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December 6, 2011 SUBSCRIBE

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UK retailers will lose $1.56 billion to crime over Christmas. Professor Joshua Bamfield, director of the Centre for Retail research and author of the study, The Global Theft Barometer, said: "It shouldn’t come as a surprise to the industry that shoplifting, employee theft and supply chain fraud are likely to increase during the festive period – after all, retailers are less rigorous in their controls at this time of the year. However, the implications should not be underestimated." "Christmas crime has increased by 6.2% since the 2010 research, which is symptomatic of the tough times we are facing as a nation. The double pressures of a weak economy combined with the most expensive time of the year will inevitably lead to an increase in loss, so unfortunately it is likely that it will worsen further before it gets any better." Of the $1.56 billion set to go missing during the holiday season, $1.02 billion is expected to be down to shoplifters with a further $472m stolen by staff and $67m lost through supply chain fraud. Neil Matthews, vice president at Northern, Central & Eastern Europe at shrinkage management and merchandise visibility specialists Checkpoint Systems, said: "We are naturally advising retailers to be on their guard during the holiday season. With more customers passing through the doors and additional staff drafted in to cover the busy period, it is essential that store operators are vigilant and aware of the potential risks before they arise." (Source

Eastland Mall JC Penney loss prevention officer in Evansville, IN, threatened with gun when he went to grab the stolen merchandise. The store employee was outside smoking a cigarette at about 12:20 pm when he saw a male leave the store with a mesh bag full of items with security tags, according to a police report. The employee identified himself and followed the suspect to the get-away vehicle, a gray Mercury Sable with a temporary tag in the window, the report said. There, the employee grabbed the bag as the suspect got into the vehicle, but let go when a second man, the driver, displayed a handgun and said, "What! What!" before driving off, the report said. (Source

The raging mobile phone wire tapping controversy that was made public last month because of Carrier IQ software brings lawsuits. The lawsuit was filed last Friday in U.S. District Court for the District of Delaware and accuses Carrier IQ, three wireless carriers, and four handset makers of violating the Federal Wiretap Act, the Stored Electronic Communications Act, and the Federal Computer Fraud and Abuse Act. The complaint (download pdf) was filed on behalf of four individuals, who are described in court papers as owners of mobile handsets with Carrier IQ software on them. Those named in the lawsuit besides Apple and Carrier IQ, are AT&T, Sprint, T-Mobile , HTC, Samsung and Motorola. All of these companies have admitted that their handsets include Carrier IQ software. The carriers have insisted that the software is being used only for network diagnostics purposes while the handset makers have claimed that they integrated Carrier IQ in their devices only because the carriers specifically asked them to. This is atleast the third publicly known lawsuit seeking class-action status that has been filed over the Carrier IQ issue since a major controversy over its software erupted late last month. The company has been in the middle of a raging controversy after a security researcher last month said the software could be used to conduct surreptitious and highly intrusive tracking of Android , BlackBerry and other smartphone users. (Source

Shoppers waiting for Black Friday — Round 2 Shoppers who were out in full force on Black Friday may not walk retail aisles again until just before Christmas — when retailers are expected to heavily discount merchandise — according to the latest America's Research Group/UBS "Christmas Forecast." (Source

Google Dives Into Brick-and-Mortar With First Android Retail Store Google and Australian mobile telecommunications company Telstra opened the first ever brick-and-mortar Android-themed storefront in Melbourne on Thursday, a move to consolidate the Android brand and associated devices under one big, wide, Googly roof. (Source

Bed Bath & Beyond: The Best Retailer in America? Ask a financial analyst and you’re likely to get a pretty positive response. Through the best and worst of retailing cycles, Bed Bath & Beyond, with total 2010 sales of almost $8.8 billion and earnings of $790 million, has generally outperformed virtually every other retailer in virtually every other merchandise classification. But ask that same analyst what he sees going forward and, chances are, he will shake his head in ignorance. Bed Bath is notoriously close-mouthed when it comes to handing out information on its operations. For the past two decades, its annual meetings – held in a suburban New Jersey hotel that is conveniently located inconvenient to Wall Street types – have averaged 14 minutes in length - including coffee. But ask the companies that supply Bed Bath & Beyond with its bed, bath and beyond products and you may get a decidedly different story. The company has a reputation for being positively ruthless in its dealings with suppliers, negotiating hard and long upfront and not being bashful about collecting a few extra points on the backside of any program. There are countless anecdotal stories from vendors about chargebacks that would embarrass a department store. Yet most home furnishings suppliers will begrudgingly tell you they need Bed Bath, and would still rather sell them than not. What a story. Great retailer and tough in negotiations. The LP department has outperformed as well under the leadership of Jim O'Connor who is really their first senior LP executive that's been successful there. Over the years the LP team has had to conform to this operations led culture that requires the LP executives to truly get involved in the business and be part of the team. (Source

Dollar General plans to open 40 new Dollar General Markets in 2012 based on the strong performance at the 25 Dollar General Markets it opened this year — the first new DG Markets since 2007. "We believe we can serve our customers even better with our fresh meat, produce and expanded cooler assortment," Rick Dreiling, chairman, president and CEO. (Source

Is PCI Effectively Preventing Fraud? The exposure of debit and credit card details at a California-based grocery chain has raised questions about the efficacy of - and retailers' compliance with - the Payment Card Industry Data Security Standard. Modesto-based Save Mart Supermarkets issued a consumer advisory about card-reader breaches at 20 of its stores. The source of compromise: self-service checkout lanes - easy targets for fraudsters. Lachlan Gunn, who heads up the European ATM Security Team, says POS skimming in retail is a growing concern in Europe as well. "Skimming at unattended self-service terminals has been fairly widely reported at petrol stations, railway ticket machines and parking ticket machines," he says. Fraudsters typically compromise card readers and PIN pads via two methods. One method uses a physical overlay that skims card details while a nearby camera captures PINs as they're entered on the PIN pad. The other method requires the attacker to replace the PIN pad with one that's been manipulated to record details or compromise the PIN pad by opening it and adding chips that record or wirelessly transmit details as their entered. McAfee consultant Robert Siciliano says most retailers fail to focus on real-world security threats, like skimming. "Merchants are spending their energy just barely being [PCI] compliant, but far too many aren't even that," he says. (Source

Study shows four minute limit for online security checks before retail abandonment A new study has shown that customers are prepared to spend four minutes on average undergoing identity verification and other security checks before they abandon an online retail transaction. (Source





Doug Marker
Vice President
LP, Risk and Audit
Michael Stores, Inc.

Stephen O'Keefe
Loss Prevention and
Risk Management
Wal-Mart Canada

Coming in December

Kelly Gorman
Vice President LP

LP Program Spotlight
eBay's PROACT Team



Richard C. Hollinger, PhD



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National Retail Federation
2011 ORC Survey

Executive Summary
Full Report 

National Retail Federation
Effective Crowd Management Guidelines

Education Awareness on Personal Safety
Full Report

Return Fraud Survey
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Dallas Police Chief announces new "organized retail theft" program. Dallas Police Chief David Brown says the holiday shopping season is the perfect time to launch an aggressive enforcement of shoplifting, which he calls a criminal enterprise that includes the thief, the fence, or seller, and the buyer. Brown: Many neighborhoods will see products being sold out of the trunks of cars on the corner, or vendors set up in empty lots selling tennis shoes and technological gadgets. That is the very industry, that black market that contributes to this organized criminal enterprise. City officials say retail theft cost the city 20 million dollars in lost sales tax revenue last year. Chief Brown says this new campaign will use the latest technology, old fashioned undercover police work, and aggressive prosecution by the District Attorney to get at the whole "criminal" chain - the shoplifter, the seller, AND the buyer. At a City Hall announcement, the Chief had a warning for bargain-hunting shoppers. Brown: First of all, if it's too good to be true, it's stolen. That's the bottom line. I will caution anyone for buying property from anyone you don't know outside of traditional means. Jamie Bourne, with Target, applauds the new police initiative. Bourne: It's not just about people coming in and taking one or two CD's in our stores. We're talking about people who make a living stealing from retail establishments and re-selling those products on the streets. Bourne says in North Texas, Sherman, Plano and Flower Mound have similar, strong organized retail theft programs in place. Dallas Police say they have high expectations they will take down some major shoplifting rings. (Source


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Alpha Introduces Jewel Lok: First Retail Security Solution That Attaches Directly to Jewelry – not Packaging – to Dramatically Reduce Shrink

Stud, Hoop and Loose Jewelry Solutions - Ideal for Apparel and Accessory Retailers

CHARLOTTE, N.C.--(BUSINESS WIRE)--Alpha, a division of Checkpoint Systems, Inc. (NYSE: CKP), today announced the introduction of Jewel Lok, the first effective retail security solution to dramatically reduce jewelry shrink by attaching directly to the merchandise, not the packaging.

According to industry researchers, moderately priced jewelry ($20 to $200) ranks consistently in the top five shrink category for retailers, with losses between 15% and 50% not uncommon. However, jewelry is a critical component of many retailers’ merchandising strategies, where aesthetic display of their center core is paramount, even more than theft prevention. Until now, retailers’ only mechanism for combating the theft of openly displayed jewelry was applying an EAS tag to the back of a jewelry card, but thieves often found ways to separate the jewelry from its card.

Alpha’s Jewel Lok introduces a far more effective way to protect the merchandise. It includes solutions for attaching directly to stud, hoop and loose jewelry. Jewel Lok can be applied in-store or, by using Checkpoint’s @ Source program, it can be applied and subsequently recycled at point of manufacture. This high-theft solution does not affect aesthetic display and is virtually invisible to shoppers. It also provides a notable benefit-denial, whereby shoplifters attempting to remove Jewel Lok will surely damage the merchandise rendering it useless for resale. At point-of-sale, however, Jewel Lok is easily removed with Alpha S3 HandKey or XT Detacher products.

"Based on customer feedback, we are confident Jewel Lok is a highly desirable jewelry protection solution," said Larry Yeager, Alpha’s vice president and general manager. "Because of this, we will expand on the family of Jewel Lok solutions for other types of merchandise, like rings and watches, in the near future. If Jewel Lok can deliver back even half of the retailer’s current jewelry shrink numbers, imagine the impact it will have on their bottom line. With the right solution, not only will shrink be reduced but with the merchandise available on the shelf, and on open display, it will help retailers increase their potentially highest margin sales."

During the last year, Jewel Lok has been successfully tested at different department stores, and is now available for immediate delivery.


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Thought Challenge Month in Review Today we are posting two Thought Challenges, as they appeared, in a countdown to our Awards Committee's selection of the "Top 3". Read well and make sure you vote on the last day!

Are Retailers Causing ORC?

Submitted by David George, CFI, LPC
Vice President of Asset Protection for Harris Teeter Supermarkets

April 1, 2011

Organized Retail Theft will always exist as long as there is a demand for the merchandise being stolen. As our industry continues to invest valuable resources into catching boosters and fences, the problem continues to grow. Here is a challenging thought: What if we, as retailers, are causing the problem? If our respective companies are purchasing product from illegitimate brokers, we are essentially creating the demand that is fueling the ORC problem. The Gray market operates on the same economic principle of Supply & Demand that our legitimate markets do.

In other words, if all retailers refused to buy Mach III Razors from anyone other than the manufacturer, then it would render all stolen Mach III Razors useless. If no one is willing to buy them, then they no longer have value on the Gray market. The thefts would cease. The same is true for any other high theft item. Sure, we will always see stolen merchandise on display on auction sites and flea markets, but those aren't driving the majority of the ORC incidents that we are all experiencing.

According to "Thieves Market," a video produced by the Food Marketing Institute, inspecting Lot Numbers is the best way for Food & Drug retailers to determine if they are buying stolen product. For example, open a new case of high theft merchandise, such as the aforementioned Mach III Razor Blades, and see if the Lot Numbers match. If they do not, there is a likely chance the merchandise was previously stolen.

Each of us in the Loss Prevention profession has a responsibility to build an anti-ORC buying program by which our companies must abide. Only then can we win the battle against ORC. To do this, one must:

Step 1: Meet with their executives and explain how buying stolen product creates the demand for more stolen product.

Step 2: Get a Commitment That Your Company Will NOT Purchase Stolen Product. (This may entail revamping incentive structure for buyers.)

Step 3: Communicate Expectations to suppliers (i.e., send vendors letters, establish procedures for violations, etc.).

Step 4: Create a "Right to Audit" clause in all supplier contracts that allow unannounced visits to supply warehouses.

Step 5: Audit for Compliance. (Inspect Lot Numbers after you receive product).

Have You Got the Time? (Just a thought.)

Submitted by Bill Nichols
Regional Director, Loss Prevention at Bed Bath & Beyond

April 7, 2011

We've all heard the adage that "time is money," and for those of us in the business community, that is true. As managers, we all strive to do a better job of managing our time, and managing the time of our associates. We have all felt the frustration of having to deal with people wasting our time, or with having somebody else interfere with the management of our time. Managers with good time management skills will avoid the latter by being conscious of how they affect the time management of others. (As a young department manager, I once had a store manager who always asked what I was doing whenever he called or paged me. One moody day, I challenged him on why he always asked me that, and if he thought I was slacking. Surprised, he told me he did so out of respect for my time, and always wanted to determine if what he wanted me for was more important than what I was working on.) Managers who are indifferent to their associates' or peers' time management will tend to have morale and productivity issues related to the frustrations of wasted time.

From a business standpoint, mismanaged time and wasted time do cost money. However, what we as humans tend to forget is the personal side. Time is the one resource we have that we can not truly measure in terms of loss (no one truly knows when their time will come to an end), and it is the one truly non-renewable resource in nature. Time is inexorable; it stops for no one, slows for no one and speeds up for no one. Time is manageable in terms of its value, but not controllable. Time is an abstract omnipotent force of nature that brings all of the other mighty forces to their knees. Our personal management of time is not measured in the quantity of our lives, but in the quality of our lives. For many of us, our professional and personal lives inevitably merge and intertwine, and the challenge becomes the "work/life balance" of our time. Our careers fuel the comforts we provide our families, so one could say that time spent is valuable. However, the time we spend nurturing our family and personal relationships is priceless; and while quantity is certainly desirable, it is the quality of that time that really matters most. To waste that time is to squander the most valuable resource one has in life.


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The Pen Is Mightier Than The Phone: A Case For Writing Things Out Writing things down, with your actual hands, is just plain better at getting you to remember and execute good ideas. Here's why. (Smoother)

What are the Common Mistakes of New Managers? Good management has been thoroughly studied and is widely understood, but it is still more honored in its breach than in its practice. Most new managers, in particular, get it wrong. Harvard Business School Professor Linda Hill studies those who become managers for the first time, and writes perceptively about some of the common myths and misperceptions that lead to mistakes in their early days. (Transition)

Self-Confidence and Success Sports stars draw on their past successes to give them confidence in new situations. That's a formula all of us can use. One common characteristic of the great leaders I meet is self-confidence, which of course makes sense. Leaders have to inspire confidence in others. It would be difficult for others to believe in us if we don't even believe in ourselves. (One in the same)

How To Handle Rejection Passed over for a job. Disqualified for a bank loan. Turned down for a date. Rejection happens to the best of us on occasion. But rejection isn’t the end of the world. In fact, there are ways to evaluate the experience of being frozen out for a few key lessons that will put the ego undermining in perspective and help you cope with the next time someone opts not to buy what you’re selling or proposing. (My middle name)

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Self-reflection is something many avoid or refuse to allow it to creep up and point to exactly what you need to look at. Hidden behind rationalizations, self reflection in actuality can be an eye opening experience. Popping up when you least expect it but most notably late at night when you're staring at the ceiling with no other outside interferences lending you license to deny it. Self-reflection is the one person you should make it a point to face. It just might make a difference tomorrow.

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Gus Downing

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