A New Chapter in Retail

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Mike Lamb Named Vice President of Asset Protection for Kroger

By Loss Prevention Media Staff

Mike Lamb, LPC, has been named vice president of asset protection for Kroger. A seasoned industry leader, Lamb has served with some of the nation’s most prominent loss prevention programs, embodying a style of leadership and a standard of performance that his teams respond to, rally around, and strive to emulate. He was previously the vice president of asset protection and safety for Walmart US, where he also served as senior director operations support, asset protection prior to assuming his role as VP. Over the course of his career, he has also held leadership positions with The Home Depot and Federated Department Stores.

Mike Lamb Walmart
Mike Lamb, LPC

In addition to serving with some of the nation’s most prominent loss prevention programs, Lamb has also offered his guidance and leadership throughout the loss prevention community as a board member with the Loss Prevention Foundation (LPF), the Loss Prevention Research Council (LPRC), the Retail Industry Leaders Association (RILA) LP Steering Committee, and LP Magazine’s editorial board. Most recently, he was also recognized with the LPM “Magpie” Award for Excellence in Leadership in January 2017.

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“As a lot of people in the AP/LP industry have heard, I’ve decided to resign from Walmart and accept a role with Kroger,” said Lamb. “I thoroughly enjoyed my time and experience at Walmart. It’s an outstanding company with an outstanding history, and I will always reflect back on my time there with a sense of pride and appreciation for the opportunity and support provided to me. I established lifelong friendships with an outstanding group of AP leaders and store executives.

“I’m equally excited to join Kroger as their vice president of asset protection. Their storied past, enormous future, and legacy brand are equaled by their leadership team and core values. I could not be prouder nor more humbled to join the Kroger family and look forward to the next chapter in my career!”

To learn more about Mike Lamb, his style of leadership, and the outstanding commitment to excellence offered by the entire asset protection team at Walmart, check out “Making It Easier to Get It Right,” from the March–April 2017 issue of LP Magazine.

Shoplifting in Fitting Rooms

By Bill Turner, LPC

Any loss prevention professional who has worked in a store that sells apparel is probably familiar with customers shoplifting in fitting rooms. But how much do you know about changing shoplifting laws, current practices to control it, public opinion, and future technologies when it comes to fitting rooms?

Records are not exact, but shoplifting is estimated to cost US retailers between $24 and $40 billion per year in terms of shrink and the costs to control it.

Below are other statistics being quoted from various sources, some of which are estimates:

  • One to 2 percent of all customers enter a store with the intent to shoplift.
  • Female shoplifters outnumber men by a large margin.
  • Nine out of ten shoplifters are reported to be under the age of thirty.
  • The peak shoplifting age is fifteen.
  • Forty-nine percent of all shoplifters have attended some college.
  • Dollar for dollar, shoplifting losses outnumber bank robbery losses 300 to one.
  • According to the National Retail Federation, shoplifters are responsible for 38 percent of retail shrink.

These statistics do bear varying degree of statistical accuracy, but when it comes to shoplifting in fitting rooms, it’s difficult to find even estimates as to its magnitude. However, the anonymity offered by a fitting room is a strong draw to a shoplifter. Whether in a booster bag, booster girdle, or stroller, or wearing stolen merchandise out of a store, the fitting room seems like a great place to conceal merchandise. So what are some current methods to curb shoplifting in fitting rooms? Most are obvious and not new. They include:

  • Fitting room attendants counting garments in and out
  • Public-view monitors and highly visible video cameras outside a fitting room entrance
  • Fitting rooms located near high-traffic areas
  • Individual fitting room service at upscale retailers
  • Chimes to alert store personnel when a customer enters a fitting room area
  • Strict policies of clearing fitting rooms of left-behind apparel on a regular basis

In addition, numerous vendors are leveraging modern technology to develop methods to provide a better customer experience and, at the same time, reduce shoplifting in fitting rooms. The future may see a system that seamlessly records and tracks merchandise being taken into and out of a fitting room by an individual customer. Customers may be able to summon sales help or automatically request different sizes through a “magic mirror” in their fitting room. Nothing is off limits in terms of tech advancements to fitting rooms as long as a consumer’s privacy is not compromised in any way.

Speaking of privacy, how do shoplifting and surveillance laws affect current fitting room control? As of this writing, only thirteen states expressly prohibit use of any monitoring system in fitting rooms. Others allow some sort of monitoring to prevent shoplifting as long as the customer’s privacy remains 100 percent intact. Regardless of the state, however, any form of photography or video used within a fitting rooms area is a direct violation of the Video Voyeurism Prevention Act and thus is totally off limits as a shoplifting control method. Numerous legal cases have dealt with the dilemma of shoplifting in fitting rooms, but the one overriding standard is an individual’s “reasonable expectation of privacy.”
So the shoplifting battle and the challenges that fitting rooms pose continues. Hopefully, evolving technology will enable greater customer service for fitting room users and simultaneously establish legal means to reduce shoplifting.

The Loss Prevention Foundation Announces the Retirement of Gene Smith

Gene Smith, LPC

By Loss Prevention Media Staff

Over the past decade, the loss prevention community has taken significant steps to strengthen the profession, adapt with the changing landscape of business, and underscore the role of loss prevention as a critical component of the retail industry.

Following the birth of the Loss Prevention Foundation (LPF) in 2006, the industry watched as the LPF took root and evolved with the development of the industry’s academically accredited and internationally accepted certification programs, LPQualified (LPQ) and LPCertified (LPC), as well as several other initiatives that have helped educate the profession and set the bar for excellence across the loss prevention community.

In addition to world-class education programs, the Loss Prevention Foundation has taken many other steps to assist and elevate the men and women of loss prevention. With the support of industry retail partners and solution providers that support LPF’s mission, hundreds have received educational scholarships to advance their careers. Other initiatives have reached into the community through volunteer efforts, support of the men and women of our military, new and developing education programs, and the creation of the LPF’s Benevolent Fund, which helps support extended loss prevention families in times of great need. There are also many new and exciting opportunities that are currently in development that will only further enhance the industry. These programs have touched many lives and provide a vehicle for industry growth that we should all embrace and be proud to call our own.

Leading the foundation in these efforts has been Gene Smith, LPC. Many have known Smith for years, long before his taking over the reins as president of the LPF. For several decades leading up to his LPF role, Smith was involved in helping to build the careers of many LP professionals and has led several loss prevention departments for various retailers. Smith’s appointment as president of the LPF was a tremendous fit as an experienced and valued advocate for the loss prevention profession, a position he first accepted back in 2007.

On April 3, the LPF board of directors was informed that Smith had officially announced his retirement. Frank Johns, chairman of the board for the Loss Prevention Foundation, released a statement that includes the following:

“During the past ten years, the Loss Prevention Foundation has evolved from an idea that many thought might never come to reality into the international authority on professional loss prevention certification. Much effort has been given in creating something that has tremendous credibility and value. Because of that, we all can be proud of what LPF, LPQ, and LPC represent.

“Gene Smith has led this organization and its efforts to help elevate the profession. However, after much thought, he has decided to announce his intention to retire. No official date has been set until a replacement is made.”

The executive committee for the LPF board of directors has assembled a selection committee and has started the process of identifying a replacement, in which Smith will be involved.

Five Ways Employees Are Stealing from Your Stores Right Now

By Garett Seivold

What is the latest employee theft scam putting a dent in the profits of your retail organization? Think about any recent changes. Maybe you’ve implemented a new cash management protocol, loyalty program, or tabletop payment system. Regardless of what your stores have recently done to boost revenue, it’s likely that some employees are figuring out a way to personally enrich themselves with it.

The hottest employee theft schemes are, by nature, very personal. They are specific to each retailer depending on its business and existing security measures, such as whether or not it’s using inventory management software, as well as a host of other unique factors. That’s why a universal best practice for countering employee theft schemes is to identify, track, and analyze incidents of internal theft across the organization. Implementing targeted theft-deterrent strategies depends on consistent recordkeeping, organization, and pattern recognition. A data-driven incident management process is the only way to keep pace with an extremely adaptable foe.

That is all to say that the employee theft scams listed here may not currently be a significant cause of loss in your retail organization. However, when we ask retailers about the ways in which employees are trying to steal from them right now, these five methods keep coming up. Retailers have caught employees stealing in the following ways.

By taking advantage of customer convenience tools. Mobile point-of-sale (MPOS) devices—such as smartphones equipped with credit-card readers—are increasingly popular tools for checking out customers. They offer retailers an opportunity to accelerate checkout, accept credit card payments anywhere, and enhance the customer experience. But some employees are taking advantage of that mobility to conduct theft that might be more difficult to do in a structured checkout environment with cameras watching. At one clothing store, for example, employees recently conducted a string of bogus MPOS transactions in the men’s room, including processing false returns and putting the money on depleted gift cards that had been handed in by customers. MPOS frauds aren’t different than the popular ones listed below, but crooked store workers are trying to use checkout mobility to provide some cover to those schemes.

By bridging the real and virtual worlds. Some of the new online fraud schemes require a physical “insider” to pull off. Whether that person is doing reconnaissance for an organized retail crime group, or mapping out a retailer’s processes to look for exploits, or whether an employee applied for a job specifically to carry out a fraud plan, internal avenues of attack need to be top of mind for LP as it tries to combat online fraud.

Some employee fraud is relatively straightforward. One fraud occurring today is collusion between online buyers and employees readying packages for shipment: insider thieves simply pack the box with extra products. Weight data is key to stop this type of fraud. If you know the weight of all your SKUs, you know what to expect an online order to weigh. So if the shipping company reports back an unexpected weight, you can check the reported weight against the expected weight. These schemes are being carried out at distribution centers but also at brick-and-mortar stores that double as mini-fulfillment centers and ship to customers’ homes or to other stores. Upon recognizing an instance of process exploitation on the part of an employee, a data-driven LP team can quickly enact safeguards to protect against the type of insider fraud that was just uncovered.

With the same old tricks. Though not the most costly, the most frequently cited employee theft is the old trick of colluding with a “customer” to steal merchandise. For example, cashiers sometimes void large transactions but still place merchandise in shopping bags for customers. Others ring up only portions of an order to let accomplices walk away with stolen merchandise. Such scams dominate local news reports of arrests of store employees. At a Dollar General store in Elloree, SC, employees would wait until near the close of business, bring pre-loaded shopping carts to the register, pretend to scan most items, and leave with the carts of merchandise. Seven employees stole $56,000 over eight months, according to police. At a Walmart in Philadelphia, a four-person employee theft ring allegedly stole $60,000 worth of merchandise by only ringing up inexpensive items from large orders of merchandise, leaving the rest to go unpaid.

Strategies to reduce theft at the point-of-sale include use of electronic article surveillance; RFID technology; CCTV at POS, specifically the use of video analytics with overhead surveillance of sales counters; and maintaining hiring and employee-screening standards. By integrating high-definition video with point-of-sale transaction data, retail investigation units can quickly and successfully review video surveillance footage associated with a specific transaction to identify individuals in a sweethearting scheme.

With gift cards and pre-paid credit cards. In another type of collusion, employees are issuing pre-paid store credit cards without paying for them. Friends, family, or accomplices bring the pre-paid credit cards to the crooked cashiers at registers, where they load them up with hundreds of dollars. In a gift-card scam at a retailer in the Midwest a few months ago, an investigation found the company software allowed employees to add funds to a gift card in a cash transaction and then void the cash transaction, leaving the funds on the card. In addition, the transactions could be completed without reswiping the physical gift card. One employee’s alleged theft totaled nearly $60,000 over a ten-month period. Employee training is an integral part of curbing this type of theft.

In December 2016, police said thieves were soliciting Target and Walmart employees throughout the Atlanta metropolitan area to participate in gift-card scams, approaching them in parking lots, on social media, and elsewhere. In exchange for fraudulently loading money onto prepaid visa gift cards, the employees were being promised a small cut. Typically, thieves are telling these employees that they have jamming devices on their cell phones that will prevent the transactions from being recorded. They don’t, of course, so employees are being caught and prosecuted while thieves make off with loaded gift cards—in one case $29,000. In all these cases, employees are never paid for their participation but are the only ones who get caught and face prosecution.

With some help from above. Finally, several retailers say that strict loss prevention controls are being thwarted in some cases because supervisors are helping to cover up employee theft schemes. In one new case, for example, members of an overnight cleaning crew were stealing thousands of dollars worth of tools during breaks in their shifts. Surveillance video was capturing the activity, but a shift manager was intentionally overlooking the evidence to facilitate the crime. In that case, an audit finally uncovered the yearlong fraud.

Finally, employee crooks continue to show that they don’t lack imagination. In September, employees of a Radio Shack in Laurel, MD, turned off the electricity on the store’s breaker panel, cut the store’s surveillance DVR system, and made a holdup alarm activation call to police. “We’ve been robbed,” they falsely claimed—twice—stealing more than $55,000 in cash and merchandise.

And the latest employee theft scam at Apple stores doesn’t even involve employees. Crooks are simply dressing the part, donning a blue shirt that passes for the store uniform, and making their way into repair or storage areas to collect an armful of devices.

These are a few of the employee theft scams of the moment, but keep collecting and analyzing your incident data. It’s the best chance to learn, as your technology and retail processes change, how crooked employees are trying to exploit them.

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