Loss Prevention and Solutions

shoplifting1The Holiday season does not start for some weeks yet, but if you are in the retail industry preparations for the busiest time of year begins months in advance. The retail industry loses billions a year due to shoplifting and employee theft making prevention all the more significant and solutions to decrease shrinkage pivotal in the profits and loss of a store. Read more about loss prevention by following the links below


Taking the Bite Out of Organized Retail Crime   

“Store robbers…always work in gangs of two, three, or four in number, in order that their operations may be quickly conducted… The first thing to be done upon locating in a large town or city is to select the place upon which they design to work… When they finally decide upon a store to be robbed, they are fully posted with regard to everything that pertains to the business…”

A hundred and fifteen years ago, Allan Pinkerton, America’s “first detective” and founder of the Pinkerton National Detective Agency, penned those words in his book “Thirty Years a Detective: A Thorough and Comprehensive Exposé of Criminal Practice of All Grades and Classes”. In 2014, the tenth year that the National Retail Federation (NRF) conducted its Organized Retail Crime Survey, ORC has remained a staple of criminal enterprise in the United States, accounting for known losses in the neighborhood of $30 billion annually.


The Tactics of ORC

Organized Retail Crime (ORC) has been the bane of retailers for years and was first addressed by merchants in the late 1980s. Since then, ORC has grown into a yearly multi-billion dollar business that not only injures the retailer, but also the consumer, who has to pay higher prices. There is another loss — the one to communities in the form of lost tax revenue, which has a direct effect on state and local governments and school budgets causing a direct impact on the quality of life.

Since the early days, when ORC was first recognized, retailers have taken great steps to combat the crime. The most important step was the education of lawmakers who have passed laws across the nation combating Organized Retail Crime. Many of today’s retail trade organizations such as the National Retail Federation (NRF), the Food Marking Institute (FMI), Retail Industry Leaders Association (RILA), along with many other organizations have taken up the fight.


BearCom Informs Retailers on How to Use Two-Way Radios for Loss Prevention

BearCom, a nationwide provider of wireless communications equipment and solutions, offered suggestions on how two-way radios can help reduce loss during the busy holiday shopping season and all year round.

Loss, also called shrink, consists of shoplifting, employee or supply fraud, organized retail crime and administrative errors. According to Marianne Wilson at Chain Storage Age, “Growing shrink concerns have put loss prevention high on the agenda of retailers.”

“More than $100 billion worth of merchandise is stolen from retailers every year. That’s about 1.5 percent of retail sales, just in the United States,” said Hugh Johnston, Product & Purchasing Manager at BearCom. “The most effective way to prevent loss is to have a vigilant and visible staff in constant communication.”

Johnston gives some suggestions for basic shrink prevention that are especially important during the hectic holiday retail season:

Inconspicuous communications – When an employee needs to contact a manager or security personnel, they should do it in a way that doesn’t bring attention to the situation. Two-way radios with earpiece accessories enable quiet and discreet communication.


Shoplifting News

shoplifting2The people and the methods shoplifters use nowadays should not come as a surprise for any of us. From the elderly to the handicapped shoplifting is a crime that seems to have no age nor race attached to it. For a retail store, prevention seems the solution that makes sense, and can keep the store from losing its profits.

To read more about this follow the links below.


Shoplifting Suspect Shirley Mason Used Wheelchair Cart For Getaway: Cops

FRUITPORT TOWNSHIP, Mich. (AP) — Police in Michigan say they arrested a shoplifting suspect following her slow-speed getaway in a $1,200 motorized wheelchair shopping cart taken from a Wal-Mart.

The Muskegon Chronicle (http://bit.ly/1wgjeQT ) says police located 46-year-old Shirley Mason about 2 miles away, riding the cart with $600 in clothing.

A customer called police Monday night to report someone riding a shopping cart from the lot at the store in Muskegon County’s Fruitport Township.

Police say Mason told them she couldn’t find anyone to pick her up from the store and took the wheelchair cart “because she didn’t feel like walking.”

Authorities say Mason told officers she planned to sell the clothing.

Mason is charged with organized retail crime and has a probable cause hearing Sept. 23.

Mason doesn’t have a listed phone number.


Police: Mom and DAughter caught shoplifting

HOOSICK — State Police say a mother and her 23-year-old daughter were caught shoplifting from a supermarket. Vicki Meyers, 43, and her daughter Toni were allegedly seen by employees taking items at a TOPS supermarket and hiding them in their purses. According to authorities, they left the store with more than $70.00 worth of merchandise. The pair have both been charged with petit larceny.


Teacher accused of shoplifting using child

Wesley Chapel, Florida — A Pasco County teacher has resigned from her position, accused of shoplifting and using her young daughter to hide the stolen electronics.

Friday, parents are in shock that a trusted middle school science teacher sits behind bars.

Investigators say Amanda Hammon took her three-year-old on the shoplifting spree and had the child carry her backpack stuffed with the stolen goods from a Walmart in Wesley Chapel.

Hammon was a teacher at John Long Middle School in Wesley Chapel, and now, she’s a Pasco inmate without a job.

Investigators say this wasn’t just a one-time crime. In the past week, the middle school science teacher is accused of stealing electronics from Walmart four times with her daughter in tow.

Arrest records show Hammon confessed she’s been shoplifting to support her drug habit.


Shrinking Margins? Internal Controls Can Help

shoplifting4Occupational fraud is a problem for most businesses, both large and small. Fraud is committed when an employee, through a deliberate and usually illegal process, misuses or misappropriates the resources or assets of a business for their own benefit. It’s willful and deliberate worker misconduct, which causes the business to suffer financially due to theft of time, services, inventory or money.

This type of fraud is such a widespread and injurious problem that approximately 1/3 of small businesses close due to it, mostly because it goes undetected. This is a regrettable situation, because it’s largely preventable if properly monitored internal controls are in place. It’s usually uncovered only by accident or through a whistleblower.

Actively managed internal controls can prevent or detect most types of misappropriation of assets and fraudulent financial reporting. They’re processes created to track and achieve goals in specific categories (i.e. operations, time keeping, inventory, financial reporting and compliance with applicable laws and regulations). While most of these processes are universal, specific ones may need to be added to address unusual situations or particular fraud concerns.

These controls should include operations and finances. They’re designed to create a system which protects assets through prevention and timely detection of unauthorized or illegal employee behavior. Some of these processes include: monitoring the flow of paperwork; reading, understanding and acting on financial reports; noticing and acting on the behaviors and attitudes of employees; listening to and acting on employee tips and hints about problems.

To start creating internal control measures a business can review past and current procedures, events and concerns – the company’s strengths and weaknesses, investigate and evaluate employee complaints, acknowledge and list all of the problems/symptoms, etc. This is done in a methodical timely way. It’s important to note that the controls are fluid and will need to be reviewed and changed over time.

Well managed, easy to use and structured internal controls are considered to be one of the most effective deterrents to occupational fraud. However, these controls are only paper work if management doesn’t take action. No program, by itself, will keep employees from stealing. Supervisors must be responsible and take action if it’s to be effective.

Opportunity (lack of controls) and ineffective or no consequences are 2 of the main reasons employees commit fraud. It’s unreasonable and naïve for mangers to expect their workers to be atypical. Yet they do, only to be taken advantage of. Unfortunately, many have learned this lesson the hard way.

Nicole Abbott – writer, educator and psycho-therapist


 

How Do My Employees Steal From Me?

theft (13)A better way to look at this may be to talk about what they steal and break it down from there. Employees can steal four types of things: cash, merchandise/product, supplies (& tools, equipment…) and time.

Cash in a retail environment is king. But we tend to put the youngest, most in-mature and least trained person in charge of it. Cashiers tend to fit that description. That is a fact of retail life. But we can manage through that. We have to put procedures in place to deter theft. It has to start at the time of hire. A clear message both verbally and in writing needs to be established. After that follow up is key. Many times we let multiple employees ring up transactions on one drawer so there is no accountability. One way to counter this is through random cash drawer audits. These unannounced audits will show if a shortage has occurred. Action can then be taken. Many times employees stealing cash will accumulate it in the cash drawer before removing it. If your cash audit reveals an overage that maybe what you are dealing with.

Merchandise or Product regardless of what it is, is worth something to someone; that is why you are in business. So if an employee can steal it, they could take it for their own personal use or for resale. Again we have to set up an environment where it is known that this will not be tolerated. Many times when employees are caught stealing, the business owner keeps them employed and has them pay it back. OMG, thinking about this, pay you back with what? They were stealing in the first place. Most likely they will do so again to “pay you back”. Remember, this person has proved that they are the worst of the worst. Oh yes, there may be a sob story. But they stole your assets, the reason does not matter.

Supplies, your equipment or tools are often over looked. I once conducted an investigation for a major resort that had a problem with a few thefts from guests only. It turned out that hundreds of thousands of dollars were stolen in cleaning supplies, furniture, toilet paper, fuel, etc.

We tend to overlook this area because we think it could not add up to much. You have to get your head around that. A roll of toilet paper and a can of cleaning solution every few days add up. Multiply this by a number of people and the situation is quickly a serious loss. Audit your supplies. Investigate when tools or equipment come up missing. Hold people accountable. You should assign or make certain employees accountable for these items. They can and should control them.

Both merchandise and supplies can be removed from your business on the employee’s person, discarded in the trash to be recovered later, out with a friend that is visiting or in collusion with a vendor.

Time is often never thought of in employee theft situations but can be one of the largest losses. Employees steal time by simply falsifying time cards or sheets. For example, a co-worker friend clocks them in but they are not there yet. Even 10 minutes, two or three times a week adds up to big dollars. From personal experience in the over 2300 employee theft investigations I have conducted, it has never just been 10 minutes here and there. This type of theft becomes addictive quickly and will grow to large amounts unless checked.

Time can also be stolen by managers who have control of payroll. I once had a manager set up a fake employee with a bank account. He submitted payroll information and deposited the checks. He embezzled around $20,000 before we investigated him.

All of these types of theft can be prevented. Policy and procedure that is followed and enforced is your very first line of defense but there are other techniques. You can learn more about them in our live- in- person or webinar training sessions. Contact us if you would like more information at 770-426-7593.


When There Are Children Involved

theft (10)When we think about shoplifters and creating policies on what how to apprehend them, and what to do with them during and after the initial confrontation, we are doing so with a general image in mind. We are acting on an image of an adult shoplifter, who may or may not become physically aggressive. What many owners and managers frequently overlook is what to do when there are children involved during the shoplifting incident.

There is a sad reality that many shoplifting situations do involve children. Sometimes it is actually the children (or minors under the age of 18) that are the ones stealing. Sometimes it is adults- parents, caregivers, relatives- that bring children along while the adult is stealing. In some very unfortunate examples, the adults might actually be teaching and encouraging the children to steal for them.

As a result, policies and procedures should be in place to account for these situations. If you are trying to figure out what to do while the incident is already underway, you can end up in serious trouble if you make the wrong judgment call. So here is a quick overview of how to handle some of these situations.

What to do if a shoplifter is a child/ minor under 18 years of age? Start by determining if there is a responsible party somewhere in the store. This needs to be someone over the age of 18 that can oversee custody of the child. It should be a parent or guardian of some sort. A minor babysitter, older sibling, or friend is not who you want.

Next step is to use your best judgment for the shoplifter’s intent. A four year old taking a candy bar has less criminal intent than a seventeen year old stealing a pair of jeans. Determine from there if you are calling the police to prosecute. Ideally any juvenile in your custody should be released to either a parent or guardian, or the police within thirty minutes or less. Always have a witness present when you have a child in your custody. Never release a child out on their own, as you can be held liable if they are hurt, etc after leaving your store.

If the shoplifter is an adult, and they have children present, decide if you are calling the police or not. If you are prosecuting the adult, make sure the local law enforcement are aware that there are children present. They will need to make special arrangements for those children. While the adult shoplifter is in your custody, under no circumstances should the children be separated from that adult.


Apple Store and Iphone theft

theft (12)All across the country carrying a smart phone is like carrying cash in your hands.   Many thieves consider a smart phone as easy to steal as snatching a purse from an unsuspected woman. Lost and stolen phones are costing the American consumer millions of dollar a year according to some recent research and according to some news smart phone theft is happening at stores as well.

Follow the links below for more information about this and other stories.


Six Apple Store employees nabbed in iPhone theft ring

Sometimes it is those on the inside that you need to be worried about the most. In Fort Lauderdale, six Apple Store employees were snagged by the cops, as law enforcement smashed an iPhone theft ring that worked out of an Apple Store at the tony Galleria Mall. The six worked together to rip off the store out of 600 iPhones, valued at half a million dollars.
The scheme involved a number of thieves who wandered into the Apple Store, pretending to be customers. In the store, these “customers” would be helped by one of the six employees in on the scam, who would exchange a stolen iPhone for a brand new unit. The Apple Store employees who helped the transactions go through, were paid between $45 and $75 per unit for facilitating the exchange.

The cops arrested former Apple Store employees Devon Persad, Daniel Michael Scotti, Adam Alvarez, Anthony Joseph Tranchida, Sadia A. Dandia, and Otis Jerrell Ferguson. A seventh person arrested was Best Buy Mobile employee Sean Flynn. Flynn provided a list of serial numbers from smartphones on the shelves at Best Buy Mobile, to the other criminals. These numbers were used on the new iPhone models stolen from the Apple Store.

The cops are looking to identify those who brought the stolen phones into the Apple Store. They are also still looking to find the buyers of the new units that the stolen phones were exchanged for. A Broward Country prosecutor says that the phones were probably sold overseas.


Ex-Fairfax Deputy Headed To Trial On Shoplifting Charges

The case of the Fairfax County deputy charged with shoplifting at the Leesburg Target store will go to trial.

Robert H. Palmer Jr., 50, of Leesburg, appeared in Loudoun General District Court Tuesday morning. Judge J. Frank Buttery Jr. set a trial date for Sept. 23.

Palmer has been charged with two counts of petit larceny under $200, a Class 1 misdemeanor that carries a sentence of up to 12 months in jail and a fine of up to $2,500.

The case, first reported in May, gained national attention after Dallas Northington told The Washington Post he was fired as an assets protection specialist for Target after reporting two incidents of apparent shoplifting in which the suspect shown on surveillance tape was recognized by his superiors as Palmer, who’s worked for the Fairfax County Sheriff’s Office for 20 years.

Northington said he filed a complaint with the Leesburg Police Department as he did routinely in such cases. However, days later he was fired, told by his managers at Target that he had not followed company procedures.

Following the publication of Northington’s story, the Leesburg Police Department released a statement July 14 about its involvement in the case. According to the department, the initial complaint was filed at approximately 11 p.m. Tuesday, May 27. “The report was documented however, the reporting loss prevention officer did not witness the actual theft,” it said. During that investigation, “the individual involved in the alleged theft was positively identified as a Fairfax Sheriff’s Office employee.” On May 30, Leesburg investigators notified members of the Fairfax sheriff’s office about the report.

There the case stalled.


Mother leaves kids in store after shoplifting

Published on Aug 15, 2014

DELAND, Fla. (WKRC) — A Florida mother’s attempt at shoplifting ended with her running from police and leaving her children behind.

Deland, Florida police said Rebecca Stoltz went shopping at Wal-Mart with her 6-year-old daughter and 9-year-old stepdaughter. When she allegedly tried stealing $44 of clothes, she got caught by security. In the panic of getting caught, police said Stoltz ran from the store and left her children behind.

Other parents shopping at the store said they were outraged.

Police said store security found the girls and they were both, “Clearly distressed and very emotional and both were crying.” Investigators said Stoltz knew what she did because she told a friend to go pick the children up from the store.

Police eventually arrested Stoltz who faces child abuse charges.

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The Face of a Shoplifter

theft (8)Winona Ryder is probably one of the most famous celebrities that were caught stealing and prosecuted for shoplifting. Lindsay Lohan the most recent one was also prosecuted for shoplifting. Although shoplifting is a crime and you can be charged and prosecuted, many people neglect to impart the importance that shoplifting deserves. Who is the shoplifter you may ask? From celebrities to news anchors and candidates for the senate, shoplifting affects many people, and the financial ramifications of this crime affect many people in the retail industry and local economies every year.


If You Want To Keep Your Job As A News Anchor, Don’t Get Caught Shoplifting

As celebs like Wynona Ryder have demonstrated, you can get caught shoplifting and still go on to have a decent career in the public eye. Perhaps Ryder’s redemption tale will give some hope to a California news woman who has resigned her local anchoring gig after being charged with shoplifting.

Sabrina Rodriguez had been with FOX40 in Sacramento since 2011, but police allege that in early 2013 she began helping her fiance steal from stores and fence those shoplifted items.

Texts from the fiance to Rodriguez show him discussing the alleged theft of expensive sweaters and purses from stores like BCBG. One text in response to the fiance reads, “Awesome. I love when a plan comes together.”

Then in March 2014, the fiance was reportedly spotted on camera leaving a Coach store with wallets he did not pay for. Rodriguez admitted to being in the store with her fiance but denied being involved in any theft.

However, police claim that security camera footage shows Rodriguez pointing out wallets to her fiance before he puts them into his bag.


Ariz. family accused of shoplifting $15K worth of clothes

Police arrested five people in Phoenix on charges of shoplifting more than $15,000 worth of clothes from different retailers — and it’s the suspects’ relationship that’s making headlines.
ABC reports that the police say the suspects are from the same family. As FOX NEWS says, the family that shoplifts together is arrested together.

Officials from the Phoenix Police Department say that the suspects had worked together to steal clothes, mostly lingerie, from retailers starting as far back as November of last year.

Officers arrested them Friday in their home where they found clothing items with tags and security devices still attached. Police say that the family used the stolen items to trade for drugs or to sell in yard sales held almost weekly.


Store Employees Help Catch Shoplifting Suspect 

A shoplifter didn’t get far when he tried to steal from a Rapid City hardware store.

Ace Hardware employees noticed Keith Ericson push a cart of merchandise out of the store without paying.  They tried to stop him as he loaded the items into the back of a truck being driven by his wife.  She started to drive away as Keith jumped in the bed of the truck, but he fell out before they got out of the parking lot.  When Dianna Ericson got out of the truck to help him, a witness grabbed the keys so that the couple couldn’t drive away.

Police say Keith is also a suspect in the theft of four drills from Walmart.  He’s charged with theft and possession of drug paraphernalia.  Dianna is charged with DUI and driving with a suspended license.


Employee Fraud – Trust, But Verify

theft (10) During the Cold War arms control treaty negotiations with Mikhail Gorbachev President Ronald Regan became famous for a saying based on an old Russian proverb, “Trust, but verify”. He used the adage to describe the need for transparency in political relationships. But, today it has a broader meaning and can be used as a guideline for establishing trust between an employer and employee.

Many business owners, executives and managers don’t like to face the fact that some of their employees have, are or will be committing fraud – that product, materials and/or money has, is and will be walking out the door. For a variety of reasons they choose denial as their policy for employee theft and don’t address it. Unfortunately, employees take advantage of this and their employer’s trust.

One of the main reasons employee theft can be difficult for owners and managers is that they feel it’s a personal affront. They feel betrayed and believe it’s a personal issue, not a business or legal issue. It’s important for them to understand that it’s an operational and legal issue, not a personal attack.

The “Trust, but verify” concept can be used to develop a strategy. Managers can trust their employees, as a whole, while establishing transparency and accountability in daily business operations. The Association of Certified Fraud Examiners 2012 Report to the Nations on Occupational Fraud and Abuse (ACFE 2012 Report) makes several recommendations on how to minimize fraud.

* Anti-fraud training – Organizations who have training programs for employees, managers and executives have less costly losses and shorter durations of fraud.

* Means to report – Providing people with ways to report suspicious activity is a critical part of prevention. Fraud is almost 3 times more likely to be detected through employee tips than any other method of detection.

* Controls – Companies should establish, monitor and maintain 3 areas of controls – general internal, physical and computer/technology based.

* Screening new employees – This is an area where employers can be lazy. Many times hiring is done by the “I like him, he’s hired.” method. This is an important area to do the due diligence.

* Division of responsibilities and oversight – Don’t give too much responsibility to one person and establish checks and balances in everyone’s job. Fraud is committed by a person who the employer trusts, that’s how they’re able to get away with it. In small      businesses it’s most commonly perpetrated by a family member or friend.

* Pay attention – 81% of fraud perpetrators display obvious red flags: living beyond their means, financial difficulties, unusually close ties with vendors or customers and unnecessary controlling/secret behavior (ACFE 2012 Report).

Employees will steal from their employers, it’s not a matter of “if or maybe”, it’s a matter of “when and how”. A responsible company manager will accept their personal and fiduciary responsibility to protect the company, its profits and the honest employees by establishing and following firm guidelines which don’t enable fraud.

Nicole Abbott – writer, educator and psycho-therapist


 

Social Media Helps Authorities Catch Criminals

law-3As of the first quarter 2014, Facebook had 1.28 billion monthly active users. This of course is only one social media site that people tend to gravitate to and one of the many sites authorities are using to capture criminals dumb enough to post selfies with stolen merchandise, or bragging about their crimes. Social media sites are playing many roles in the lives of people, from keeping them connected to friends to preying on victims.

For more about this and other stories follow the links below.


Facebook Led These Criminals To Face Time Behind Bars

Doing a crime is inherently stupid, but boasting about it on social media takes it to a whole new level of idiocy. Bidness Etc takes a look at some of these ‘criminal geniuses’ and how their addiction to social media got them caught.

They say social media is nothing but a waste of time and intelligence. While we agree with this notion to a certain extent, we believe that it is actually the horde of brain-dead, half-witted, below-average excuse for human beings that destroy social media’s reputation on a daily basis.

We believe that this epidemic (i.e. stupid people running rampant on social media) is because of the inherent nature of the internet. You see, everyone – even criminals – have access to it, can sign up for various sites, and are then free to express their worthless opinions there. Speaking of petty criminals, there have been many instances in the recent past where the criminal’s own stupidity on Facebook Inc (FB) helped the law catch them and put them behind bars for good. The law’s triumph not only restored our faith in the legal system, but it also gave us hope for the future of social media sites as well.


Criminals using social media sites to prey on victims

NEW ORLEANS —In the past three weeks, three similar crimes happened in the Crescent City – all with one common thread: social media.

Police said sites like Tagged, Tinder and Kik have been used to lure victims to potential danger, resulting in robberies and carjackings.

The first case happened in the 1600 block of Baronne Street, where police said a man met a woman and was later robbed by three men.

The second crime was committed in the 2100 block of Danneel Street by 10 men – four of whom had guns.


Digital Detectives: Social Media Helping Police Put Criminals Behind Bars

ANNAPOLIS, Md. (WJZ) — Anne Arundel County Police say social media is helping them put criminals behind bars.

Rochelle Ritchie explains how.

At the stroke of a keyboard, residents in Anne Arundel County are becoming digital detectives in helping Anne Arundel County Police solve crime.

“We’ve been able to solve crime based on social media tips,” said Lt. T.J. Smith, Anne Arundel County Police.

After one man’s photo was placed on their Facebook page, the comments began to pour in. It didn’t take long for the alleged ATM robber to be put behind bars.

“We have the opportunity to get the message out to tens of thousands, even hundreds of thousands of people at the click of a button,” Smith said.


Loose the Battle, Win the War

theft (1)I read a horrifying news article about a man, who had been convicted of shoplifting, winning a lawsuit to the tune of $500,000. That’s right- half a million dollars paid out to a man who was convicted of shoplifting from a store. The report was horrifying for two reasons.

The first, because he was a shoplifter who might never have to work a day in his life again, basically was paid out to steal. Two, because the reason he won his suit was because he was injured during the course of the apprehension as a result of his shoplifting.

It raises a very important question of where do we, as retailers and business owners, draw the line? Where do we say we will allow this particular loss to happen to avoid an even worse loss? In essence, how do we loose the battle to win the war?

As the news report goes on, this particular man seems to have made a habit of bringing up (and winning) lawsuits stemming from his alleged shoplifting incidents. When the businesses could not win their cases against this man to convict him of shoplifting, he turned around and sued for slander, liable, and wrongful apprehensions.

While this particular situation is probably one of the more extreme examples of how a shoplifting stop can go horrifically wrong, this is not an unrealistic topic for businesses to be aware of.

Any time a shoplifter is stopped, or even approached, we have a responsibility to be right- 100% right. We also have to be able to prove it in a court of law. The days of acting on gut feelings or suspicions are long gone.

We have a right to protect our stores and to make shoplifting stops. We need to do so in a way that is also fair and legal to the suspected shoplifter- lest we also incur a half million dollar settlement at our expense.