Breaking News in the Industry: March 14, 2017

juvenile shoplifting consequences

Shoplifting call results in felony assault arrest

Police in Bowling Green, Kentucky, arrested a homeless woman after they were called to a shoplifting incident and said the woman kicked a police officer in the head. Kimberly Diane Ray, 33, is charged with first-degree wanton endangerment of a police officer, second-degree disorderly conduct, theft by unlawful taking under $500, menacing, third-degree terroristic threatening, third-degree assault on a police officer and third-degree assault on a corrections officer.

Police were called to a convenience store regarding a woman who was eating food from the store that she had not paid for, according to police records. When police arrived, the woman identified in records as Ray said she was tired of police harassing her and turned her back away from the officer, telling him she was done talking to him. When the officer said he needed to speak with her she said “it’s about to get violent,” which the officer interpreted as a threat to his safety. While trying to place handcuffs on Ray she pushed off of the officer, who then forced her to the ground. At this point she kicked the officer in the back of the head.Another officer arrived and she was taken into custody. While searching Ray, she yelled continuously while other customers were inside the store.

Upon arrival at the Warren County Regional Jail, an officer warned jail staff that Ray was combative. While securing her in a restraint chair, she struck a deputy jailer in the chest with her knee. While the arresting officer was taking photos of Ray she spit on the officer. She is also accused of threatening to blacken both of the arresting officer’s eyes. Ray’s bond is set at $6,000.  [For more: BG Daily News]

Why cybercrooks love alternative payments

Fraudsters are always looking for unsuspecting payments types that can be used to perpetrate their crimes. Today, that means alternative payment methods, or APMs. G2 Web Services categorizes these alternative payments among eight different types, which include peer-to-peer (P2P) payments, money service businesses (MSBs), eWallets, mobile payments, prepaid cards, vouchers, bank debits and credits or linked bank accounts and cryptocurrencies.

Dan Frechtling, CMO and chief product officer of G2 Web Services, used this analogy: hackers are cybercriminals who seek unauthorized access to data, while payment hustlers seek unauthorized access to payment methods. It’s no surprise that as credit cards have increased in security, the payment hustlers have been hard at work finding other payment method avenues to fraud. “Because fraudsters are finding it harder to launder proceeds through credit card networks, they are looking for less monitored payment types — they are exploiting loopholes and looking for weaknesses,” Frechtling said. APMs are extremely vulnerable because of their tendency to unwittingly enable crime and fraud.

“When people talk about new ways to pay, digital wallets dominate the conversation,” he noted, underscoring the increasing popularity and usage of APMs, such as digital wallets and P2P payments. P2P payments, Javelin Strategy & Research reported, will be used by nearly 100 million adults in the U.S. this year, which is about a 25 percent increase over last year and equates to about 38 percent of the U.S. adult population. There’s no doubt that these types of APMs are not going anywhere anytime soon. “It’s not really a choice — you are going to be targeted, and it’s just a matter of how good your defenses are,” Frechtling said.  [For more: PYMNTS]

Man strips down to underwear to avoid shoplifting charge

Police say a man attempting to steal a pair of jeans from Dillard’s had second thoughts and stripped down to his underwear on the sales floor when security closed in. Nineteen-year-old Issiah Qua`shon Bailey was charged with shoplifting, although he technically never left the department store with the item.

A surveillance camera operator reported suspicious activity around the denim fitting room, where an LP associate said he saw Bailey exit the fitting room and then go back in. The associate waited for Bailey to exit again and when he did a store associate entered the fitting room behind him to check it, according to a police report.

“As the associate walked into the fitting room the suspect, who had made his way to the sales floor, took off his pants in an attempt to take the stolen ones off,” police noted in the report. Bailey was standing in his underwear when loss prevention associates approached him. The jeans were recovered from the floor and the tags to the pants were found in the fitting room. The jeans were valued at $229.  [For more: Myrtle Beach Online]

LP Worldwide: Warning as £260,000 worth of fake goods removed from Fife’s streets

A crackdown on potentially dangerous fake goods flooding the market in Fife has been hailed as a huge success. Raids in Dunfermline, Kelty and Buckhaven in recent months took counterfeit products worth more than £260,000 (US$ 316,000) from the streets, while the spotlight is also being shone on unscrupulous traders who use social media sites such as Facebay to peddle their wares. Scores of trademark holders have been alerted to the crime trend apparently developing in Fife. After reaping such rewards, Fife Council has been warned against making cutbacks to the trading standards teams who have been working hard to safeguard the public.

In a report to Monday’s safer communities committee, Dawn Adamson, trading standards service manager, will call on members to endorse and support the ongoing commitment of her team to help protect consumers and legitimate businesses. “With resources becoming more stretched in these times of high austerity, we ask that members recognize the value of tackling criminality in this area, as well as doorstep crime, rogue trading and others within the trading standards remit,” she stressed. “If we fail to do so, the residents of Fife are much more likely to become victims of these crimes, rather than it being prevented by our direct interventions.”

Intelligence sharing between Fife’s trading standards service and Police Scotland led to the execution of three warrants in recent months, with premises dealing in illicit trade set up within already established business premises to sell counterfeit goods via the Facebay page on Facebook. An estimated £200,000 (US$ 314,000 worth of counterfeit goods was seized in the joint operation in Dunfermline in December, with around 120 black bags full of goods taken away for further examination. One individual was detained and interviewed under caution and enquiries into the Dunfermline case are ongoing. That was followed up by two separate warrants for different addresses in Buckhaven and Kelty last month, with seized goods said to be valued at around £60,000.   [For more: The Courier UK]

Home Depot to pay another $25M in data breach settlement

Home Depot is adding a $25 million settlement with banks and credit card companies to its rising data breach costs, which are nearing $200 million total. In September 2014, the retailer confirmed the massive data breach, which exposed payment card information from more than 50 million customers.

This month, Home Depot agreed to pay $25 million for damages that financial institutions faced as a result of the breach, Fortune reports. The big box has been amassing data breach-related expenses, such as legal fees and the costs of improving its data security, over the past three years. In March 2016, the company also agreed to pay $19.5 million to compensate customers for losses and provide identity protection.

The latest settlement “requires Home Depot to tighten its cyber-security practices and to subject its vendors to more scrutiny—a measure tied to the fact that a security flaw by a third-party payment processor made the hacked self-checkout terminals vulnerable,” Fortune reports in a March 9 article. Home Depot has also paid at least $134.5 million to groups that include Visa, MasterCard and various banks as members, Fortune says. The total cost of the breach has risen to at least $179 million, according to court documents. [For more: Hardware Retailing]

A border tax would throw a wrench into retail’s price wars

As companies like Target and Walmart go head-to-head on value, a House bill proposing a tax on imported goods threatens to undermine any progress they make. While the specifics around potential legislation remain fuzzy, as well as its odds of passing, the current version being pushed by the GOP calls for a 20 percent tax on products coming into the United States. Given that the majority of apparel, footwear and consumer electronics sold in the US are manufactured abroad, retailers have frequently, and vociferously, asserted that such a tax would wipe out their profits and force them to charge more.

That rhetoric stands directly at odds with their promise to offer low prices every day, underscoring just how tightly they’re being squeezed as they compete for penny-pinching shoppers’ dollars. “In the long-run, it’s not sustainable to absorb these costs,” Johan Gott, a principal at strategy and management consultant A.T. Kearney, told CNBC. “Retailers don’t have very large margins to play with.” Yet the very real possibility of being forced into price increases hasn’t stopped retailers from promising more consistent deals. At its recent investor day in New York City, Target said it would dial back its use of one-off coupons in favor of everyday low prices, a phrase that’s become synonymous with Walmart’s strategy.

Like Target, the world’s largest retailer over the past year has been looking at its cost structure to systematically lower prices. And on a call with investors earlier this month, a Costco executive said the club retailer, too, is moving toward an everyday low pricing model on more of its items.
Yet the rhetoric coming from these companies is a tale of two tapes. While on one hand, they’re promising to lead on price, they’re also warning that a border tax would cause. “If they try to increase ticket prices what they’re going to see is [fewer] people buying,” Murali Gokki, a managing director in AlixPartners’ retail practice, told CNBC. “Consumers have little appetite to pay a higher price.”  [For more: CNBC]

Gander Mountain files for bankruptcy

Gander Mountain, the nation’s largest chain of outdoors specialty stores, filed for Chapter 11 bankruptcy protection from its creditors with the aim of selling the business. The company, which is seeking a buyer, said it would be closing 32 of its 162 stores in the next few weeks.  Reports began circulating in January that the St. Paul-based company was suffering financially, with some vendors not being paid. In a written statement, Gander Mountain said the filing was prompted by a realization that the company lacks the capacity to reposition its faltering outlets and that the best way forward is to sell the business “on a going-concern basis.”  “The court’s protections will enable us to manage the sale process on an expedited basis while protecting the interests of our customers, employees and other stakeholders,” Gander Mountain said. Gander Mountain said it is in active discussions with several potential buyers and expects to hold an auction in late April, with an anticipated closing by May 15.

Outdoor and sporting goods chains have struggled of late. Cabela’s is being acquired by Bass Pro Shops. Eastern Outfitters, owned by Eastern Mountain Sports, filed for bankruptcy last week. Sports Authority declared bankruptcy and closed 300 stores last year. Gander also filed for bankruptcy for Overton’s Inc., a wholly owned subsidiary in North Carolina that sells boating gear and outdoor equipment through the Internet and catalog sales. Gander tried selling Overton’s last year to help the company address its financial problems, but no buyer was found. Gander said it is closing 32 “underperforming” locations in 11 states, including three Minnesota outlets located in Rogers, Mankato and Woodbury. Also closing are Wisconsin stores in Eau Claire and Germantown.

Despite the challenges facing big-box retailers from online sellers, some creditors believe Gander Mountain can survive in some form. “Gander Mountain is a good company and it has a long legacy,” said Jens Welin, executive vice president of Starcom Worldwide, a Chicago media agency that was listed as one of Gander Mountain’s biggest creditors. “There has been a lot of turbulence in the market with all of the consolidation. We are hopeful that Gander Mountain will get back on track and become successful again.”  [For more: Star Tribune]


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