Retail boosters are teams of organized criminals consisting of distracters, baggers and transporters of stolen goods. They prey on retailers like Dillard's and Victoria's Secret, both of which recently made news for the large volumes of stolen goods uncovered. Here are five tips from a fraud prevention expert to help retailers fight back against the growing plague of amateur shoplifters and professional criminals.
In an exclusive interview with
RIS News, Joe LaRocca, NRF vice president of loss prevention, outlines five important steps for retailers to take into when fighting retail fraud, which LaRocca defines as shoplifting, employee theft, administrative errors and vendor fraud
Five Fraud Fighting Steps
1.
Hire the right people. Approximately 44.5 percent of retail losses are attributed to store associates. In some instances, store employees are on the inside signaling to a team of thieves that are non-associated with the brand. As part of the hiring process, retailers need to carefully screen prospective employees - perform background checks combined with interview and careful resume evaluations.
2.
Store associates must get training on loss prevention. Employees must know how to correctly tag merchandise and how to deal with situations where they identify in-store theft. Retailers also should educate employees on methods for preventing a loss.
3.
Carefully set policies and procedures. Retailers need to define employee expectations. Make sure store associates know how to appropriately audit and double-check paperwork. If discrepancies and errors are identified, retailers must then be able to identify if the employee is stealing or if it is an instance of not following directions and the inability to perform the job. In either scenario, retailers must take corrective action and further investigate the instance.
4.
Identify the difference between how to handle amateur shoplifters vs. professional criminals. According to the Federal Bureau of Investigation, organized retail crime accounts for as much as $30 billion in retail losses every year. There is a big difference between the amateur shopper and the professional criminal and different methods on how to handle both. Amateur shoplifters tend to steal for personal gain while professional individuals or organized gangs work to systematically steal large quantities from retailers in stores, warehouses, distribution centers and goods in transit.
5.
Secure assets through the use of technology and investigative teams. In-store cameras, Internet-based video systems and software that helps retailers analyze transactions and data are technologies that retailers implement to obtain a real picture of what is happening in the overall operation, at the store level and at the associate level. Retailers also must evaluate the physical security of the building and have systems that effectively track money and merchandise. Investigative teams also are effective in identifying retail fraud and should work closely with the local police department to identify stolen property.
Dillard's and Victoria's Secret
In late August 2008, Chesapeake, Virginia-based Dillard's reported to local officials that an entire rack of Coach handbags had been stolen from its department store at Greenbrier Mall. Shortly after the theft was reported, a store associate discovered Coach purses that looked familiar on eBay and noted he saw a Dillard's tag on a bag offered online.
It may be virtually impossible for police or Dillard's employees to know whether the missing Coach bags are the same as the ones placed on eBay. In a case involving e-fencing, or crime committed on online sites where stolen goods are sold, the seller is anonymous and the risk lower that fencing through pawn shops, street corners or backs of trucks.
In another recent incident, Victoria's Secret was struck by a New York man that sold $80,000 worth of stolen Victoria's Secret bras online.
The suspect, 41-year-old George Tutaya, used eBay auction and PayPal payment accounts to sell more than 2,000 bras. He sold them for approximately $25 each, when the bras typically retail for $40 to $80. Tutaya sold the stolen merchandise out of his home in Queens, New York. Investigators recovered another 650 stolen bras at his home.
For a more in-depth look at retail fraud and organized retail crime, be sure to check out "Fighting Organized Retail Crime" in the November issue of
RIS News.
For other recent stories on retail fraud see:
Retailers Still Fighting Organized Retail Crime
Shoplifting and Retail Loss Continue Six-Year Decline
Return Fraud and Abuse Cost Retailers More than $15.5 Billion
Online Fraud Prevention
Holiday Fraudsters Get Savvier