Is Your Store Doing Racial Profiling and Is That Lawful?

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According to the Civilrights.org website “The U.S. Supreme Court has held that racial profiling violates the constitutional requirement that all persons be accorded equal protection of the law.19  Recently, many lawsuits  that have captured the attention of the public involves lawsuits where not only the accused shoplifters , but employees of these retail stores have cited racial profiling against these giants.  Follow more news about this topic by following the links below.


Fashion Chain Zara Profiles Black Shoppers As Potential Thieves, Workers Allege In Report

In early June, Spanish fast fashion chain Zara hit headlines when the longtime in-house lawyer for their American stores sued for $40 million in damages, alleging anti-Semitic, anti-gay discrimination.

Zara called their former counsel’s allegations “shocking,” adding that the company intends to “respond strongly and vigorously” in court.

A report released on Monday suggests the clothier may have deeper troubles, starting with a corporate culture steeped in racism.

Labor advocacy group Center for Popular Democracy surveyed Zara retail employees at six of the chain’s seven New York City stores this past spring following a handful of scandals involving insensitive designs by the fashion company, like a child’s shirt that resembled a Holocaust uniform.


CVS was hit with a federal lawsuit on Wednesday after four former store detectives at the drug chain charged their supervisors told them to profile minorities for anti-shoplifting enforcement.

The store detectives, who are also minorities, argued in their lawsuit that they endured racially insulting language and had clear instructions from their bosses to keep an eye on blacks and Hispanics because they were the ones most likely to steal, according to Newsday.

The detectives charged that when they pushed back against the profiling orders they were all fired, they claimed in their suit.

“CVS intentionally targets and racially profiles its Black and Hispanic shoppers based on the highly offensive, discriminatory and ill-founded institutional belief that these minority customers are criminals and thieves,” lawyers for former store detectives stated in their suit.

 


Natick judge to Macy’s: Stop collecting shoplifting fines

A Natick District Court judge told a lawyer from Macy’s he planned to issue an injunction banning the store from collecting fines from shoplifting suspects, but said he expects Macy’s to ignore the court order.

Judge Douglas Stoddart said Macy’s policy to collect a $500 fine from alleged shoplifters is “ethically wrong.”

“We’re heading into uncharted waters, legally, and I think it needs to be heard by a higher court,” Stoddart told the store’s lawyer, Daniel Field.

In March, Stoddart held a hearing to discuss Macy’s policy. Currently, if suspected shoplifters are caught they are brought into a security office, and told they can pay a $500 fine instead of being sued civilly for the money. However, payment of the $500 does not preclude their arrest. Several people have told Stoddart over the years they were told if they paid the money they wouldn’t be arrested, but still were.


Shoplifting Prevention and other News

shoplifting1Preventing or taking measures to prevent a crime is much easier for a company than dealing with the results and the cost associated with dealing with it. Preventing shoplifting deals with a lot of situations that are unique to a particular store or situation, and the measures to dealing with them is different every time.  If you are dealing with shoplifting or employee theft, follow the links below for more information about this topic and some measures you can take to prevent theft in your store.


Shoplifting arrests at Eagan Outlet Mall raise question of bias

A majority of those cited or charged with shoplifting at Eagan’s new outlet mall have been people of color. 

As soon as developers broke ground at the Twin Cities Premium Outlets in Eagan, police began preparing for an uptick in traffic and activity in the area.

Nearly 85 percent of those arrested or cited in connection with shoplifting calls at Eagan’s new outlet mall were people of color, according to a Star Tribune analysis of nearly 1,000 calls to police in the first eight months the center was open.

The percentage of blacks and other minorities arrested or charged with shoplifting offenses at Eagan’s Twin Cities Premium Outlet was higher than at nearby Burnsville Center, in all of Minneapolis or at a similar outlet mall in Albertville.


6 Low-Tech Ways to Reduce Shoplifting

It’s our instinct to turn to technology first when solving a problem. However, when it comes to preventing theft in your store, low-tech solutions can also be very effective. Using low-cost and free solutions can sometimes even require less employee training and troubleshooting than some high-tech tools.

Here are 6 low-tech ways to prevent theft in your store:

1. Put out the welcome mat. Shoplifters want to be anonymous and make as little contact with store employees as possible. One of the most effective ways to deter shoplifters is to greet every customer that walks into the store. “Don’t just shout “Good morning” over your shoulder, but make eye contact and greet the customer like you are happy to see them,” says Chris McGoey, security expert and founder ofCrime Doctor, a security firm. “Not only is it good customer service, a simple greeting can make potential shoplifters change their mind about stealing from your store because they know you can identify them.”


SHOPLIFTING PREVENTION TIPS

ANDERSON, SC – The City of Anderson Police Department offers the following shoplifting prevention tips. Shoplifting can cost your business thousands of dollars each year. Shoplifters may be any age, sex, economic, or ethnic background. There is no “typical” shoplifter. Often they work in pairs or groups to divert the clerk’s attention while they steal. Certain times of the day when employees are apt to be less alert are critical: Store opening and closing, during the lunch hour, dinner, or shift changes. Shoplifters learn to take advantage of crowded stores during peak hours.Effective prevention begins with an aware and alert staff.

Protective Measures

• Make the shoplifters feel watched. Elevate the cashier’s platform. Install mirrors that enable cashiers and sales people to see over and around displays. Install one-way glass in offices to enable employees to see into the store without being seen from the floor. Install video surveillance cameras.

• Post signs warning against shoplifting. Emphasize that you will prosecute. The best way to discourage shoplifters and keep your business from being tagged as an easy mark is to take a get- tough attitude and prosecute on the first offense.


Organized Employee Theft

theft (12)I seriously try not to be surprised anymore. During any given day, there is no telling what will come across my desk. As an investigator for my company’s Asset Protection department, there are no two days the same. I have two main focuses. One being organized retail theft and the other is employee theft. Ten years in and I haven’t figured out which one I love more. The external cases keep me on my toes, but the employees really do come up with some very clever ways to steal from me. Sometimes the two worlds collide for a case that is truly amazing.

Take one of my stores for example. It was time for their inventory and two days later we get the final numbers. The appliance department shows that it’s in the negative almost $200K. This is impossible. Every piece of equipment delivered to the store gets checked in, so there’s no chance of shipping errors. It’s pretty hard for a customer to stuff a dryer down their pants, so external theft is out. The only other option out there is employee theft. Again though, you would think it would be obvious if an employee was stealing a large bulk item. Unless of course, half the store is in on the theft.

It didn’t take much research after that inventory to find out what was happening. The basic fraud scheme was this. A customer. A legitimate customer would come into the store looking to purchase a new home appliance. After speaking with one of the sales consultants (dishonest employee), the customer would be duped into thinking there is a special clearance item that meets their needs that just happens to be heavily reduced in price. The sales person would then tell the customer that the system was down and that his register was only accepting cash, and that the store was also short on change, so it had to be the exact dollar amount. In all, several steps, but all believable to an honest customer who just thinks they are getting a deal.

Once the sales person would collect the cash (normally about ½ the retail value of the item), they would call an accomplice in the warehouse. A phony pick label would be generated in order for it to be pulled from the warehouse. An AP associate is required to sign off whenever bulk merchandise is loaded, however the majority of this store’s AP staff was unfortunately, in on the scheme. At the end of the night, the cash would be split. For a busy store such as this one, the associates were splitting thousands of dollars a week. This organized employee theft scheme went on, unchecked, for nearly a year.

During our investigation, we found the ring leader of the bunch, who happened to be an AP supervisor for the location. He stated that it happened once for a friend and he saw just how easy it was to make some extra cash on the side. Before he knew it, things had snowballed into a very elaborate, sophisticated and organized scheme. Never before had I prosecuted an employee theft case so large and organized. So organized that the District Attorney charged all involved with Organized Retail Theft, a statute that I had never seen used with employee theft. In total, these 10 or so employees had cost the store nearly $200K in losses. Each one of the employees were found guilty of their charge and due to the dollar values, some of them actually did a few weeks in a state prison.


Warning Signals Of Employee Theft

theft (2)As Business Owners we are “hit” with something that we did not or could not see coming. A piece of equipment breaks, a key employee is in an accident and gone for an extended period of time, etc.  Many times this also applies to employee theft: We simply did not see it coming.

However, there is a difference with employee theft and the first two examples. Employee theft is usually preceded by warning signals. Many Business Owners and Managers simply do not know what they are or do not see the forest for the trees.

When you look at this list, keep something in mind. One of these things, all by themselves probably mean nothing but in my 35 years of dealing personally with 2300+ employee theft investigations, I have found that most of the time two or more of these factors are present in enough time that a responsible party should have seen the warning signals. 

Personal behavior is the key area to watch:

1.Double talk or inconsistencies by an employee who is explaining discrepancies or “errors”.

2.Borrowing, particularly from loan sharks, but also habitual borrowing of any kind.

3.Symptoms of a drug user.

4.Admission of theft from prior employer.

5.Violent temper or other unpleasant behavior, which tends to discourage people from asking questions.

6.Expensive habits such as heavy drinking, drugs, extra-marital affairs.

7.Having more money or spending more than earnings could support:

–  Flashes big roll of money

–  Buys expensive items–jewelry, car, house, boat

–  Has expensive hobby

–  Always picks up check at restaurant

–  Dresses expensively

8.Disgruntled, dislikes boss or company and complains about being underpaid or overworked.

9.Heavy gambling on horses, cards, numbers, sports, etc.

10.Abnormal fear of, or antagonism toward, security or management personnel.

11.Possession of knife, gun or other weapon.

12.Terrorization of one employee by another.

13.Advocating violence as a way to resolve routine problems.

14.Never takes time off or vacation, comes in during vacation or day off.

15.Concealed family relationships among associates.

16.Chronic employee conversations that cease when management approaches.

17.Employees who never make purchases.

18.Employees who are “wary” of members of management.

19.Constant complainers.

Too often, signals pointing to internal theft, even when noticed, are mistakenly ascribed to chance, error, coincidence, or some other benign circumstance…and the signals are ignored.

Remember, a thief, like a magician, depends on you misinterpreting the obvious…or on his or her ability to confuse you.  Don’t be deceived, distracted or misled.


Take a Bite out of Shoplifting – Literally

shoplifting5Shoplifters are great. Well, not great for business, but great for laughs sometimes. Most of the times, shoplifting incidents are pretty serious business. You’re confronting someone who has just committed a crime. You don’t know their state of mind and you definitely don’t know what they are capable of. I’ve personally been pepper sprayed by a shoplifter as they tried to escape, along with seeing countless managers suffer the same fate. Often suspects immediately want to become physical and more simply will flee the store. Every now and then karma and a little luck is on your side.

I was training a new LP agent last summer in a very active market. It was day four of our training and she had already thrown a half dozen folks in jail. So far, no problems, this particular agent was an attractive young female who didn’t take lip from ANYONE! It was amazing how many shoplifters hit on her… but we’ll save those stories for another time. The clock was ticking away and it was just about time to call it a night when one of our frequent flyers entered the store. I had busted this guy on no less than three previous thefts and he was definitely a runner. I had my new agent begin observation while I contacted the police. At the very least, I was going to charge him with trespassing. 

About 15 minutes goes by and like always, the shoplifter starts loading his pants up with electronics. About this time, the police were arriving, so I went outside to inform them of the situation and wait for the thief and my agent to exit the store. Well, she didn’t disappoint. Our thief exits, but completely ignores the agent and takes off running. The next thing I know he’s gone. He’s hiding around the vehicles in the parking lot, but we can’t seem to find him. The officer gets on his loudspeaker and announces that he’s going to let the K-9 unit loose if he doesn’t turn himself in. No answer. 

Standing a full 3.5 feet tall and weighing in at about 120 pounds, K-9 Officer Scout is ready for action. This is a game for the pooch and I can tell he’s ready to play. Within seconds of jumping out of the patrol car, he and his handler are on the scent. Like a scene from a movie, out of nowhere, the shoplifter emerges. Only… he doesn’t surrender. In true idiot fashion, he starts sprinting across the parking lot. I don’t care how fast you think you are; you will never outrun a German shepherd whose sole purpose in life is to take you down. And take him down he did. When the handler finally reached the scene the shoplifter had a knife he was trying to stab the K-9 officer with. Not only did this shoplifter go to jail with some pretty serious bite wounds, he also got to feel what 100,000 volts of electricity from a Taser felt like. 


Who is really running my store? A Strong Case for Employee Background Checks

shoplifting4Coming from big box retail, I never realized just how uncommon employee background checks are in terms of smaller businesses, until I worked for one. While it’s standard practice for major retailers to run a pre-employment screening, there are plenty of stores and business out there that simply don’t. This could be a problem. It could be a problem for you, your business, your other employees and your customers. Knowing who you employ shouldn’t be a luxury. It is and should be, a necessity.

One of my first LP jobs was a district manager position for a very small chain of hardware stores. If I recall, they only have about 50 stores. When I first came on, they were building up their LP program and lacked several basic control measures in place. Think EAS, CCTV, exception based reporting and basic physical security measures. Heck, the stores weren’t even equipped with alarm panels. Part of my job was to help build their LP department to better assist the stores in becoming more profitable, assist in inventory reductions as well as limiting a very high turnover rate. After my first couple of weeks, it was clear that in order to help all of those categories, store managers needed to make better hiring decisions and that all starts with a thorough background check. 

It didn’t take much convincing and the company eventually found a company to process the screenings for us for a very competitive rate. Part of our new policy was to run the background checks on all of our current store managers. What we found was very disturbing. Out of 50 store managers, nearly 20 of them had extensive criminal records. Records that including prison time, drug and weapons charges, assaults, counterfeiting, forgery, fraud and even murder. These were our store managers! Not surprising, these 20 or so managers all had some of the worst performing stores. Literally, every one of those stores had shrink, turnover and moral issues. Coincidence? I think not. 

It took almost two years to fully implement and turnover some of those managers, but eventually the company was able to start with a clean slate. Now, every employee, prior to being offered a position with that company is required to submit to a background check. Anything other than simple misdemeanor traffic violations results in a disqualification of employment. I can tell you that those stores operate more efficiently, there is less shrink and turnover and employee morale high. If your company is not reviewing the backgrounds of your employees, ask yourself, “Who is really running my store?”


Motive, Means and Opportunity = Occupational Fraud

theft (8)Building a successful small business is a part of the American Dream for many people.  Every year millions of dollars, untold hours of sweat equity and unlimited hope are poured into starting and maintaining them.  Unfortunately, also every year, occupational fraud is responsible for closing about 30% of these businesses (U.S. Department of Commerce).

Fraud negatively affects smaller companies more than larger ones; they’re simply unable to absorb the loss.  Participants in the 2014 Global Fraud Study “Report to the Nations on Occupational Fraud and Abuse” estimated the average small business loses approximately 5% of revenue each year to fraud (The Association of Certified Fraud Examiners). 

5% in a small business can mean the difference between a profit or a loss. Therefore, controlling employee theft can be the difference between staying open or closing the doors.  It can also influence whether the owner is able to pay himself a living wage or not.  Given its potential for harmful impact it’s unfortunate that many owners are unprepared to fight fraud.

Most think it’ll never happen to them, not understanding that probably it’s already happened, is currently happening and/or will happen in the future.  Depending on the study 75% — 85% of employees admit that given the “right” circumstances they would or have committed fraud.  The right circumstances are usually a combination of motive, means and opportunity.

Motive is the rationalization the employee uses to steal time, money and property from the company.  Rationalizations are the reasons people create to justify their behavior and are as varied as the people who make them.  These self-deceptions provide the employee with an excuse to steal, even from an employer who they like.

But, motive is not enough for fraud.  A person also has to have the means — the ability, knowledge and access — to manipulate the system.  A bookkeeper can embezzle money because she knows how to “cook the books”.  Stock starts to go out the back door when the warehouse foreman creates an inventory method that only he understands or uses. 

Finally, an employee can be willing to steal and know how to do it, but the opportunity must be present.  An employee has her shoplifting friends come to the store when the easily distracted manager is working, not when the attentive one is.  A clerk learns the cash register camera is unreliable and pockets cash transactions on the days its offline.

Occupational fraud is a broad and all encompassing term, whether it involves petty theft or a multi-million dollar embezzlement scheme.  Its cornerstones are motive, means and opportunity.  A smart and success business owner will learn its dynamics and use this knowledge to take steps to combat it.


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.

Employee Theft and How to Prevent it

shoplifting4Now, research has shown the retail loses more from employee theft every year without knowing how to stop it, than at any other time.  Employee theft, shoplifting, credit card fraud, and many other fraudulent practices are plaguing the retail industry without a clear solution to the problem.  Local police in many communities across the US are implementing programs to help reduce criminal activities around their communities.  To read more about this topic follow the links below.


4 Ways to Protect Your Business Against Employee Fraud and Theft

Q: Which internal accounting controls can help prevent fraud?

A: This is a vast topic covered by countless books and consultants, so let’s narrow it down to employee fraud and theft. Aside from the obvious—conducting regular inventory checks and book audits, reconciling cash daily, and personally reviewing financial statements each month—there are several actions you can take to protect yourself and your business.

1. Establish a code of conduct.

Did you know that Walmart employees are not allowed to accept a bottle of water or cup of coffee from a vendor at a meeting without paying for it? That’s what I mean by a code of conduct. It’s a statement that you will not tolerate unethical or illegal behavior toward anyone—customers, suppliers, employees or the company itself.

While you may not be as strict as Walmart, you should write and post a code of conduct that clearly spells out the rules for employees and the repercussions for not following them. Give the code to everyone upon hire, and periodically thereafter, and require written acknowledgement that they have read, understand and agree to comply with it.


Police: Employee admits to stealing $14,500 from Kohl’s

A Sun Prairie woman admitted to stealing $14,500 from the Madison department store at which she worked, according to a release from Madison police.

Police said Rebecca A. Onstad, 27, said she stole merchandise and faked returns for store credit to support her family during some tough times in the past year.

Onstad worked at Kohl’s at 2602 East Springs Drive.

She was arrested Monday on suspicion of felony theft.


What Smaller Retailers can Learn About Loss Prevention

One of the biggest challenges the UK retail industry currently has to face is shrinkage. While sales are steadily growing – they increased by 3.9 per cent year-on-year in January, according to the British Retail Consortium (BRC) – stores are still facing losses from the old enemy of theft.

A recent infographic commissioned by SECOM Plc shows shoplifting and more serious retail theft is becoming more and more of a problem. While the number of incidents is falling, their cost to businesses is rising as more valuable items are targeted. In 2014, the cost of crime to the UK retail sector was £603 million, a rise of 18 per cent compared to the year before.

However, this figure does not take into account a number of other factors that have a much greater impact on smaller retailers. Each theft is not equal; stealing an item from one store can cause significant issues, while another might be able to absorb the loss easily.

Many small retailers only employ a handful of people and operate relatively informally, meaning they don’t have many policies in place regarding things like pricing, inventory and employee conduct. It may seem like these things are fairly low priority, but in actual fact having policies like these in place can significantly reduce shrinkage.

What You Need To Know About Background Checks

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Many small businesses think twice about hiring a new employee, especially if that business is going through a rough time.  The actual cost of hiring a new employee is expensive, and not only because of the salary they will be paying.  Recruiting and training alone will be costly, not to mention the time spend for interviewing the possible candidates.  Hiring the right candidate can become quite an ordeal, but by doing background checks on an employee before hiring them can save you time and money in the long run.


 Class Action: Amazon Violates Federal Law With Employee Background Checks

 Amazon.com Inc. and a staffing company that aids the online retailer in its hiring are facing a class action lawsuit, alleging that they have violated federal law because they did not disclose the information found in a background check that was used to deny employment.

Plaintiff Gregory Williams claims in his class action lawsuit filed on Wednesday in Washington state federal court that Amazon and Staff Management Solutions, which is also called SMX, violated the Fair Credit Reporting Act (FCRA).

Williams claims that he applied for a job with Amazon as a “puller” at one of the online retailer’s distribution centers in November 2013. SMX helps Amazon with hiring at its fulfillment centers primarily in anticipation of seasonal hiring.

As part of the application process, Williams also filled out a form giving SMX the authority “to obtain his consumer report for employment purposes.” That form stated that if anything is found in the background check that could affect his employment that he would be given a copy as well as an explanation of his rights under the FCRA. It also stated that the information can be disputed if the applicant deems that it is inaccurate.


Georgia Background Checks: What you need to know

There are a number of ways for employers to gather information on the background of an applicant for employment. Employers may simply call an applicant’s former employer to confirm the applicant’s dates of employment and title and to try to obtain a more detailed reference from a supervisor. However, more and more frequently, employers are hiring third parties to conduct background checks on applicants who have been offered employment. In addition, depending on the nature of the position, employers are requesting reports about an applicant’s driving record, criminal record, and/or credit history. There are often legal limits on employers obtaining and using this type of information. When employers hire a third party to conduct a background check or obtain reports from outside agencies, such reports are subject to the federal Fair Credit Reporting Act (FCRA) and state laws. In Georgia, employers must comply with laws concerning criminal background checks and driver’s record information.


Background Check Industry at a Crossroads: Raising Uptime Standards

Why does uptime matter?

In today’s lightning-paced business climate, companies and organizations in virtually every industry are paying more attention than ever to the speed, efficiency and dependability of the systems, software and other support tools that enable them to serve and retain customers and thrive in an increasingly competitive global economy. It’s an era of Google, Amazon and smartphone-enabled instant gratification, and we expect immediate answers to all of our questions and same-day shipment of every conceivable consumer product. And companies’ system availability, or uptime,makes this all possible.

Companies are also under heightened scrutiny from regulators, and from their own internal auditors, to meet stricter accounting and reporting guidelines, to prepare for every possible disaster scenario that could disrupt their business or their customers’ business, and to operate more efficiently in everything they do. Uptime is at the very core of all these concerns.


Background Checks Should be Standard Operating Procedure

theft (13)It’s not every day that I bring someone new to my team. I’m a regional Loss Prevention Manager and I manage a very small, but highly motivated and productive team. I need someone to work independently, make good business decisions and get results all with very minimal supervision. I also need someone that is of good moral character and has integrity above all else. Normally, when I have an open position, it will take me weeks to fill. I’m extremely selective and always go with the person that I know will fit into my team the best. So running a background check is one of the first things I do when I have a potential candidate, and it should be something you do as well.

It wasn’t all that long ago when I was looking for a market investigator. The position had been posted for a few weeks and I had already interviewed a group of candidates. I had narrowed it down to three and had to make a hiring decision. They all had tons of experience working investigations, retail operations or law enforcement. I knew who I wanted and made a job offer, which was contingent on the successful completion of a background check. We shook hands and he assured me that his record was clean.

A few days later, my background check company sent the results back to me. I was completely taken back. What seemed like a very qualified, motivated person was a complete fraud. His rap sheet was ¼ mile long and he was recently convicted of several counts of fraud. There was absolutely no way I could bring this person onto my team. Had it not been for a solid background check, this person could have potentially cost me and my company thousands of dollars and untold hours of frustration and heartache. This should be a lesson to any owner out there. It doesn’t matter how clean someone appears to be, how well the interview, or even how great their resume may look, there’s always the potential for skeletons to be hiding just below the surface. Do yourself, and your business a favor and always run a background check on new employees.