Retailers Lose $7.6B to 'Wardrobing' Annually
Accounting for One-Third of All Return Fraud
How retailers are stemming returns with new rules and oversized tags

The National Retail Federation’s 2018 Organized Retail Crime survey estimated that return fraud and abuse amounted to $24 billion in 2017. Wardrobing — the return of used, non-defective merchandise — accounted for 32 percent of all retail return fraud in 2017, a loss of $7.6 billion.

NRF Vice President for Loss Prevention Bob Moraca says apparel, which includes expensive gowns and suits — typical targets of wardrobing — accounted for 13 percent of total returns.

“Only half of what’s returned can be resold,” says Stuart Rosenthal, vice president of sales and marketing for Alpha High-Theft Solutions, a brand of Checkpoint Systems, a division of CCL Industries and a provider of single-use tags. He says one report estimated that almost two-thirds of retailers have “encountered customers who use an item and then return it for a refund.”

And, he adds, “people who ‘wardrobe’ on average return about 20 items a year per person, not including items stolen and returned.”

In the past few years, retailers and the manufacturers of single-use security tags as well as companies like Appriss and Brightpearl have stepped up their efforts to confront problems like wardrobing and serial returners.

Appriss Retail provides artificial intelligence software that can pinpoint people who serially return products.

Brightpearl provides customer relationship management systems that allow retailers to better track their customers’ returns. Companies can tag a customer in the system and then monitor their purchase histories and returns, and use that to pinpoint those with higher return rates or odd patterns of behavior. stores.org

ORC Down Under:
Australia & New Zealand retailers lose billions to theft,
'micro-gangs’ and emboldened shoplifters to blame
Retail theft in Australia has soared with emboldened shoplifters, casual thieves and organised crime-backed ‘micro-gangs’ to blame, a new report has revealed. Thieves are targeting everything from the latest tech goods, jewellery and perfume to baby formula – and it’s costing businesses big bucks.

Australian and New Zealand retailers reported a staggering $3.37 billion in crime-related losses in the 2017-18 financial year, The Australia and New Zealand Retail Crime Survey 2019 released on Thursday showed. That figure represents an average loss of 0.92 percent of a retail business’s total revenue, with thieving customers the overwhelming culprits.

Just over half (57 percent) was attributed directly to shoplifting, with a 22 percent dishonest employee theft, 15 per cent non-crime related losses, and 6 percent supplier fraud.

Employee safety fears and calls for crackdown

The rise in retail theft has left employees vulnerable, the report said. This includes the trend of “micro-gangs” using “steaming” techniques – in which a small group of shoplifters, sometimes backed by organised-crime syndicates, storm a store together, overwhelming staff and terrifying staff and customers.

“Thieves are becoming more brazen. We have seen this in the recent ‘steaming’ technique used by gangs to overpower mobile phone shops in broad daylight, often intimidating staff and pushing customers out of the way to reach the stock,” University of London criminologist Dr. Emmeline Taylor said. thenewdaily.com.au

71% of American Gen-Zers are Buying Counterfeits,
Compared to 84% of Their Chinese Counterparts
Seventy-one perfect of Gen Z-ers in the U.S. have purchased a counterfeit good over the past year, while 84 percent of their Chinese counterparts have purchased a fake product in the past year, according to a new survey. In an effort to understand the attitudes and perceptions of Gen Z-ers in connection with counterfeit products (and intellectual property (“IP”) rights more generally), the International Trademark Association (“INTA”) polled 1250 Americans and 403 Chinese consumers between the ages of 18 and 23 and uncovered some telling insights on the state of the counterfeit economy.

In connection with its survey, which was completed between August and November 2018 and focused exclusively on Gen Z individuals – because by 2020, that age group is expected to comprise the most significant number of consumers globally, INTA found that 83% of the American Gen-Zers had “at least heard of IP rights,” a legal umbrella under which trademarks, trade secrets, copyrights, and patents fall. In China, a whopping 99 percent said they are aware of IP rights. thefashionlaw.com

It’s Getting Harder to Fire People for Using Pot
Groundbreaking lawsuits are making employers and states rethink the way the workplace treats weed

The stories all go something like this: An employee is ordered to take a drug test. They have a medical marijuana prescription for a legitimate illness and tell their employer as much. The employer goes ahead with the test, gets back the positive results, and fires the employee.

Most states have statutes giving companies the right to drug-test the people they hire and to fire them for coming to work under the influence; in the ones that don’t, courts have largely blessed the process. The precedents are murkier when it comes to employees who partake in a state-sanctioned, medically helpful drug in their off hours - and even more so for those who partake recreationally where it’s legal to do so. Until the last few years, courts had largely backed companies that enforce zero-tolerance drug-free workplace policies. But with legalization sweeping the country and stigmas about pot smokers fading, judges and lawmakers are beginning to side with employees. bloomberg.com

Proposed federal legislation would decriminalize marijuana nationally, clear convictions

Private equity’s role in retail has killed 1.3 million jobs, study says
Women and people of color have been disproportionately affected by closures at debt-saddled stores.

More than 1.3 million Americans have lost their jobs in the past decade as a result of private equity ownership in retail, according to a report released Wednesday. That includes 600,000 retail workers, as well as 728,000 employees in related industries. Overall, the sector added more than 1 million jobs during that period.

Ten of the 14 largest retail bankruptcies since 2012 have been at private-equity-owned companies, such as Payless ShoeSource and Claire’s, according to the study.

More than 1 million of the nation’s 15.8 million retail workers continue to work for private-equity-backed companies, including Michael’s, J. Crew and Neiman Marcus, according to the study. washingtonpost.com

JC Penney is fading. Nordstrom is struggling. Walmart is thriving.
That sums up what’s happening in retail.
Retail earnings overall this quarter aren’t looking good when compared with a year ago. A drop is being forecast for the industry. And department store chains in particular are still struggling to grow sales, whereas Walmart and Target have found pockets of growth in grocery, through their e-commerce businesses and with their in-house brands. cnbc.com

New details emerge on Amazon Go store rumored to be largest yet
More details are emerging that indicate Amazon is indeed preparing to open a 10,400-square-foot Go store in Seattle's Capitol Hill neighborhood. This would be by far its largest Go store to date. A neighborhood blogger took pictures looking inside the space that indicate it is an Amazon Go. According to Bloomberg, the Capitol Hill store was supposed to be the first Go store — and a supermarket at that, complete with a meat and seafood department, cheesemonger and produce section. The company put the opening on hold after deciding to shift to a convenience store model in 2015 in order to streamline the experience. grocerydive.com

7-Eleven develops alternative checkout option to Amazon Go
The company is rolling out a self-checkout feature in its app that allows customers to scan barcodes of products and pay via PayPal or other online methods. However, checkout is not totally automated. Upon leaving the store, one must put their smartphone with the app running face down on a scanner to complete the transaction. As with Amazon Go -- and unlike older self-checkout systems such as those at CVS or Home Depot -- there's no bag dispensing as cities such as New York follow San Francisco in banning plastic bags. 7-Eleven's process may be primitive compared to Amazon's, but it does result in a faster checkout by waiting on even a short line. zdnet.com

Simon Corporate Security to Host
Operational Intelligence Center / Law Enforcement Summit
on August 25-26, 2019 in Indianapolis, Indiana
As part of Simon’s commitment to developing strong public/private relationships with our centers and local law enforcement, we have organized numerous conferences across the country over the past decade.