Security and Operational Compliance

theft (4)According to the most recent articles from Loss Prevention Magazine, the three major areas where the management or owners have to be vigilant about are internal theft, external theft and operational compliance. These three security areas have to be implemented correctly and to adhere to procedures the management or security team have dictated to be successful. For more information about this and other topics follow the links below.


Security Breaches Trigger Retail’s Big Players to Call for Major Tech Changes

The possible credit card breach at Home Depot Inc. prompted the retailer to speed up its implementation of chip-reading credit card terminals. Major credit card companies, too, have announced they will accelerate efforts to bolster electronic payments security and protect sensitive customer data. These moves could have a large impact on consumer confidence, which has suffered as a spate of cyberattacks hit major companies. But for retailers especially, the implementation of the new systems will take time, and are not a panacea for a company’s security risks.

Home Depot CEO Frank Blake told investors Thursday that the retailer would activate chip-reading technology on its new credit-card terminals by the end of this year. He said the company is “working around the clock” to find a breach linked to stolen credit and debit cards,” the WSJ’s Shelly Banjo writes, but stopped short of confirming an actual breach occurred.


Building A New Defense Team

As technology draws us deeper into a new age of business enterprise, we are continuously bombarded with waves of challenges and opportunities involving those with malicious intentions. These attacks come at us from every direction as the ingenuity of these criminal minds seek new and creative ways to infiltrate our information resources and engage in cyber warfare against our businesses.

In order to survive these reprehensible intrusions, retailers must fight back. We have to defend our ground and take the necessary steps to combat the threat. This requires that we build and recruit the resources that will help us win the battles. We must become cyber warriors in our own right; defending our computer and information systems against those seeking to seize and exploit the lifeline of our business.


Operational Compliance: Inspecting What You Expect (Part 1)

The evolution of the loss prevention profession has required a change in the way that we view what we do and the way that we approach the retail environment.  First and foremost, we have come to recognize that shrink is a much more complicated problem than merely looking at the theft of merchandise.  Shrink is a very complex issue that must take in to consideration a variety of different issues that can lead to losses.  Shrink reduction is clearly seen as a vehicle of profit enhancement, and an integral part of the retail model.  Additionally, we have perspective on how we can influence company profitability in other ways as well, which has allowed us to set our sights on the bigger retail picture.  As a result our shrink management strategies require a multifaceted and broad-based approach in order to successfully design and administer the process.


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.


The Curb Rule

theft (12)If you talk to anyone who works in retail security, they are probably familiar with something called the Curb Rule. It is a limitation made by many large retailers as to how far employees literally can go when they are making a shoplifting apprehension.

The Curb Rule usually states that when making a shoplifting apprehension, if the shoplifter attempts to flee, employees can pursue the subject as far as the edge of the curb of the store’s location. Generally, most stores have a sidewalk in front of them, and the employees should not go past the edge of the sidewalk in pursuit.

The ultimate goal of the rule is to keep everyone involved safe. The further away from the store employees go, the more likely it is that someone will get hurt. It’s not just about an altercation with a shoplifter either, even though a chased subject can be more pressured into trying to fight their way out of the situation.

In one particular incident, I stopped a shoplifter with a cart full of merchandise. The subject turned around and ran, almost getting hit by a car in the process. Had my witness and I gave chase, we most surely would have been hit ourselves. Remember, even shoplifters can sue a store/ company for personal damages if they are hurt during an apprehension.

One of my mentors used to tell stories of how he got a massive scar on his arm. He had been chasing a shoplifter who had climbed a chain link fence. My mentor, slipped while going over the fence, and the top barbs cut his arm. The shoplifter ended up jumping down an embankment and broke his leg. Needless to say, it was quite an expensive mess to clean up. Did I mention that all the shoplifter took was a twenty-dollar shirt?

The Curb Rule has its place as a safety feature as well as for maintaining profits. Often store and parking lot layouts dictate where the boundaries need to be made. Some stores who do not have a front sidewalk need to clearly inform employees of how and where to handle shoplifters, compared to stores with generous sidewalk areas.


Revenue Versus Profits

theft (2)During my last consultation, I had an interesting discussion with a business owner over the difference between high revenue and actual profit. He was under the impression that just because his business had consistently outstanding sales revenue that his business should be extremely profitable. He couldn’t understand why he was having trouble paying his bills and payroll for his employees.

I had to convince him that his sales weren’t where there was a problem. It was everything that was going on in the middle that was taking away from his profits. Somewhere he had operational breakdowns that were eating away at his incoming funds, preventing him from comfortably paying his operating expenses, and then leaving very little left over in the form of true profits.

The fact that he did have exemplary sales and revenue was probably the only reason why he was able to keep his doors open for business. Good sales are vital to a business’s longevity. Unfortunately, if the day-to-day operations are not efficient, all of the work put into generating sales revenue is easily rendered null and void.

Since we knew that he wasn’t having an issue with his sales, we started looking at some of the other possible causes for his profits to be eaten up. We started with his inventory. We looked at where he was spending his money and what he thought were the best and the worst selling products.

In one example, a particular vendor had been telling him that this particular brand was one of his best sellers. As such, the owner was putting in huge orders for the product. After taking a look at the actual sales and the actual on hand inventory, we realized that the sales did not justify the product he had on hand. In fact, based off of actual sales, there was 15 years worth of inventory. The vendor saw this business as an uninformed target and took advantage of it.

By eliminating this unnecessary inventory cost, the business owner was able to save several tens of thousands of dollars a year in lost profits.


Shoplifting News and Other Stories

theft (3)Employee theft costs the retail industry millions of dollars daily, and although the majority of shoplifters are non professionals, the monetary harm they can inflict to a business can be devastating. Employee theft can be undetected by the employer or management for months or even years, and some of the small businesses do not report the theft to authorities when the shoplifter is caught. How can you protect your business from employee theft or shoplifting?Are you doing enough to protect your business from losses? Do you need solutions for your business and don’t know where to start? call us and we will be happy to talk to you about your business needs.

To read more about shoplifting news follow the links below.


Employee at Wal-Mart in Franklin charged with theft

The Franklin Police Department received a complaint Friday about a possible employee theft at Wal-Mart.

Police were told that the employee, Timothy Youngblood, 43, who worked in sporting goods, stole about $5,000 worth of merchandise over the span of a few months, according to a news release from Franklin police.

Two Franklin officers watched store surveillance video, and officers recovered about $1,068 worth of Wal-Mart property from Youngblood’s East Cedar Street home. Police found sporting goods, tents, appliances, cookware, gourmet coffee and high-end coffee brewers.

Youngblood was charged with theft by unlawful taking over $500 but less than $10,000. His wife, Shawn M. Snay-Youngblood,


Pennsylvania’s top court rules $75,000 fine for employee’s theft at casino illegal

The state Supreme Court on Tuesday found that a mandatory $75,000 fine imposed upon a poker dealer convicted of stealing $200 from the Rivers Casino is unconstitutional.

“The fine at issue here, both in an absolute sense and in a comparative sense, is strikingly disproportionate to the manner in which other crimes are punished in Pennsylvania. That the fine is mandatory merely exacerbates the disproportion,” wrote Chief Justice Ronald Castille in the unanimous, 33-page opinion.

Matthew Eisenberg, 29, was charged with misdemeanor theft under the Gaming Act after taking $200 in poker chips from Nov. 26-30, 2010, from the gaming table where he worked at the Rivers.


Knox Trustee’s ‘ghost employee’ found guilty of theft

A Knox County jury on Friday agreed with the state: Former Trustee’s Office employee Delbert Morgan was a “mystery,” a “phantom” and a “ghost.”

He rarely if ever worked. And yet he collected almost $152,000 in salary and benefits during the four years he was with the county’s tax collection office.

The jury, after a two-week long trial, found the 58-year-old Grainger County businessman guilty of felony theft, a charge that is punishable by eight to 12 years in prison.

Morgan, who can also receive probation, will be sentenced on Oct. 23.

“He may have done a little work, but the state submits that it was bad from the beginning,” prosecutor Bill Bright told the jury during closing arguments Friday.

Fellow prosecutor John Gill agreed.

After the verdict was read, he said that Bright “did an unbelievable job making a complicated case clear.”


Employee Theft

theft (2)Here are some news about theft that might make you wonder how far shoplifters go to steal from your store and your business. Follow the links below to read more about these stories.


Pizza employee charged with theft

ESCANABA – A 52-year-old Escanaba woman – accused of embezzling from a local pizza business – has been bound over from Delta County District Court to circuit court where she may make a plea or schedule a trial.


Former newspaper employee pleads guilty to felony theft

A former Tribune-Herald employee pleaded guilty Monday to charges related to accusations that she stole more than $100,000 from the newspaper’s former owners.

Sylvia Susan Ancira, 52, a 16-year newspaper employee, is a former circulation accounting clerk. She was fired in July 2011 after a company audit revealed she stole $104,153 from July 2009 to July 2011.

Ancira’s attorney, David Bass, said Ancira disputes the audit figure.

He said the actual restitution amount will be determined by a presentencing report.

In a plea bargain Monday, prosecutors allowed Ancira to plead guilty to third-degree felony theft instead of a second-degree felony.

The third-degree felony alleges Ancira stole more than $20,000 but less than $100,000.

Prosecutors recommended she be placed on probation.

Ancira sold her home to help make restitution to Robinson Media Co., which sold the Tribune-Herald to Berkshire-Hathaway in June 2012.


Police have beef with shoplifting suspect

PORTLAND, Ore. — Police have a beef with a man they say stole meat worth $2,700 from three Safeway stores in Portland, Oregon.

Police say 53-year-old Barry T. Sanders was caught on video hiding meat in a shopping cart at least 13 times in July and August, then leaving the grocery stores without paying.

KOIN reports (http://bit.ly/1vhdtBU) Sanders was arraigned Tuesday on theft charges in Multnomah County Circuit Court. He didn’t enter a plea and will be assigned a lawyer on Wednesday.
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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


 

Shoplifting Flash Mobs and Other News

theft (5)How do you protect yourself from a mob of shoplifters? Is there a solution? Calling the police will eventually get things going, but rarely do they arrive in time to stop the shoplifting. Even an individual shoplifter can get away many times before he gets caught, and the loses your store or business suffers is big. Prevention and investing in shoplifting devices can be a helpful method for your store to prevent shrinkage and a deterrent to employees and other shoplifters from stealing from your store.


The Future Of Shopping In Three Trends

Back in 2012, I wrote a piece titled, Five Trends Driving Traditional Retail Towards Extinction. Looking back, I’m generally happy to see that the trends I examined are still valid, though “extinction” might be a little strong.

But the retail and e-commerce industries still interest me and living in New York provides a firsthand view into the petri dish that many of these companies use to experiment. So almost two years later, I’ve revisited the space to focus on three more trends that are changing the way we shop. (I’m leaving out an exploration of mobile for the moment, since it’s probably worth its own post.)

The Macro View

First, a brief look at the bigger picture.

Last month marked Amazon’s 20th anniversary, which is kind of amazing to think about since e-commerce seems both very new and indispensable at the same time. Either way, the world has had plenty of time to digest the trend.


Local Fox Anchor Arrested for Shoplifting; Fiancé Arrested for Arson

CBS 13 in Sacramento reports that a local news anchor was arrested for theft while in an unrelated case her fiancé was arrested for arson. Fox 40 news anchor Sabrina Rodriguez was arrested and charged with three felony counts of shoplifting while her fiancé, Nicholas Gray, is in jail on drug and arson charges.

On May 6, 2014, Rodriguez and Gray’s Sacramento home was ablaze; in the ensuing attempts by firefighters, one fire fighter was injured. The couple told authorities at the time that the cause of the fire was a stove exploding.

According to file footage from CBS 13, fire battalion Chris Ortiz said at the time: “The occupants were extremely lucky to get out. If they would have hesitated probably a minute or so they might be crawling out the back windows or we might be extricating them from the home.”

Gray was booked Thursday into the Sacramento County jail on charges of arson, battery, manufacturing meth, and possession of marijuana or hashish for sale. Investigators would not confirm the charges were related to the fire at his home, CBS 13 reports.


Police: Shoplifting flash mobs storm convenience stores

FEDERAL WAY, Wash. —

Police in Washington state are looking for a group of about 40 teens who allegedly stormed a Shell service station in Federal Way early last Sunday, KIRO-TV in Seattle reported.

“It’s pretty bad. … When 30, 40 people come into the store, I don’t think even cops can do anything right away,” said Ranji Rai, who owns the store. He said his clerk was alone at the time and couldn’t do anything to stop the crowd.

The clerk, Sukhvinder Singh, said that at first, he tried to stop the teens at the door, but they pushed through. Then Singh tried to grab one of the teens’ jackets, but another person threw a soda at him and just missed, Singh said.

>> VIDEO: Shoplifting flash mobs storm convenience stores, police say

According to Federal Way police, another group targeted a 7-Eleven about a mile away, only an hour and a half after the incident at the Shell station. KIRO-TV included portions of the surveillance videos in their newscast.