Retailer IDs extensive gift card fraud, stops it cold

How a retailer's face match interrupted nationwide scam in just hours

Step one in any crisis: Stop the bleeding. Retailers lost $94.5 billion to thieves in 2021. Now they're stemming that figurative tide and preventing new wounds with FaceFirst's powerful investigative tools.

Here's how one retailer identified an extensive gift card scam and stopped it cold in less than three hours. A store manager notified the retailer's AP team that a masked man removed 50 Apple gift cards from the store without activating them. (This is the first step in a known, complex gift card fraud scheme.) The AP team ran a FaceFirst search. Even with the mask covering half of the man's face, the search quickly revealed that he repeated the gift card thefts in 21 stores.

As a result of the first search, the AP team noted the man's frequent accomplice. They ran a FaceFirst search on the accomplice and quickly found the second man had placed altered gift cards back on display in 61 of their stores. (This is the second step in the gift card fraud scheme.)

In less than three hours, the retailer identified the gift card theft pattern—at least 84 incidents with 2,000+ stolen and altered gift cards in the prior 14 days. The retailer temporarily removed all Apple gift cards from the stores and began working with the kiosk vendor to address the problem nationwide.

The retailer enrolled the two men in its custom FaceFirst database. FaceFirst alerted the retailer instantly when the men entered the stores again. The men returned three more times, determined that the Apple gift cards had been removed, and have not been back since.

FaceFirst gives retailers incredible investigative power that helps stop the bleeding and deters criminals so they're no longer harming the retailers' operations. FaceFirst's AI can search thousands of hours of CCTV security footage in seconds, turning a nearly impossible manual task for humans into instant, actionable intelligence. FaceFirst's fast, accurate search tool helps AP investigators build strong, detailed cases for coordination with law enforcement agencies and prosecutors.

FaceFirst's face-matching technology alerts retailers instantly when known threats enter their stores, providing both life safety and loss prevention advantages. Calculate the risks of being caught unaware when a known offender enters your store. If you knew there was a proven solution to keep your valued customers and associates safer from violent offenders and prevent loss, would you implement it? The real risk is answering no. FaceFirst's solution is fast, accurate, and scalable—learn more today at facefirst.com.
 

The day after Target & Home Depot Cite ORC as an 'Acute & Serious Problem'
CNBC Films Segment With NRF President Matt Shay to Discuss it.

Watch video below.

'It's not people shoplifting': Why retail is focused on organized crime
The more recent Home Depot and Target earnings for the just-finished quarter, both big-box companies cited a rising trend of retail theft and the industry is supporting the Combatting Organized Retail Crime Act to give the Department of Homeland Security more power to help.

It's been hard to get an exact read on the rise in retail theft. Best Buy sounded alarm bells back in November 2021 when it said thieves were traumatizing employees. Walgreens was vocal on the issue too, but then its chief financial officer James Kehohe did an about-face, telling analysts in January that the company may have overstated the issue and its impact on sales. "Maybe we cried too much last year," he said on the January earnings calls.

But this quarter's batch of retail earnings have brought the theft issue to the forefront again. Both Home Depot and Target cited rising retail theft.

"The country has a retail theft problem," Home Depot CFO Richard McPhail said on a call with CNBC on Tuesday after its earnings. "We're confident in our ability to mitigate and blunt that pressure, but that pressure certainly exists out there."

Home Depot's vice president of asset protection had told CNBC in March crime is increasing at double-digit rates.

Target said organized retail crime will reach $500 million more in stolen and lost merchandise this year compared with a year ago. On its earnings call, Target CEO Brian Cornell said retail theft is "a worsening trend that emerged last year."

If the threat is moving in severity from one retailer to another, the industry remains convinced it has the numbers to say the crime trend is rising, and that this is not a shoplifting issue reflecting tougher economic times for Americans but increasingly the work of organized retail crime networks.

NRF's president Matt Shay told CNBC on Thursday that the issue isn't going away. "Conversations we've had with members over the last several years indicate it is getting to be a really acute and serious problem," and as far as the annual numbers, remains "growing."

While theft is "manifesting itself in stores with acts of violence," Shay stressed that in-store, individual crime is not the biggest scope of the problem. "It's not people shoplifting an individual item for personal use," he said.

But shoplifting is a big part of organized crime. Target chief financial officer Michael Fiddelke had said after its earnings in November 2022 that shoplifting jumped about 50% year over and year, resulting in over $400 million in losses in the fiscal year, and Walmart's CEO Doug McMillon issued another warning about the rising threat on CNBC in December.

"This is very sophisticated local, state, national and transnational organizations, organized not just to steal at the store level, but throughout the entire supply chain ... on the docks, on trucks, off ships, through containers, on the railways. This is a really persistent problem and it's across the supply chain," Shay told CNBC on Thursday.  cnbc.com


ORC is Impacting "All of Retail" & "Puts Our Teams & Our Guests in Harm's Way"
Target, Walmart, TJX Companies and Home Depot Say Organized Retail Crime Is Cutting Into Profit
Retail shrink is taking a bite out of company profits this quarter.

In their most recent earnings calls, CEOs from Target, Walmart and TJX Companies discussed how retail theft has hit their businesses in the last quarter and how the industry needs to come together to combat the growing problem.

"It's an urgent issue, not just for Target, but across the entire retail industry," said Target CEO Brian Cornell in a call with investors on Wednesday. "It is a problem that impacts availability of product, the shopping conditions are less convenient and, unfortunately, what I'm most concerned with is it puts our team and our guests in harm's way."

TJX Companies, which owns T.J. Maxx, Marshalls and HomeGoods, also highlighted headwinds from retail shrink in its first-quarter earnings call on Wednesday and projected impacts to profit in a similar range to the prior year.

"We are laser-focused on our shrink initiatives, which are the increase of tagging, tethering, the use of hard cases and increased loss prevention presence," said TJX EVP and CFO John Klinger in a call with analysts. "We're continuing to look for newer ways to protect our merchandise. And then, of course, we are also very focused on the employee and customer safety in our stores, along with the customer satisfaction."

Like Target, Walmart noted that the solution to combating the issue needs to be a collaborative process across retail.

"It's been challenging really for all of retail," said Walmart's U.S. CEO and president, John Furner, in a Thursday call with analysts discussing the company's first-quarter earnings results. "We know a lot of communities have been affected by this, but it's also important to note that retail can't solve this issue all on its own. It will take communities stepping up and enforcing the law to be able to bring this issue back under control." footwearnews.com

Home Depot Q1 webcast: In the first quarter, our gross margin was 33.7 percent, a decrease of 8 basis points from the first quarter last year, primarily driven by increased pressure from shrink.


Grocery Stores Becoming 'Crime & Chaos' Magnets
Grocery stores quickly becoming places of crime and chaos in Western Washington
Cellphone video given to KIRO 7 shows the moments of tension inside a Safeway in Seattle, after a group of suspects began pushing produce on the floor and spraying a fire extinguisher inside the store.

"When criminals are emboldened to steal a lot of times that elevates," says Tammy Hetrick, the CEO of the Washington Food Industry Association, representing independent grocery and convenience stores. "It starts with a theft, but increases into other things."

In just the last few weeks, KIRO 7 has reported incidents of violent crime outside grocery stores. In Edmonds, a man was stabbed outside a WinCo. Fred Meyers in Renton and Federal Way both saw shootings in their parking lots.

Steven is an employee at Fred Meyer's in Federal Way. He witnessed the shooting, which happened over his lunch break, as he sat in his car.

"I heard several gunshots. Turned around. Saw someone sprinting toward the store, put two and two together in my head. Put it into gear and bolted," says Steven.

KIRO 7 also spoke with an employee at a Seattle Safeway, who wished to exclude his name. "Every time you come to work, you're always thinking that someone may come in or go crazy, bring a gun, or something like that," he says.

Theft continues to be a persistent challenge.

"What we're seeing is those same people coming back again, and again, and again, knowing that we are limited the resources and what we can do to stop them," says Hetrick.

She says police don't have the capacity to intervene and store employees are limited in how they can act. Hetrick explains that communities often pay the price for persistent crime, with rising food costs and the threat of food deserts.

"A lot of store owners are really weighing whether it makes sense to stay in business or not," says Hetrick.

She says already some stores are diverting resources toward security and away from things like food bank donations. kiro7.com


'Tough-On-Crime' Moderate Democrat Wins Philly's Mayor's Primary Race
'Crime was the most important issue'

Progressive mayors have won elections in Boston, Los Angeles, and Chicago. Here's why Philadelphia's race was different.
National progressives were looking for another big win in Philadelphia this week, but Cherelle Parker, a moderate Democrat born and raised in the city's Northwest section, won the historic nomination.

"We're taking this movement from the West Coast to the East Coast!" U.S. Rep. Alexandria Ocasio-Cortez told an amped-up Gym crowd at a rally on Sunday. Ultimately, with 94% of votes counted, Gym came in third place in the Democratic mayoral primary trailing Parker and frustrating progressives who hoped to propel gains in recent years into the city's biggest office.

Philadelphia's race was more complicated than Chicago's, with several candidates here factoring into the outcome, and Rhynhart and Gym splitting votes. Of the five contenders, Parker was also the only Black candidate in a city which has historically voted along racial lines. And while the race was light on specific policy proposals, Parker ran with a tough-on-crime stance that supporters seemed to latch onto.

In the mayor's race, none of the candidates downplayed the severity of crime, a key issue for voters. Parker projected a particularly tough stance that hinged on hiring more police officers and supporting the controversial tactic known as stop-and-frisk. But she combined that posture with a promise to have "no tolerance for misuse or abuse by police" and her personal story of being a mother to a 10-year-old Black boy, which struck a balance for some voters.

"Crime is clearly the No. 1 issue on the minds of voters," said political strategist J.J. Balaban. inquirer.com


The Ripple Effect of California's ORC Surge
California theft rings impacting businesses in Northern Nevada
Criminal theft rings are hurting local and corporate businesses, and the Reno Police Department (RPD) fears it will push retail stores out. A video of an attempted retail theft at a Reno Walmart when viral on TikTok and Twitter with nearly three million views.

The video prompted many questions on social media, and after speaking with RPD, there is an even bigger problem: "We have seen an uptick in retail theft. We are seeing California theft rings coming to Nevada and stealing merchandise."

However, prosecutions rarely take place as most franchise policies prevent employees from pursuing thieves due to liability issues. In the rare case that a case is pursued, one can face a few charges.

If the items stolen are less than $1,200, it is a petit larceny misdemeanor, but if you go above that it is a felony. However, using force to get away with merchandise is labeled as robbery.

Five dollars here and there doesn't seem like much, but after a while, it adds up. It is also hurting the community because pushes these stores out, which why this issue needs to be taken seriously.

Local law enforcement agencies are cracking down on theft rings who often use Facebook Marketplace to sell the stolen items. mynews4.com


UK Stores Battling Same Theft Surge as U.S.
New Aldi checkout rules implemented in some stores in response to shoplifting

One customer warned others on social media about the change after she saw the new sign at their local supermarket

Customers have noticed a new policy being implemented across in some supermarkets across the UK. The new rule is being put in place at some Aldi stores and requires trolleys to be clear and for carrier bags to be empty when customers are going through the checkout.

It is thought that this new rule is a temporary measure being rolled out in some stores to tackle problems with shoplifting. One person commented: "We've had this for a while in Milton Keynes due to people stealing." A second person wrote: "They have so many thefts now it's a disgrace.

"If they don't trust me, will be time to shop elsewhere." Someone else wrote: "I always leave my bulky duplicates in my trolley, and I'll continue to do so." nottinghampost.com


Texas Mall Shooting - Conflicting Eyewitness Accounts
Police and witness give contradictory accounts of response to Texas mall shooting
Authorities have publicly denied the eyewitness account of a man who earlier had said he recalled the Allen, Texas, mall shooting scene immediately following the massacre in great detail, claiming he administered aid to victims before police officers arrived.

A gunman opened fire at the outlet mall outside Dallas, killing eight people and wounding seven others on May 6.

Steven Spainhouer, a former U.S. Army officer, said he drove to Allen Premium Outlets after his son, sheltering in place inside the H&M store where he worked, called to tell him that he had heard gunfire on the property.

Spainhouer spoke to a number of media outlets, including CBS News Texas, about the aftermath of the shooting. He claimed in those interviews that he arrived in the parking lot of the outlet mall before first responders, and said he administered aid and performed CPR on people who had been shot. Spainhouer recounted the "carnage" he said that he saw, including a young girl who "had no face" and a young boy covered "head to toe" in blood, who, according to Spainhouer, was hiding beneath the body of his deceased mother.

The Allen Police Department on Friday issued a statement contradicting Spainhouer's account, saying detectives had "determined that Mr. Spainhouer is not a credible incident witness." cbsnews.com


Drugs & Crime Continue to Plague NYC
Flesh-rotting 'zombie drug' on the rise in NYC, local officials warn
New York City officials have issued a dire warning about the rise of a "zombie drug" that can have appalling effects on users — including eating away at their flesh — as cities across the nation grapple with the horrifying narcotic's spread.

The animal tranquilizer xylazine — also known as "tranq" — can create a catastrophic reaction when mixed with other drugs like heroin, cocaine or and most commonly in the Big Apple, fentanyl.

Law enforcement in New York, as well as other major cities like Los Angeles, have reported an increase in the presence of the xylazine, which is often used to cut other drugs and increase the supply because it is incredibly cheap. The often-deadly combination can sometimes cause users' skin and muscle to begin rotting away, according to authorities. nypost.com


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Dollar Stores Getting Backlash Over Mounting Workplace Safety Violations
Dollar Tree, Dollar General get pressure to address safety, worker well-being

In the meantime, OSHA continues to levy fines, and has listed Dollar General as a "severe violator" when it comes to safety

Both Dollar Tree and Dollar General are under fire for safety violations and low employee compensation.

The Occupational Safety and Health Administration (OSHA) has been busy administering fines to the discount stores. Dollar General has racked up more than $16 million in penalties, and safety hazards have become so common that OSHA now lists Dollar General as a "severe violator," a label the agency uses sparingly.

Two activist firms now want shareholders to do something about these accusations. Domini Impact Investment, a women-led SEC registered investment adviser, has come up with Dollar General Proposal 7, which will be voted on by company shareholders in a couple of weeks. The measure calls for an independent audit being conducted for worker safety and well-being. Then there is Dollar Tree Proposal 7, which has been spearheaded by New York-oriented investment firm United Church Funds and which would create a wages and inequality report. Dollar Tree officials will weigh in on June 13.

Dollar stores are commonly cited for blocking fire exits and electrical outlets and for having a high concentration of clutter. It's all fodder for those trying to keep dollar stores from expanding. The Institute for Local Self-Reliance (ILSR) released a study earlier in the year titled the "Dollar Store Invasion" in an attempt to slow the growth of the discount retailers. Safety was a highlighted section in the report.

Most dollar stores have only one or two workers in the store at one time, making the task of clearing clutter a difficult one. Dollar General and Dollar Tree employ over 377,000, and both have been categorized as the fastest growing retailers in the U.S. Stores like Costco and Target pay workers a minimum of $15 an hour, and Walmart is not far behind at $14 an hour.  supermarketnews.com


The Growing Worldwide Trend of Facial Biometrics & Security
Lufthansa Group Rolls Out Face Recognition Biometrics For Priority Security

Biometrics are coming to Berlin Brandenburg Airport with the introduction of the BER Traveller.

Biometrics are coming to Berlin Brandenburg Airport with the introduction of the BER Traveller. Effective immediately, facial recognition will replace boarding passes for Lufthansa Group HON Circle Members and Senators.

New facial recognition system at BER

To utilize facial recognition, travelers must register their biometric data in an app called FastID. Travelers that meet the criteria to sign up for facial recognition will receive an email invitation to sign up from the airline.

With that said, the new biometric service is voluntary. The personal and biometric data is stored in the FastID app, and before each flight, travelers are given the option to use the biometric service for their next flight. Travelers have complete control of the data in the FastID app and can delete the information at any point.

The biometric service will take photos through cameras installed at process points and match the images taken with the passengers' biometrical data from FastID.

Over the past few years, many airports and airlines have begun using biometrics to process passengers. simpleflying.com


Home Depot Worker Safety Boosted After Higher Wages
Home Depot says its $1 billion boost to wages has already improved customer satisfaction and worker safety

The move has led to better staffing, which has improved customer satisfaction and worker safety, the company told investors.

Home Depot says its decision earlier this year to invest $1 billion in higher wages for its workers is already yielding measurable results.

"We're seeing improvements in key customer service metrics as well as benefits to our operations in the form of consistent staffing and less safety incidents across all regions," Home Depot's executive vice president for US stores, AnnMarie Campbell, told investors on Tuesday. "These improvements are exactly what we set out to achieve with this wage investment."

The additional spending, announced in February, allowed Home Depot to boost its starting pay to at least $15 an hour for frontline hourly associates nationwide, and also included improvements to benefits, training, and career development.

Campbell said the wage boost has enabled Home Depot to hire top-tier workers across the US — and keep them for longer, even as labor turnover remains high in the retail industry. businessinsider.com


Diversity Concerns Fueling Retail Union Efforts
Apple retail still has a diversity problem, union says

Retail stores are hiring more people of color, but they're not getting promotions

The higher you climb up the corporate ladder at Apple, the whiter it gets. That's according to data analyzed by the Communications Workers of America (CWA), the union that's helping retail workers at Apple stores organize.

As some Apple retail workers fight for union recognition and a seat at the bargaining table, the CWA is using Apple's own data to show how the company falls short in its diversity, equity and inclusion (DEI) efforts.

Despite Apple's efforts to cultivate a more racially diverse workforce, management positions still skew white, the data shows. Even though Apple succeeded at hiring more people of color, the data indicates the company disproportionately promoted its white workers. techcrunch.com


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Quarterly Results

Home Depot Q1 comps down 4.5%, U.S. comp's down 4.6%, net sales down 4.2%

Companies With Cyber Insurance Are Frequent Targets
Insured companies more likely to be frequent ransomware victims

One of the reasons for this may be that as insurers require more from companies those able to pay for insurance are also likely to be able to afford bigger ransoms.

Companies with cyber insurance are more likely to get hit by ransomware, more likely to be attacked multiple times, and more likely to pay ransoms, according to a recent survey of IT decision makers.

Back in 2019, fewer than 20% of enterprises suffered repeat ransomware attacks, while during the pandemic, the percentage rose to around 30%. And it didn't stop with the pandemic, with 38% of organizations surveyed in 2022 reporting two or more successful ransomware attacks, those that attackers were able to lock systems, encrypt data, or exfiltrate information to demand a ransom, according to Barracuda's report conducted by Vanson Bourne.

Companies with cyber insurance get targeted more

Cyber insurance plays a significant role in the numbers as they get targeted more, Barracuda Networks CTO Fleming Shi tells CSO. The survey found that 77% of organizations with cyber insurance were hit at least once, compared to 65% of organizations without insurance. In addition, of the companies that had cyber insurance, 39% paid the ransom.

To make matters worse, the research found that insured companies were also 70% more likely to be hit multiple times. Repeat victims were also more likely to pay ransom, and less likely to use backup systems to help them recover.

Although the report doesn't establish a direct connection between having cyber insurance and being hit by ransomware, Shi speculates that attackers might discover that a company has insurance because of social engineering, or they might be going after targets that are most likely to have critical data. "That allows them to have higher confidence in getting the payment," he says.

That doesn't mean that having cyber insurance is a bad thing. Insurance companies insist on cybersecurity controls before they provide coverage, says Shi. "Insurance can play a positive role if you utilize it in a way that helps you improve your security posture."  csoonline.com


Companies Regulating Employee Use of ChatGPT
Apple Restricts Employee Use of ChatGPT, Joining Other Companies Wary of Leaks

The iPhone maker is concerned workers could release confidential data as it develops its own similar technology

Apple has restricted the use of ChatGPT and other external artificial intelligence tools for some employees as it develops its own similar technology, according to a document reviewed by The Wall Street Journal and people familiar with the matter.

Apple is concerned workers who use these types of programs could release confidential data, according to the document. Apple also told its employees not to use Microsoft-owned GitHub's Copilot, which automates the writing of software code, the document said.

ChatGPT, created by Microsoft-backed OpenAI, is a chatbot derived from a so-called large language model that is able to answer questions, write essays and perform other tasks in humanlike ways.

When people use these models, data is sent back to the developer to enable continued improvements, presenting the potential for an organization to unintentionally share proprietary or confidential information. OpenAI disclosed in March that it took ChatGPT temporarily offline because a bug allowed some users to see the titles from a user's chat history.

JPMorgan Chase and Verizon have barred use. Amazon.com has urged its engineers who want to use ChatGPT for coding assistance to use its own internal AI tool, a spokeswoman recently told the Journal. Apple is also working on its own large language models, people familiar with the matter said. wsj.com


New Hacktivist Group Has Attacked Nearly 200 Organizations in 2 Months
A different kind of ransomware demand: Donate to charity to get your data back

The group has claims nearly 180 targets despite being relatively new and casts its attacks as a form of activism.

A new and increasingly active ransomware group that's attacked nearly 200 organizations in less than two months has a different spin on its extortion efforts: Don't pay us, pay a charity.

So far, this unnamed group that is at least publicly claiming to be driven by anti-capitalist sentiment and its own brand of cyber benevolence is largely targeting users Zimbra, an online workplace collaboration tool.

"Unlike traditional ransomware groups, we're not asking you to send us money," read the text of one ransom note posted April 2 on an online forum for Zimbra users. "We just dislike corporations and economic inequality. We simply ask that you make a donation to a non-profit that we approve of. It's a win-win, you can probably get a tax deduction and good PR from your donation if you want."

The group is using ransomware dubbed MalasLocker by Bleeping Computer, the tech news site that also hosts forums where users began reporting in April that Zimbra had suffered a series of compromises. Separately, users of a dedicated Zimbra forum began complaining about ransomware issues beginning in late March, Bleeping Computer reported. cyberscoop.com


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Loudoun County, VA: Traveling Jewelry Event: $3 million in checks, Jewelry stolen from Ashburn hotel
While a jewelry saleswoman showered, someone stole $3 million in checks and jewelry from her Embassy Suites hotel room in Ashburn on April 30, according to the Loudoun County Sheriff's Office. The woman said she'd held a jewelry sales event at the hotel, before the burglary, according to a search warrant affidavit filed by Detective Sean P. McCormack in Loudoun Circuit Court on May 16. McCormack wrote that hotel video showed the woman taking an elevator upstairs with security guards who then descended to the lobby. McCormack said the video showed a man ascending in the elevator up shortly after the guards descended. The man then descended from the sixth floor where the woman was staying and opened up a door to the hotel for another man. McCormack said the thief or thieves entered the room by breaking the door lock. The cases with the checks and jewelry had GPS devices. One case was recovered in the woods on May 1. The warrant seeks phone data to track phones in and around the hotel at the time of the heist.  loudountimes.com


Auburn, WA: $100K smash and grab at jewelry store
Auburn police were dispatched on May 13 after receiving a report of a robbery at approximately 7:03 p.m. in the 1100 Block of Outlet Collection Way Southwest. According to the department, a smash and grab occurred at a jewelry store in the mall. As of May 16, the department is still in the early stages of investigating the incident and does not have many details to provide, according to Kolby Crossley, public information officer for the department. According to the public information log, $100,000 worth of jewelry was stolen in the incident.  auburn-reporter.com


San Antonio, TX: Four masked men take multiple handguns, jewelry in 'smash & grab' robbery
Four men are on the run after they took multiple handguns and jewelry during a "smash & grab" robbery at a Northwest Side pawn shop. The robbery took place just before 10 a.m. Thursday to Cash America Pawn off Bandera Road near Hillcrest Drive. Police said that the four men wearing ski mask walked into the store and said "this is a robbery" to the employees. At least one of the suspects was armed with a handgun and pointed at the employees. The suspects then immediately smashed display cases and took several handguns and jewelry before driving off in what police were told was a tan truck.  news4sanantonio.com


Update: Cartersville, GA: Man pleads guilty to baby formula theft; sentenced to 10 years probation
"A man involved in a baby formula theft ring pled guilty to several charges in Bartow Superior Court on May 15. Defendant Mateo Sanchez-Romero, 20, was arrested in early March.  daily-tribune.com


Southaven, MS: Five people burglarized Mississippi gun store. Reward now being offered for info leading to their arrest

Chicago, IL: Skate shop burglarized; over $10,000 of merchandise stolen

Beaumont, TX: Police searching for 4 suspects following theft of nearly $3K from Ulta

Memphis, TN: Customers steal $3K worth of wigs from beauty supply store