Employee Theft — Page 24

Shoplifting and the Law

May 18, 2015 by Staff Editor Leave a Comment

Some have called shoplifting the silent crime that is plaguing the US. Shoplifting for some people is considered their full time job, and retail organized crime is abundant in this country. Shoplifting affects small business owners tremendously and the retail industry as a whole lose millions of dollars yearly passing the loss to the consumer and therefore affecting you financially.

Shoplifting is a serious crime ,and some states are taking strong measures to make sure the penalties applied to the shoplifter are harsh. To read more follow the links below.

Retail merchants fear theft bill will increase crime

HONOLULU (HawaiiNewsNow) –

Retail Merchants of Hawaii president Sheri Sakamoto said a bill to raise the threshold for felony theft from $300 to $750 will encourage shoplifters to steal more.

“It will really affect retailers specifically. They now can steal up to $749.99 and have less consequences to their crime,” she said

Rep. Karl Rhoads is chairman of the House Judiciary committee. He said the bill targets agricultural theft, and shoplifting is considered separate but prosecutors do have leeway. “Even if the Governor signs this bill it’s still a crime to steal amounts between $300 and $750, it’s just the penalty is not as high,” he said.

Theft is a Class C felony, punishable by up to five years in prison. Advocates for raising the dollar threshold say $300 is way too low, and it costs taxpayers about $49,000 a year to incarcerate an offender. “So when we’re talking about property crime that’s under $1,000 and we’re paying $134 a day, you’ve got to start looking at that and saying, That really doesn’t pencil out,” Community Alliance on Prisons advocate Kat Brady said.

Shoplifting gangs operating on ‘industrial scale’

PROSECUTORS have vowed to smash serious organised crime groups who are using “steal to order” shoplifting to fund their illegal activities.

The Crown Office said shoplifting was happening on an “industrial scale”, with some groups travelling from overseas to target Scottish retailers.

More than 200 people have now been identified as being involved in what prosecutors called “professional shoplifting”.

The details emerged as the Crown Office published figures showing £8.6 million has been seized in 2014/15 under the Proceeds of Crime Act (Poca).

The money includes assets seized from the gangs, as well as from brothel keepers, money launderers, and drug dealers.

Solicitor General Lesley Thomson said specialist prosecutors had worked closely with a dedicated police inquiry team during the past year to dismantle shoplifting groups, who specialise in targeting expensive clothing and designer handbags.

Battling The $36 Billion U.S. Problem Of Retail Shrinkage Losses

The financial cost of retail shrinkage is huge. The latest Annual Shrink Report issued by Dr. Richard Hollinger and Dr. Read Hayes at the University of Florida puts the total at $36 billion annually.

Shrinkage has several causes: customers shoplifting , employee theft, supplier fraud and administrative errors.

Frequent inventories and accounting audits counts can catch administrative errors and supplier fraud. But stopping shrinkage caused by theft is a larger undertaking.

“There are two kinds of thieves,”says Keith Aubele, CPP, president and CEO of the Bentonville, Ark.-based Retail Loss Prevention Group. “First, there is the opportunistic non-pro. Second, there are professionals working in Organized Retail Crime Syndicates (ORCS) — vast organizations that buy stolen goods from professional thieves for pennies on the dollar and then repackage and resell the goods to mom-and-pop stores, back into the retail pipeline, internationally — through any of a number of markets for stolen goods.

“Employees are the front line of defense — as well as the most economical defense — against shrinkage losses.”

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Motive, Means and Opportunity = Occupational Fraud

May 15, 2015 by Staff Editor Leave a Comment

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.

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Mystery Shoppers Can Help Your Bottom Line

May 13, 2015 by Staff Editor Leave a Comment

Brooke wanted to buy a special keepsake to commemorate the birth of a grandchild. She went to a jewelry store in the mall and was planning on spending about $200. There were 2 saleswomen in the store and no other customers. Both of them were having personal conversations on their phones, with one talking about the lack of sales and her concern that she was going to lose her job.

One clerk didn’t acknowledge Brooke, while the other put her finger up in the “just a minute” signal and then turned her back. After looking around for some minutes, and not being waited on, she went to the store next door. Brooke was greeted immediately, helped and spent $250. She repeatedly told the poor service story for months, right up until the store closed.

Everyone has experienced poor customer service in person, on the phone or via a web site, but they probably didn’t complain to the business. When most people are unhappy they show it with their feet and eyes, they’ll leave a store or web site and not return. A customer is 4 times more likely to go to a competitor when the problem is service rather than price or product (Bain & Company).

Obviously, good customer service has a significant impact on the bottom line. A 2% increase in customer retention has the same effect as decreasing costs by 10% (Emmett Murphy & Mark Murphy). Also, it costs about 6 times more to acquire a new customer rather than retaining an existing one. It’s just smart business to try to hang on to them.

One of the ways to evaluate your business’s customer service is to use mystery shoppers. A mystery shopper is an outside person who shops your business (in person, on the phone or via web site), usually purchases a product and evaluates the experience. You set the parameters of the information you want collected — including identifying loss prevention issues.

Mystery shoppers help you determine your problems before they turn into lost revenue. They give you the consumer’s perception of and experience with your customer service, as well as other concerns. It’s an effective way to get real-time feedback. Then, based on the identified problems, you can develop and implement the appropriate corrective procedures and policies.

Smart business owners know the adage that the product gets the customer in the door, but service is what gets her to return. People who contact your business have a need, providing you the opportunity to make a sale. The method of the sale gives you the chance to build positive word of mouth and strong consumer loyalty, which contributes to higher profit margins and a healthy bottom line.

Filed Under: Featured Tagged With: Alpha 2 Alarm, Alpha 3 Alarm, Alpha High Theft Solutions, Alpha Jewel Lok, Alpha Nano Gate, Alpha Security, Alpha Spider Wrap, Anti-shoplifting training, anti-theft devices, anti-theft tags, Employee Theft, Georgia Alarms systems, Georgia shoplifting prevention, Georgia shoplifting systems, Loss Prevention Seminar, Retail Anti Theft Devices, retail security and monitoring

Employee Theft and How to Prevent it

May 7, 2015 by Staff Editor Leave a Comment

Now, 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.

Filed Under: Shoplifting Prevention Tagged With: Anti-shoplifting training, anti-theft devices, anti-theft tags, anti-thefts devices, employee background checks, Employee Theft, Georgia Alarms systems, Georgia shoplifting prevention, Georgia shoplifting systems, Prevent Shoplifting, Retail Anti Theft Devices, security devices

Background checks and What to Look for

May 4, 2015 by Staff Editor Leave a Comment

When hiring a new employee and you need to do a background check, Do you know what you need to look for to make sure you have the right candidate? First of all, you need to be knowledgeable about the laws regarding background checks in your state. What Washington seems reasonable, may not quite cut it for California and vice versa. Due you due diligence before attempting to do a background check without knowing the Ins and outs of the law. Make sure that your process about hiring and doing background checks are consistent throughout the company, you do not want to be the target of an employee discrimination lawsuit because of different treatment to different possible candidates.

What You Need To Know About Background Checks

April 29, 2015 by Staff Editor Leave a Comment

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.

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What Do You Really Know About Employment Background Checks?

April 29, 2015 by Staff Editor Leave a Comment

You probably know what employment background checks are… you might have even had them run on you in the past. But do you really know what an employment background check includes? And if you are responsible for or are assisting with your company’s hiring… do you know what you should be asking for when you ask for “background checks”?

When Loss Prevention Systems runs employment background checks for Retailers, most are interested in a potential employee’s previous criminal record. In many States we can look at their record “State wide”. This means that we access the Crime Information Center for that State. That database is maintained by each State. For example, in Georgia, it is the Georgia Crime Information Center (GCIC) and it is run by the Georgia Bureau of Investigation. All State, City and County arrest and conviction records in the state of Georgia are fed into this system. It is the same database used when a Police Officer stops someone in a traffic stop and “checks their record”.

There is no such thing as a “Federal Records Check”. It does exist but civilians do not have any access to it under any circumstances. If a company tells you they do, they are outright lying. The National Crime Information Center (NCIC) is restricted only to Law Enforcement. It is a serious felony for someone to access it. Many years ago I asked a Congressman why we could not have legitimate access to NCIC. His response is that it will never happen as unemployment would rise sharply. Wow, they do not care if we hire criminals, have thefts and crimes caused by them, they just do not want unemployment to rise?!?!?

Not all States have State wide records checks available. In that case we run them by county. The trick is to figure out which counties. We can make an educated guess based on where the applicant indicates they have lived. However, we frequently find that applicants will lie or omit a location where they have lived that is associated with criminal records. So what is the solution?

How about “social trace”? Ever heard of that? No, it’s not a new thing on Facebook or Twitter. It’s a check that we run on an individual’s social security number that allows you to know what states and addresses the person has lived in and what other names they could have used. Sometimes, we get a red flag because a female’s maiden name wasn’t listed and pops up as an alias, which is pretty common and obviously nothing to worry about… but other times, we get a red flag on a social trace because the individual has used entirely different aliases—not misspellings, completely different names!

When we run an employment background check for a customer, we like to run a Social Trace first. This tells us then where to search the criminal records. That keeps you in control, not the applicant. By the way, Social Traces are really inexpensive.

We see it all around here. To date “the record” is held by an applicant that had over 50 pages of arrests and convictions. Many of those were VERY serious crimes that were recent. This is the kind of person that you would never want near your family, friends or employees. There’s no telling what a new day will bring. But for you, and your company, trust us when we say that it’s better for you to find out first.

If you’re not running a social security trace on your potential new hires, you could be missing out on crucial information that will keep your workplace environment safe and hold down on employee theft.

Filed Under: Featured Tagged With: EAS Devices, Employee Theft, Georgia Alarms systems, Georgia shoplifting prevention, Georgia shoplifting systems, Loss Prevention Seminars, Retail Anti Theft Devices, retail security, retail security and monitoring, security devices, Shoplifting Prevention, shoplifting statistics, surveillance

The Truth About Internal Theft

April 29, 2015 by Staff Editor Leave a Comment

Do you know what small business owners and Loss Prevention professionals have in common? In my career, I have found that there is no other business unit in a retail company more concerned about the financial health of the company than the LP department. Our life goal is to SAVE money, all while finding ways to increase sales and profitability, improve margins and assist in improving operational efficiency. Doesn’t that sound like a savvy business owner to you? Reversely, as a small business owner, you’re plagued by theft. You may also find yourself asking, where is that theft coming from?

If you do some online research, you’ll probably find a ton of sites and quotes that all say internal theft causes more financial damage than external. Well, that’s not entirely true. External theft has steadily been on the rise and causes millions of dollars in loss every year. The same also holds true for internal theft. What these statistics do though, is misrepresent internal theft. Yes, your employees sometimes steal from you, but that doesn’t mean 1 out of every 3 are. What that means is those employees who do engage in theft, are taking you for a LOT more than an average shoplifter. Last year alone, personally, I managed over 650 cases. 540 were shoplifters. The dollar amounts associated with those cases were almost the same in both the internal/external category.

Take this for example. Last year, I was contacted by some inventory control guys regarding a specific electronic device at a store location. We looked at a store inventory report and it showed that this one sku was showing a negative 600 on hand at this location. By investigating transaction records, we found these units had been refunded to the store over a period of time. Further investigation showed that a single cashier had conducted nearly 600 refunds of this particular sku and was able to pocket nearly $65,000 in cash from ghost refunds. It would take a lot of shoplifters to equal that dollar amount, but this was only ONE employee.

What I want owners and managers to understand is the reality of the internal theft problem. Understand that not all of your employees are thieves, but that 1% that will steal from you, will steal over and over again. As an owner, you should have internal control measures in place that limit your exposure to losses, and at the very least, a descent CCTV to review those losses when they are uncovered. While shrink will always be a part of life in retail, you have the power and the tools to make that financial impact as less as humanly possible.

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Background Checks and Employer Liability

April 29, 2015 by Staff Editor Leave a Comment

Seems like every time I turn on the news, I hear about another person who walks into their office and starts hurting people. Is this happening more and more, or do we just hear about it more? Do you ever think about those companies and wonder what goes on after something like that happens, or even before? Even more perplexing is a recent airliner crash that seemed to be caused by one of the pilots. Every day, employers around the country have the potential risk for a disgruntled, or mentally unstable employee to cause harm to their staff, or customers. Can you prevent this and if not, how can you limit your liability?

My personal opinion on random acts of violence is that you can never prevent every occurrence. You can definitely limit your exposure to the risk by barring firearms in your workplace, having a no tolerance violence policy and running background checks on all of your employees. This however, will not stop someone that is hell bent against causing harm. Again, my opinion here is that if someone wants to “go postal,” nothing on Earth will stop them. That’s a fact of the world we live in. There are ways to limit liability on your end (as a business owner).

Take for example the other day. I terminated an employee for performance related behavior. Hours later, another employee came to me with a screen shot of the terminated employee’s social media page. There, was a threat of violence towards the store and myself personally. I immediately contacted the local police. Did I really thing this person was capable of what they were posting on social media? No. Did I see it as a way to blow off steam from being terminated from a job? Absolutely. Then why did I contact law enforcement? The idea that a threat was made forces me to take that approach. Had I shrugged the threat off as “blowing off ;steam” and then 3 hours later I had that former employee burst through the front doors with a firearm, I, and my company could be potentially liable for any injuries due to failure to appropriately react to a known threat; sounds completely crazy, but it’s the truth.

You can relate this to running background checks on your employees. Let’s say you don’t perform a background check on a new hire and with 2 weeks he loses his temper with a fellow employee and severely injures that employee. Worst case scenario is that employee is no longer able to work. You find out after the incident that your new hire has 15 arrests for domestic violence and other crimes against persons. You could be potentially held liable for creating a violent workplace due to a failure to properly screen applicants. Again, it sounds completely crazy but this has happened and will continue to happen. Background checks are standard practice and every single big box retailer across the country and they should be for you as well.

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How Are You Preventing Shoplifting?

April 23, 2015 by Staff Editor Leave a Comment

There is always so much debate about how to fight shoplifting in the retail industry. There are loss prevention teams in all the major retail stores, and the management team at any other store is, if not trained at least aware of what to do when facing a shoplifting accident. Millions of dollars are lost due to shoplifting, and the matter seems to get bigger every day. New government policies are making sure shoplifting is punishable accordingly, and retail stores are spending millions of dollars in security and personnel to fight this crime, but why is that not enough? Follow the links to read more about this and other stories.

Shoplifting & Loss Prevention: Do We Need A Fresh Look?

Traditional Loss Prevention is not working. If it was working, the retail world would not still be suffering $35 million or more a day in losses. If it was working, retail owners and store directors would not be going through security and loss prevention officers or the security companies they represent like the free samples they often hand out to customers. Security experts and loss prevention companies would not be constantly scrambling for new accounts, or be in conflict with the accounts they service.

Shoplifting is one of the least detected and most unreported crimes. Stock control in many stores is so deficient that few retailers know how many goods they are losing to shoplifters or their own staff. Statistically, so long as shrinkage does not exceed 2-3% of goods sold, retailers pay little attention to shoplifting. There are also financial incentives for managers to increase the bottom line profits. The bonuses they receive are often based on profit margins, and paying for security services can be a drag on profits. Managers are under constant pressure to justify expenses in a corporate world driven by profit.

Shoplifting Prevention: Top 5 Tips

Shoplifting is of major concern to vendors, so much so that it’s considered normal to budget 10-15% in losses due to store theft. This means each honest customer is paying 10-15% more due to the sins of his fellow shoppers. This budget figure can be reduced by one of your company’s most important assets: Your employees. Real, live, people. While we recommend security cameras, computerized security tagging, door security guards, and even undercover security personnel, this article will address how your employees – often the most involved people with your customers – can also be involved in shoplifting prevention. Here is a Top 5 list of suspicious behavior often exhibited by shoplifters, all of which are easily spotted by employees.

Baggy or oversized clothing. There’s reason it’s called “baggy” – shoplifters are using their clothes as veritable bags, stuffing their stolen ware on their person as if it’s part of their wardrobe.
Hands in pockets, or hidden otherwise. A regular shopper has nothing to hide. In contrast, a shoplifter has everything to hide.
Teaming Up. Shoplifters might hang together when planning or passing along stolen items. If you see two or more people in a group speaking in low tones, looking over their shoulders, diverting their eyes, or of course, stuffing their or others’ pockets, it’s a sound suspicion of illicit activity. Regular shoppers, on the other hand, will likely happily chat away at full volume, and keep their non-purchased items in full view.

Japanese organization considers shared biometric database to combat shoplifting

The National Shoplifting Prevention Organization (NSPO), a nonprofit organization of major Japanese retail businesses, is considering developing a biometric database to share facial recognition data in order to combat shoplifting across Japan, according to a report by The Japan News.

The NSPO said it would consider allowing retail stores to share the facial data with other stores in the same industry or other establishments in the region.

The organization proposes to set up a shared biometric database, and store managers can enter the facial data of shoplifting suspects into said database to continually monitor the suspects as he or she visits other stores.

Many retail stores have been using biometric technology in the past five years, however, the majority establishments that use facial recognition do so without publicly notifying any of their customers.

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