LP 101: Investigations and Retail Fraud

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Exploring the various types of investigations that we may become involved in, there are common ventures that traditionally challenge our investigative prowess. Retail fraud is just one of those areas, and there are new and more complex issues that are introduced on a consistent basis that demand our attention. As the boundaries of economic opportunities have expanded with the explosion of technological advancements, so too has the spectrum of potential issues that threaten the retail industry. Every new tool and trend brings with it those that are trying to defeat it, creating a constant flow of new challenges for the loss prevention department.

Retail fraud more specifically classifies theft that occurs through deception. Commonly understood as dishonesty calculated for advantage, it is the deliberate misrepresentation of facts for the purpose of depriving others of possessions, rights or other things of value whether by word or by conduct. Any omission or concealment that is injurious to another or that allows a person to take unconscionable advantage of another may constitute criminal fraud.

Retail fraud resembles theft in that both involve some form of illegal taking, but there is a key difference between the two. Theft requires only the unauthorized taking of another’s property with the intent to permanently deprive the other of the property, while retail fraud requires an additional element of false pretenses created to induce a victim to turn over property, services, or funds. Generally speaking, there are five separate elements that must be proven in incidents of retail fraud:

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• A false statement of fact
• Knowledge on the part of the perpetrator that the statement is untrue,
• Intent on the part of the perpetrator to deceive the victim
• Justifiable reliance by the victim that the statement is true, and
• Injury to the victim as a result.

Because fraud involves more planning than does theft, punishments may involve greater severity in incidents of retail fraud.

When a crime involves retail fraud, it is implied that some type of deceitful action has taken place when committing the offense. (For example, an accountant that fraudulently diverts money to their personal account may use false invoices or unauthorized checks as their method to obtain funds.) For this reason, cases involving fraud become more complicated and can be very sophisticated, involving many elements of deception. As the depths of our technology and other advancements continue to evolve, these incidents (and their solutions) will only continue to grow more complex.

Fortunately, our tools for detecting and resolving incidents of retail fraud continue to evolve as well. As our careers continue to expand and evolve, it only becomes increasingly imperative that we remain contemporary with all of the many advancements that unfold, and we continue to find new ways to recognize, discover and resolve the issues that impact the retail industry.

LPF LogoBy capitalizing on opportunities to enhance our knowledge and education, we are making an investment in our own future. To learn more about retail fraud and the certification process, visit losspreventionfoundation.org.

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