Should Be Aware of For Preventing Shrinkage

March 23, 2015 by Staff Editor Leave a Comment

Haven’t you heard in police shows on TV how you have to think like a criminal to catch a criminal? Well, in shoplifting prevention you have to know the methods these criminals are using to be able to protect your merchandise and your employees. There are shoplifting rings that are professional and make their living stealing. They may target a specific store or chain of stores, but they always have a plan and different people working to steal as much as they can without getting caught. The shoplifting prevention team in your store may not be aware of some of these “methods,” and being aware of them may be the difference between a profitable store or one that is constantly loosing money. For more news about this topic, follow the links below.

Suspects arrested after aluminum foil used in shoplifting

SNOHOMISH — Money-making schemes are a popular topic of conversation among the criminal community. One such scheme ended in three arrests earlier this month in Snohomish. A group of suspects was accused of working in tandem, using aluminum foil to defeat anti-shoplifting devices.

The trick is widely known among heroin addicts who pilfer goods to support their habit, Police Chief John Flood said. He credited the Nov. 2 bust at the Snohomish Station Kohl’s to increased anti-shoplifting patrols and proactive store security.
Snohomish police started seeing thieves trying the foil ruse about a year ago, Flood said. The crooks wrap bits of foil around the security tags.

Dubai shoplifters’ tricks: Cut magnetic tags

Two Egyptians, who allegedly fled with garments they stole from a shop after removing the magnetic tags, returned after 45 minutes to steal more, the Dubai Criminal Court heard.

AM, 27, truck driver and HS, 28, clerk were noticed roaming around in a well-known store by a security staff.

“I noticed two Arabs roaming around in the shop and kept an eye on them. They picked up a pair of shoes and a T-shirt and one of them entered the trial room while the other waited outside. Then the man came out of the room without the shoes and the garment.

“The two then stepped out of the shop and as the security device did not beep, I thought they had left the T-shirt and the shoes in the room,” the security staff told investigators.

However, the two returned to the shop after 45 minutes and picked up a pair of jeans, a wallet and two pair of shoes.

“One of them entered the dressing room and after they stepped out of the shop, the security gate did not beep this time too. I followed them and caught them near their car while calling police. When asked about the stolen items, they replied that they are in the car,” the security man said.

Retail Profiling Lawsuits: Businesses Would Rather Lose Merchandise Than Detain Potential Shoplifters

SAN FRANCISCO (KPIX 5) — Retailers lose $45 billion dollars annually to theft, about $10 billion of that to shoplifting.

Yet the last thing stores may want to do is catch a thief.

Chris Mcgoey knows all the tricks. He’s been in the loss prevention business for almost 40 years. On an undercover tour of a big box store he showed us how shoplifters stash things and how to pick out what he calls “likely candidates”, like women with big purses in shopping carts. Or shoppers with baby carriers.

Mcgoey admits it’s profiling. “It’s not based on race, religion, sex, age, any of those, it’s really based on behavior. But he says these days some retailers would rather lose the merchandise than detain anyone. “America is just shaking in their boots, they are scared. If you stop someone and they haven’t stolen anything you are sued.”

Earlier this year Barneys in New York paid half a million dollars to settle accusations it was singling out minority shoppers. The state launched an investigation after 19-year-old Trayon Christian sued the store for detaining him and questioning his ability to pay for an expensive belt.

Filed Under: Shoplifting Prevention Tagged With: Alpha 2 Alarm, Alpha 3 Alarm, Alpha High Theft Solutions, Anti-shoplifting training, anti-theft devices, Employee Theft, Loss Prevention Training, Prevent Shoplifting, Retail Anti Theft Devices, retail security and monitoring, security devices

The 3 Essentials for a First-rate Loss Prevention Program

March 11, 2015 by Staff Editor Leave a Comment

It’s never been more profitable to be a shoplifter. In the past it was difficult to make money from stolen merchandise. A thief commonly used a third party or “fence” to offload the product. Fencing was a secretive, high risk job and “average” shoplifters had no way to establish a connection with one. If they did have one he got a share of the profits, often the biggest cut.

But, the internet has dramatically changed this process. It allows shoplifters to function as their own fence. They’re able to eliminate the middleman and sell directly to, usually, unsuspecting people. Selling stolen goods is easier, safer and more profitable than ever before. Therefore, shoplifting is on the rise and, to stay in business, stores have to be diligent when creating a loss prevention program.

There are 3 main essentials needed for a successful loss prevention program. The 1^st and most important is proper store management. This topic is thoroughly discussed in other articles on this site. But, while vital, good management goes only so far. Ultimately, an effective plan also includes 2 other essentials – towers coupled with security labels and hard tags.

Towers are the 2^nd essential piece of a successful security plan. Checkpoint System is the leading provider of towers. Checkpoint’s towers are plastic or metal structures and are positioned on both sides of an entrance. They sound an alarm when an active Checkpoint tag or label, which is attached to the merchandise, passes through them. Many shoplifters will by-pass a store with towers and, instead, target one without them.

A 3^rd essential is hard tags and labels – Checkpoint has many types of each. Tags are applied to items such as clothing, shoes, and purses; they need a special tool to be removed. Some tags are filled with ink and will open if not properly removed. Labels are attached to things like books, DVDs, cosmetics and are deactivated at the point of sale. When shoplifters see a label or tag, they’ll often move on to merchandise that’s not so well protected.

Making a store a difficult target can keep thieves out of it, which creates a more pleasant, safer environment for employees and shoppers. Just as importantly, Checkpoint can be the difference between staying in business or closing the doors. Checkpoint System, coupled with security savvy management, can go a long way towards producing a profitable store.

Nicole Abbott is a writer and psycho-therapist with over 20 years of experience in the fields of mental health and addiction. She’s an educator, consultant, lecturer, trainer and facilitator, who has conducted over 200 workshops, trainings, presentations, college classes and seminars.

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Video Surveillance In Your Store

March 9, 2015 by Staff Editor Leave a Comment

Surveillance in your store can be a big deterrent for shoplifting and employee theft. The knowledge that your store is protected, or at least that there are cameras capturing images of employees and customers, can help you save thousand of dollars yearly. Employee theft is costing the retail industry millions of dollars every year and installing a type of security in your store can help you reduce the shrinkage you are experiencing.

For more about shoplifting, follow the links below.

Surveillance best cure for shoplifting

Aside from the holiday seasons where people aimlessly weave through cart-to-cart traffic down aisles in department or convenience stores, it’s difficult to predict when there will be spike in theft.

Particularly, shoplifting.

As of Friday, the Hutchinson Police Department has worked two cases of shoplifting this month. Granted, only nine unpredictably cold and not-so cold days have scooted by in March. But January and February were hot months for shoplifting with officers responding to 61 combined reported cases of shoplifting, according to Hutchinson Police bulletin archives.

There were 24 reports of shoplifting in December. Numbers from the archive bulletin suggests the shoplifting occurs at three of the most recognizable stores in the city: Wal-Mart, Dillons and various Kwik Shops.

Hastings, Target, J.C. Penney and Kohl’s are also sprinkled on the list of popularly shoplifted stores.

But why the heart-monitor like spike in thefts recently? Police Lt. Martin Robertson isn’t sure of the answer himself.

US based company allows shoplifters to avoid the police by charging them for an online course

IN THE game of Monopoly, there’s nothing better (apart from maybe winning free parking) than turning over that community chest card to see the words “get out of jail free.”

Now imagine that someone hands you that card after you’ve committed a criminal act in real life.

That is essentially what one company based in the United States is doing.

The Corrective Education Company (CEC) is a start-up, and works with businesses to offer shoplifters an alternative path to reform other than the boring old legal system.

Founded by a pair of Harvard graduates, it offers the chance for apprehended shoplifters to pay $411 ($US320) in order to avoid a phone call to the boys in blue.

That money goes towards the cost of attending an online course which is run by CEC that claims to reduce the likelihood of recidivism for the individual.

The obliging shop owners who refer the shoplifters get a cut of about $US40 per offender, and according to Slate around 20,000 offenders have so far coughed up for the program.

That works out to be $7.2 million that CEC has profited by blatantly circumventing the established judicial system.

Walgreens Shoplifting Duo Captured On Surveillance

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Vendor/Contractor Fraud

March 2, 2015 by admin Leave a Comment

I want you to sit back and think about something for a minute. Other than your employees, how many other peopled have worked in your store last month? Drawing a blank? Think about those lights that needed replacing, or the compactor that needed repair, or even the new display cases that were installed overnight a few weeks back. While you may realize it, you more than likely have a great deal of contactors coming in and out of your store on a fairly frequent basis. These contractors and vendors have access to everything and employee has and sometimes more.

Not only do you have to consider product and equipment theft, what about data or intellectual property theft? Company sales figures, or closely guarded industry secrets? A single thumb drive and a bit of know-how can get a wealth of information into the wrong hands. Thinking about all of that, you probably want to repair your own sinks from now on…

Just as with any LP process, you have to implement a strategy that allows you to identify and react to theft, all while maintain the trust of the 99.9% of your customers that are honest. A few simple policies and best practices can protect your business from vendor/contractor theft.

First, you should establish a check in procedure. Vendors, or outside contractors should have to check in with the manager and then be taken to the area of the store that requires their services. If the area is a sensitive section of the store, or requires an exterior doors to be opened for an long period, a supervisor or key employee should remain in that area. In addition, a simple package inspection policy should be adopted and all employees, and outside vendor should be made to adhere to that policy. Basically, anyone exiting the store that works for you would have any bag, or box inspected by a store manager prior to them leaving the store.

An electronics policy should also be adopted around sensitive areas of the store. Vendors, as well as employees should be barred from using an external hard drive on any store computer system. Recording devices (cellphones) should not be allowed in sales offices, or anywhere that sensitive data is stored. You should also restrict any store Wi-Fi to store management only, and for the sole purpose of conducting company business.

While it may not be an area that you closely associate with shrink and loss, vendor compliance and control can become a major contributor to lost profits in your store. By implementing a few simple steps and practices, you can sure that you are doing all you can to prevent unnecessary loses to your store and company.

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Shoplifting Programs and News

February 4, 2015 by admin Leave a Comment

If you own a retail store or are managing one, shoplifting is a crime you have to deal with in a daily basis. Shoplifting and employee theft are two of the most damaging crimes for a retail store’s bottom line. If your store has policies regarding shoplifting and employee theft, such policies should be visible; they may serve as a deterrent to shoplifters entering your store, or employees thinking they can get away with stealing merchandise. For more news about shoplifting follow the links below.

Dover calls new shoplifting mugshot program a success

A controversial approach to reducing shoplifting by posting suspects’ arrest photos has been declared a success in Dover, despite complaints about violations of civil rights.

The four-month pilot project called the “Shoplifter Notification Program,” which started in August, produced a 19 percent drop in such crimes, city police said.

“That was huge,” said Cpl. Mark Hoffman, Dover Police Department’s public information officer, who suggested the project after seeing similar efforts on other forces’ webpages.

The drop in shoplifting was especially significant, he said, because the project period included the end-of-year holidays.

“That’s our busiest time of year for shoplifting,” Hoffman said, adding stores also are their busiest and youngsters with school vacations and time on their hands tend to raise the rate of merchandise thefts.

Davenport denies lawsuit claims of police brutality in shoplifting incident

The city of Davenport denies allegations of police brutality in its response to a lawsuit filed by a woman videotaped being hit by an officer after she was accused of shoplifting at Von Maur.

Brandie Redell, 36, of Davenport, filed the civil rights lawsuit in Davenport federal court last July, alleging she was beaten so severely she was hospitalized with a concussion and suffered vision loss.

The suit, filed against the city and Davenport police officers Scott Crow and Vincent Jacobsen, claims the police department makes a habit of “using excessive force against police suspects” and fails to properly discipline offending officers.

In a response filed last week, the city said the officers were justified in their use of force.

Man busted for shoplifting on motorized shopping-cart

SOUTH EUCLID, OH –It’s a miracle! A man on a motorized shopping-cart managed to stand up and run away when security guards tried to stop him from shoplifting at an Ohio Walmart.

An off-duty officer working security at the Walmart in South Euclid, Ohio noticed the man enter the store riding on the cart which is usually reserved for customers who need assistance walking.

A short time later, the man rolled out of the front entrance and set off the alarm. The officer began asking the man if he had any unpaid merchandise.

That’s when the man jumped out of the cart and high-tailed it out into the parking lot.

“We are so lucky to be police officers because every now and then we get the opportunity to

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Employee Theft and What’s Ahead For The Retail Industry

January 22, 2015 by admin Leave a Comment

Well trained personnel in a retail store can be an asset for your business. Employees that are poorly trained and poorly rewarded are very unlikely to look for the best interest in your store. Employee theft is common, and a poorly rewarded employee with lots of responsibilities is likely to feel taken advantage of and not feel an obligation towards you or the business. Investing in your employees and the security of your store should be a goal for your business this year. Follow the links below for more information about the state of the retail industry and other stories.

The NRF BIG Show: What’s in Store for Retail in 2015?

Over the past several days the retail community has converged on New York City for Retail’s BIG Show 2015. More than 27,000 industry leaders were on hand at the Jacob J. Javits Convention Center to welcome the 2015 retail calendar in grand fashion.

“The retail industry continues to race forward with innovative models, more tightly integrated channels, and fresh ideas to win over consumers,” says Matthew Shay, President and CEO of the National Retail Federation. “But no matter what’s shaking up the industry, one thing doesn’t change: Retail’s Big Show is always a showcase for what’s new, a place to build partnerships and a look into the future of retail.”

The EXPO Hall

Approximately 700 solution providers and other vendors blanketed multiple levels of exhibition resources in the EXPO hall with the latest in new products and programs. There were fascinating demonstrations throughout the hall demonstrating everything from marketing tools and customer service products to analytics solutions, robotics, and an innovations center where many of the latest products were demonstrated.

Police: Serial shoplifter tries to steal thousands in clothes from Kennewick store

A Hermiston woman with a history of shoplifting arrested is suspected of trying to steal thousands of dollars of clothes from Macy’s at Columbia Center mall.

Jessica M. Reddick, 31, tried to leave the store Monday night with $2,000 worth of clothes, police said. She is banned from all Macy’s stores after several incidents where she allegedly stole items from various Tri-City stores.

A security officer stopped Reddick as she tried to leave through the men’s department, police said. She was arrested and booked into the Benton County jail on suspicion of theft and burglary.

Reddick also reportedly had four felony warrants out for her arrest — all related to theft or shoplifting.

Behind your back: How retailers can curb employee theft

Shoplifting is what makes the news but, according to the National Retail Federation, the number one source of retail theft in the United States is committed by a retailer’s own employees.

Respondents in the group’s U.S. Retail Fraud Survey ranked cash theft as the second biggest area of store loss, bookkeeping and other administrative errors third, and shoplifting the fourth. But the first? Employee theft, experienced by 38% of those surveyed.

Theft by retail employees costs companies $14.9 billion annually, more than 46% of losses, according to the ADT/ University of Florida study.

“Employee theft is often a more serious problem than customer theft, especially in retail and food service,” says Forrest Burnson, inventory management researcher at software review company Software Advice.

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Start 2015 With Loss Prevention Best Practices For A More Profitable Year

January 9, 2015 by admin Leave a Comment

Now is the time to go on the attack! Fix your loss issues before they cost you this year’s profit margin. To do this, in many cases requires you to change the way you look at losses. First and foremost, if you are not leading with an “LP” mindset, how can you expect others to follow and support your goals? Loss prevention should always enter into decisions even if in a minor way. Decisions on how and where to display merchandise and the standards you set for employees to follow, are just the start.

There are three main sources of loss in a retail environment: External (shoplifters), internal (employees) and paperwork errors.

Let us look at two of these, starting with internal. My experience tells me that about 10% of employees in a given retail store are involved in theft. You may be saying to yourself that “my employees wouldn’t do that to me”. If you find yourself thinking that way, you are actually at a greater risk than most. Because you are in denial. People will steal regardless of how good you are to them, how much you pay them, how many times you have helped them and so on.

Often when I hear someone say that, we end up finding out that they have some of the largest losses. I know this may sound cynical but it is the truth based on my experience and thousands of employee theft investigation I have personally conducted. So what can you do to prevent employee theft?

To start, understand that employees must be held accountable. Employees can steal four different things from you: cash, merchandise, supplies and time. All of these have value including supplies. If you operate at a typical profit margin of 2% after taxes a loss of $100 will cost you $5000 ($100/0.02). So even a twelve pack of toilet paper has value, not to mention the serious morale issue when you don’t have toilet paper! Employees need to understand that the only thing they are allowed to remove from the store is the air in their lungs.

On top of this, what message are you sending employees by your actions? For example, if you have a policy that cash register shortages under $5.00 are not investigated and a cashier held accountable, then you are telling everyone that it is okay to steal up to $4.99.

Look for employees that wholeheartedly share, understand, support (not just to your face) and practice your LP policies. These employees should be held up to be the standard. Others will then follow. Those who don’t, well… you get the picture. We have a great sample document you can use for your LP employee handbook. It sets the standards and lets them know from the very beginning what you expect, tolerate and will not tolerate. If you would like a free copy in Word format that you can customize for your use, please send me an email.

Shoplifters, those horrible people that come into your store and try to steal everything they can. Okay I will say up front, we sell Checkpoint anti-shoplifting systems. These systems are used by most major retailers worldwide and for a reason. They shut down a huge amount of shoplifting. They are commercial grade and meant to stand up to the tough retail environment. With that aside, let me ask you this, Why are you not using one? A Checkpoint System is a proven way to bring your shoplifting losses under control.

Other best practices include the use of CCTV. However, you must have the correct expectations for this. CCTV is a reactive measure. Shoplifters are rarely deterred by cameras as they know you do not have the payroll to watch them all the time or even when they are skulking around in your store. CCTV is good for employee theft prevention and investigation. You can use it in a somewhat proactive way by bringing an employee in, showing them a 60 second clip of them doing something good and then complimenting them on a job well done. They leave with a good feeling but say to themselves and others “wow I guess he/she is watching”. Do that monthly and see what happens. Believe me, word will get around.

Employee training is something we almost always overlook. Or we just say that they are learning as they go. You invest a lot of effort and money into a new hire. Spend a few hours with a structured outline and make sure they understand what their new job is, the standards you have and what you expect them to do each and every day. The document I offered you above for free will help with this.

Pre-employment screening is also overlooked. For example, have you ever confirmed that a person you are looking to hire can actually count money? Do you test for that? Put $100 on the table and see if they can make correct change without the assistance of the cash register. If they cannot, do you really want them handling your cash?

Paperwork errors are just as deadly as any other form of loss. Keeping a correct inventory not only helps with reordering but is a critical component of controlling theft. How can you react to loss, if you do not know what items are stolen? For example, you might not know that a particular item is being stolen because shoplifters have found a demand for it elsewhere. If you suspect that a particular item is being targeted, then conduct what is called a cycle count on it. A cycle count simply means you are counting it on a daily, weekly or biweekly basis. Comparing that information to your sales of that item will allow you to react quickly before it is too late and the losses become severe.

Are you ensuring that your employees are not making mistakes in their work and then not correcting them? You also need to set the standard that you are watching and reviewing. For example, if an employee is checking-in a shipment and they are to piece count every item, then follow through by picking up the manifest that they just did and spot check their counts on a few items. When they get it right, complement them. If they made mistakes, show them their errors and let them know how the job is to be done and the standard. By the way there are vendors that will try to short your shipment hoping that you don’t check. Vendors and shippers also have employee theft issues and you do not want to be left holding the bag for their issues. I have caught major shipping company employees cutting open the bottom of boxes removing merchandise and then taping the box back up. All of this is done on the truck before they arrive at your business.

I realize that much of this is common sense. However, in many cases we are so busy trying to make money that we forget to keep the money we have on the bottom line. Remember, we are here for you. If you have any questions or issues, we are simply a phone call or email away.

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Law Enforcement and Retail Loss Prevention Partnerships

January 9, 2015 by admin Leave a Comment

Shoplifting isn’t just a problem for retailers. It is a crime and it affects everyone in some way. Whether it be the retail store that suffers lost profits, the consumer who is faced with higher prices, or a community that is plagued with organized criminal syndicates all dealing in stolen property. For years, it seemed like I was fighting the shoplifting battle alone. I could deploy the most sophisticated camera systems, or use the newest EAS technology, but those career shoplifters were still targeting my stores on a daily basis. And getting away with hundreds of thousands of dollars in goods.

I felt the response from local law enforcement wasn’t what it should’ve been. Understandably, police usually see shoplifting as a petty crime. It’s a low priority in most jurisdictions, as it falls behind drug crimes, auto theft, burglaries and the more violent crimes. It wasn’t’ until two years ago that police in my parish began addressing the ever-growing shoplifting problem with a very unique solution.

The local sheriff’s office began reviewing shoplifting statistics and assigned two detectives to develop a program with local retailers to coordinate efforts and share information on shoplifters. At the onset, I was approached by these detectives. I was the regional LP manager for one the the largest retailers in the parish. It didn’t take much to convincing to get me and my company onboard. I reached out to my industry contacts and before long, over 100 different retailers were working in concert with local police to dismantle some of the most well-known shoplifting rings. These weren’t just big box retailers with LP departments. The vast majority were small, family owned stores and supermarkets who were tired of seeing the same shoplifters day in and day out. Once a quarter, everyone would meet in a large auditorium and swap cases and share photos of big time boosters, or unknowns. It didn’t take long for some very substantial cases to be made, as well as the sheriff’s office realizing just how bad the problem was.

Everyone was quick to see what we knew all along. Shoplifting was not being committed by a bored teenager. Most of our shoplifters were drug addicts who were hooked on heroin, which is making a massive comeback in the US. Gangs of 10-15 at a time would target stores across the area. They would steal merchandise, conduct fraud refunds; whatever it took to make enough money for their next score. As more and more information was shared, police came to learn that most shoplifters were also suspects in other, more serious crimes. Based on our partnerships, we bang identifying car thieves, drug dealers and violent offenders, al who hand their hands in shoplifting.

While we’ve only scratched the surface, preliminary numbers for 2014 show over 4,000 arrest for shoplifting in this one parish alone. Most of these originated from the partnership group. This is a staggering number to comprehend. The hope is that with more support from the DA’s office, this number will start to decrease. We’ve already seen prosecutors push for heavier penalties and even prison time for some of the biggest repeat offenders. Hopefully, these types of partnerships can continue to be forged, and our law enforcement agencies will continue partnering with the Loss Prevention industry to help turn the tide against shoplifting.

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Does Your Business Culture Encourage Employee Theft?

January 9, 2015 by admin Leave a Comment

There is a belief among many small business owners that, because the company belongs to them, they ought to be allowed to behave anyway they want. They want to be able to run things their way and believe the employees “should and will” respond accordingly. That’s why they went into business for themselves – they wanted to create and control the work environment or cultural.

This is the paradox, and downfall, of many small business owners. The characteristics of independence and self-determination, coupled with the need to be in charge, are the hallmarks of a successful entrepreneur. Unfortunately, they’re also the attributes of unsuccessful, bankrupt entrepreneurs.

One of the differences between successful and unsuccessful owners is the ability to marginalize the negatives and maximize the positives of their desire to be in control. This ability is particularly important when establishing and maintaining the business’s security culture. Yet, ask any business consultant or security advisor and they’ll say this is one of the areas owners are least likely to address.

They usually don’t address it because they have the mistaken belief that the culture they’ve established and are maintaining, through the power of their personality, is an effective theft deterrent. They believe the way they behave (i.e. nice, nasty, supportive, demeaning, conciliatory, confrontational) will keep them safe from employee fraud.

However, it rarely works that way. The company’s culture is usually not enough to stop employee theft. “Good” guys who try to create an atmosphere of ease for their employee and “bad” guys who create one of stress have the same amount of fraud. The statistics and antidotal information show that owners who manage through personality, rather than systems and controls, are likely to fail.

Employees are 15 times more likely to steal than outsiders and are responsible for 44% of a business’s theft losses (National Federation of Independent Business). This results in almost a 1/3 of businesses failing due to employee fraud (U.S. Department of Commerce). In another 1/3 it’s believed to be a .05% – 1% loss of profit.

The number 1 deterrent is security systems and controls embedded into the cultural. A business’s security culture – values, beliefs and norms which guide how the business and the people in it operate – is important to a business’s survival. When people work within one there’s a profound positive effect on employee morale, operations and the bottom line.

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What’s Trending in the World of Shoplifting?

January 8, 2015 by admin Leave a Comment

Wouldn’t it be nice if the criminal world was as easy as Twitter? You could just go online and look at what’s trending and then take proactive steps to stem any potential losses. That would be great! Unfortunately, criminals, especially thieves rarely broadcast their intentions. It’s up to the loss prevention community and local law enforcement to share these trends amongst each other in order to combat shoplifting.

You may or may not be aware, but shoplifting is much more than just putting one item in your purse, or pockets. I routinely see individuals and groups operating some very sophisticated fraud schemes in order to remove product from the store. One of those trends that have become more and more prevalent over the past year has involved refund fraud. I had a very complex case that spanned several months that was more sophisticated than anything I had every come across in all my years conducting Loss Prevention Investigations.

The basic storyline is that a brick and mortar store front was employing individuals to target stores for small, high dollar merchandise. Once the product was stolen from one store, it would then be brought to a second store where a refund was given for the product in the form of store credit. That individual would then utilize that credit in order to purchase a high end electronic item. The item, along with the receipt was sold to the store front. This is where it takes a more complex turn.

The store owners would then arrive back at the store with the receipt and electronic item and ask to exchange it for other product. This was routinely conducted with footwear or apparel items. The store owners would conduct the exchange and, on most occasions, pay a difference in cash of anywhere between $10 and $20.

Over several days, the store owners would return to my store and refund each item that was purchased during that exchange transaction. Since the receipt showed they paid a cash balance, inattentive store personnel would always give them a full cash refund. Did I lose you?

Essentially, I was at a loss 5 times for the same product. First it was stolen. Second, I gave them a store credit for stolen goods. Third, the store credit was then spent. Fourth, the product the credit was spent on was exchanged for additional merchandise. Fifth, we gave them cash. It was incredible once it was all uncovered. This group has figured out a way to essentially launder stolen goods and with a few steps and some patience, get cash. All while keeping the appearance of a legitimate transaction. All told, our stores lost well over $100k to this scam.

It was an expensive lesson to learn, but it goes to show just how creative people can be when it comes to fraud. While this was the first time I had ever seen something of this complexity, I can assure you that in the next year, someone will come up with an even more complex method to defraud retailers.

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