Making the decision on Loss Prevention Consultants

October 4, 2010 by

Considering hiring loss prevention consultants? Here are a few good reasons why doing your research could make all the difference in the world.

Retailers and businesses alike face many of the same obstacles to making a profit. Employee theft, white collar crimes, physical security issues and many other avenues of loss are all factors in determining your business needs.

Here are a couple of things to consider when looking for Loss Prevention Consultants. In this example, we’ll use Company “A”.  Company A has identified merchandise loss during their inventory process. They are an emerging business with a growing customer base. After their inventory, the management was at a loss. They kept looking at all the wrong places for answers that were right in front of their faces. Merchandise in the liquor department and merchandise in the electronics section were missing in large numbers. The items are controlled stock on the salesfloor and are maintained in employee only area in the back of the store. At this point, it’d be well advised to bring in professionals, Loss Prevention Consultants. 

Company A hired a loss prevention consultation firm and the investigations begun. Advisors arrived to the location and examined everything from forensic accounting to external theft investigations. Looking into the receiving practices proved the merchandise was received when it should have been. An even further look showed the possibility of a couple of associates taking merchandise out of the back roll-up door just after being received. The Loss Prevention Consultants brought in a  loss prevention investigator who gathered the investigation materials and arranged the interview/interrogation of the suspected employees.

The interrogations were performed, and the two employees admitted to the theft. Additionally, the Loss Prevention Investigator was able to get the two employees to agree to a search of their private homes. The local police department was contacted and a search of the employees’ home recovered over $100,000 in merchandise.

For more information contact us at loss prevention consultants or call 1.770.426.0547

 

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Employee background checks critical to success

October 4, 2010 by

A comprehensive background check is the first step in hiring quality, character employees. The 2010 University of Florida National Retail Security Survey documents that the majority of retail shrinkage last year was due to employee theft ($14.4 billion). Employee theft accounted for 43 percent of total retail losses in 2009. An estimated 1.7 million people are victims annually of violent crime while working in the United States, according to a report published by the Bureau of Justice Statistics (BJS). 1.3 million (75%) of these incidents were simple assaults while 19% were aggravated assaults. The American DataBank has also documented that up to 30% of job applications and 40% of resumes contain false information. Due to a large number of employers not conducting effective employee background checks, 72% of employers lose negligent hiring suits.   

An effective employee background check should include, at a minimum, the following:

Criminal Background Check: To include Federal, State and County criminal background checks.

Employment Background Check: Confirm dates of employment, Positions held and eligibility for rehire.

Social Security Background Check: Verify Social Security number, identify other names used and residence history.

Motor Vehicle Report / Driving Records Background Check: Identify citations and suspensions.

Protect your business today. Conduct employee background checks to increase profits and reduce the potential for violent crime in your workplace.

For more information on Employee Background Checks call us at 1.770.426.0547.

 

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Employment Screening and the Keys to Your House

October 4, 2010 by

Would you go up to a random stranger and hand over the keys to your house, telling him that you are going to be out of town for a while and would he please keep an eye on things?  Probably not, but if you hire new employees without an adequate employment screening program in place, that is essentially what you are doing with your business.

You want to have some degree of trust in the person you hire to perform any function in your business from the lowest to the highest.  Think about the assets you have in your business:  Merchandise, supplies, cash, electronics, vehicles, customer lists and proprietary information, for a start.  There’s also your reputation and the good will of your customers.  Each time you bring in a new employee, you potentially put some portion of your business at risk.

The thought of that is frightening enough, but to bring in a new person without checking on his past performance or character is really scary.  A background check as part of your employment screening program is designed to mitigate your risk.  A background check will not prevent a person from becoming a thief or an opportunist; but it will help prevent you from hiring one.  Most employers feel that it’s better to know all they can about their future employees than to blindly turn over their assets to an unknown entity.

Trust is developed over time, but starting out with an employee who is honest and trustworthy certainly will take some of the uncertainty out of the road to trust.

As a manager or business owner, you have enough on your mind without worrying if your own employees are going to undermine your business through theft or carelessness.  Just as you wouldn’t turn over the keys to your house to just anyone, always start with the best possible employee you can hire by checking the past through employment screening.

We are ready to help with your employment screening questions.  Call 770-426-0547 or click here.

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Corporate Fraud Investigation – Integrity at the highest levels

October 1, 2010 by Leave a Comment

Executive leadership is not exempt from Corporate Fraud Investigation. The Sarbanes-Oxley Act of 2002 details the audit and management procedures of the corporate environment and is a reference used in Corporate Fraud Investigation.

Corporate Fraud can completely decimate a company. One need only look at the early 2000’s and the likes of Enron, WorldCom, MCI and others. These companies dissolved as the result of Corporate Fraud and the Sarbanes-Oxley Act was created.

Corporate Fraud Investigation looks at all aspect of fraud, not just at the executive level, but at all levels. A story that floats around most loss prevention, and investigation firms and organizations is of a lone accounts payable employee that took advantage of a payment opportunity using her husband and his construction business.

This accounts payable employee working out of the corporate office was directed to cut a check for payment of construction services performed at one of the retail locations. She created a check for about $14,000 and mailed off the check to the construction company. Quickly, she saw an opportunity to make some fast cash and decided to send a second check in the amount of $14,000 to the same construction company. She then calls this construction company and tells them that her office “accidentally” sent a second check. She asked the construction company to send the second check back to her attention. Upon receipt of the check, the accounts payable employee had her husband endorse the check and deposit it into his business account. Later they planned on transferring the money to their personal account.

Had it not been for the thorough investigation, this accounts payable employee would have been $14,000 richer. Instead, after a forensic accounting analysis, the employee faced prison time.

Corporate Fraud is a covert business. It can be controlled with a proper oversight committee and a checks and balance system involving Corporate Fraud Investigation.

For more information visit us at corporate fraud investigation or call 1.770.426.0547

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Consider a Corporate Fraud Investigator for your white collar crime dilemmas

October 1, 2010 by Leave a Comment

As a Corporate Fraud Investigator, I’ve spent countless hours looking at journal entries, profit and loss statements, balance sheets, ledgers, investment scenarios and countless other corporate level sales, profit and investment tracking practices. And forensic accounting, a major tool in the Corporate Fraud Investigator toolbox, is a useful asset to have. Understanding how and why a business accounts for their practices is the key to performing a solid fraud investigation.

As an example, let’s say inventory time is coming around. The public company you work for has about 7 stores. Pretty moderate sales volume, your company is growing. Now, as the inventory numbers start coming in, your corporate inventory guy starts to worry about the shrink numbers in one of the stores. He directs the in-store manager to report no more than $30k in losses on a sales volume of $1million. In reality, the store lost $50k in inventory. The manager is told the other losses will be poured into some other (bogus) account. The manager, following direction of the corporate office shows $30k in inventory loss and the corporate office books him for $30k. The other $20k gets put into a gross margin fund at the store level or is dismissed. Either way, bogus!

Now the outside investors see these shrink numbers and think, WOW, great news.

As a Corporate Fraud Investigator, you hear word from the loss prevention agent at a particular location about the inventory process. You start your investigation and the unraveling begins.

A good Corporate Fraud Investigator can be the best friend of the organization. Keeping a watch on fraud, waste and abuse and knowing when to react will ensure your business stays a business for many years to come.

For more information visit us at corporate fraud investigator or call us at 1.770.426.0547

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Background Check Results are Here! Now What?

October 1, 2010 by

You’ve received your applicant’s background check results and he has a record.  Now you have a decision to make.

Hopefully, not what a municipal government here in Georgia did when they received the results for one of their candidates.

This individual, hired in 2006 as a laborer, had a rap sheet that revealed a total of 23 arrests, beginning in 1986; 10 of these were felony arrests; 3 times he his parole was revoked and he was sent back to prison.  His last arrest prior to being hired by the city was in 2004, when he was sentenced to 3 years in prison, but was paroled in July 2006.

After being hired by the city in December, the employee was soon transferred into the utilities department and was given a truck and a route read customer’s utility meters.

As it turns out he was doing more than reading meters.  Police arrested him while on his route for possession of cocaine with intent to distribute.  He had $1600 in cash on him at the time.

So this employer had adequate warning to keep an eye on this employee, but gave him the means to continue his criminal career.

How does an employer decide who to hire or not to hire based on the results of a criminal background check?

The test is usually, “Does this person’s record have an impact on the job he is expected to do?”  Agreed that the city might have had a difficult time filling the position of laborer with anyone that didn’t have some sort of criminal record.  The question then becomes, should that person have been promoted/transferred into the utility department?  The answer in this case was obviously “No”.

Other examples:

Violent crime convictions for an employee with customer or employee contact?

Financial crimes for bookkeeper?

Shoplifting crimes for a retail store employee?

Driving Under the Influence arrests for a delivery driver?

In these examples, the search should probably continue for your new employee, but you should always weigh the relevance of the criminal record check with the job to be performed, and not preclude an individual just because he has a record and has disclosed it honestly on his application.

To contact a background check expert, call 770-426-0547 or click here.

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Internal Theft – An employees guide to misappropriation? Atlanta

September 30, 2010 by Leave a Comment

I know what you’re thinking? internal theft ? What the heck is that? Boy, if a retailer could really have the luxury of wondering.

Do this, imagine a nice beautiful airplane. You spent lots of money on building her up, beautifying her and are ready to get your customers going. The maiden voyage comes. It’s great. You have a solid customer base, you take on extra airplanes. You’re kicking back, enjoying the fruits of your hard labor when all of a sudden, you get a call. An airplane of yours is falling from the sky. You have a seasoned pilot at the wheel but he can’t control it without immediate and urgent help. You need to react quickly before it’s too late.

That’s kind of an example of what internal theft can do to your business if left unchecked. Employee theft and employee fraud claim millions of dollars each year from retailers and business owners across the country.

A former company I worked for had just that issue. This employee was a well liked and trusted individual. They had worked for this company for 20 + years, had keys to the store and manager level access to all alarms, and access control points.  They could do no wrong.  Merchandise went missing. Thousands of dollars worth. Where was it going? We investigated every single employee in the building. We looked at the receiving process, interviewed vendors. NOTHING! Only one answer, the employee everyone thought was above this. The trusted one.

We went completely black. Spoke with no one other than our immediate supervisors. We conducted surveillance on the long term employee, just 1 day and 1 night. Got him!

I can’t tell you what a relief it was to speak with the store management and corporate staff about the investigation we had just conducted and completed. The disbelief.

I interviewed the suspected employee, who subsequently admitted to over $135,000 in merchandise theft. Internal theft certainly was the case.

Internal theft can come quickly when controls are loosened or lax, be prepared. Never underestimate anyone and always perform due diligence on any investigation to truly uncover the causes of employee theft and employee fraud in your business.

For more information on employee theft or employee fraud in Atlanta please contact us at internal theft or call 1.770.426.0547

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Most retail shrinkage from these top three areas

September 30, 2010 by Leave a Comment

Retail shrinkage is measured anually by The University of Florida’s National Retail Security Survey (the holy grail of the studies) and the top three in order greatest to least are; employee theft, shoplifting and administrative and paperwork error.

Many retailers would say they believe shoplifting to be their number one source of inventory shrinkage and respond with “I trust my people.”  However; the UF survey shows that 43% of all retail inventory shrinkage is due to employee theft.  This accounts for $15.5 billion in annual inventory loss.  This makes employee theft the single largest form of larceny in the US, no other form of larceny costs Americans more money.

Shoplifting is the second largest form of  retail shrinkage.   Shoplifting accounts for 36% of total retail inventory loss totally $13 billion in a single year.  There is a staggering rise in organized retail crime (ORC) that is potentially underestimated and can involve employee collusion.

Administrative and paperwork errors hit the list at number three and account for 15% of annual retail shrinkage.  Naturally, the best way to solve these problems is to prevent theft from occurring.  Identifying best practices of operation and incorporating installed loss prevention security will prevent theft and inventory shrinkage and boost bottom line profits.

To learn more visit retailshrinkage solutions

 

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Store managers ask, “How can I prevent shoplifting?”

September 30, 2010 by Leave a Comment

Many times I have been asked by a manager or store owner, “how do I  prevent shoplifting?”

According to the 2010 University of Florida National Retail Security Survey, retail stores lost  $11.7 billion to shoplifting in 2009. As organized retail crime (ORC) continues to grow, one thing has become clear, you must be proactive to  prevent shoplifting and grow your net profit. One of the easiest ways to prevent shoplifting is to know your inventory and to educate your employees. I was recently in a large big box store. Utilizing the shrink by sub-class stat report, I discovered that the store had lost over $12,200 in Crest White Strips last inventory cycle. When I asked the Health and Beauty Department supervisor what her highest shrinking item was, she hadn’t a clue. As we walked the sales floor, I counted four different types of Crest White Strips on the shelf, totaling 38 boxes and roughly $1,020 in that product.

A 10 minute talk with that supervisor will save that store thousands next inventory cycle.

These approaches will help prevent shoplifting:

1. Use checkpoint security labels on high theft items (such as white strips). This is a deterrent        even if you don’t have Electronic Article Surveillance (EAS) at your doors.

2. Limit your inventory of high theft items (such as white strips) on the sales floor. ORC units strike quick and are professional thieves. If you have 38 boxes out, 38 will be gone in one hit.

3. Conduct weekly inventory cycle counts of your three highest shrinking items (such as white strips). If you see losses after tagging, and after limiting what is available on the sales floor, it may be an internal theft issue and lock up the high theft item in your stock-room. Notify a Loss Prevention Investigator immediately. 

4. Educate all employees in every area about the top 3 shrinking items in their areas. If they see customers in that area, superior customer service is in order. Make their presence known and prevent shoplifting!!

For more information visit:  prevent shoplifting or call 1.770.426.0547

 

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Retail loss prevention initiatives necessary for success & profit

September 30, 2010 by Leave a Comment

By definition, retail loss prevention  is a type of private investigation into larceny or theft. It is police and detective work for the private business instead of the general public. Businesses that do not take into consideration basic loss prevention and asset protection procedures will not survive.

The focus in retail loss prevention is on shoplifting, fraud and employee theft. According to the 2006 National Retail Security Survey, shrink is divided into five categories:

46.8% Employee theft
31.6% Shoplifting
14.4% Administrative error
3.75% Vendor error
2.86% Unknown error

To understand  retail loss prevention , a business needs to understand shrink. Shrink is merchandise or assets that are unaccounted for – and the loss is usually identified during an inventory. A business’s books will tell how much merchandise the business is supposed to have, based on receivings, shipments, etc. The difference between the books and what merchandise is actually there is called shrink.

A business must analyze its operations in order to identify factors that contribute to loss. Strategies must then be implemented to combat shrink. As illustrated in the statistics above, employee theft creates the most loss for a business and has to be taken into consideration when creating a program to reduce shrink. Many businesses only focus on shoplifting as a contributor, but employees can actually steal much more.

Retail loss prevention is a necessary effort in order for a business to be successful and profitable.

For more information contact us: retail loss prevention or call 1.770.426.0547.

 

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