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February 15, 2013 SUBSCRIBE

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News Brief - Sponsored by WG Security Products

Consumer spending to slow this quarter- no surprise for most now 
Consumer spending accounts for about 70 per cent of the U.S. economy and grew at a 2.2 per cent annual rate in the fourth quarter. The pace is expected to slow this quarter as households adjust to smaller paychecks and higher gasoline prices. Not to mention the lack of tax refund checks. We're dealing with a triple hit here. Obviously with this coming at this time of year means that retail America will tighten up their belts even more from a payroll prospective, just in case it's a sign of things to come for the rest of the year. (Source

Value Retailers To Win In 2013 - Here's the answer if you saw sales drops... on the 15th everyone saw the tax hike in their checks  Sarah Quinlan, Senior Vice President at MasterCard Advisors, says the payroll tax will weigh on consumer spending in 2013 making value retailers the shopping destination of choice. A must watch video if you are a retailer! (Source

The largest investment in a single store in history - the Macy's Herald Square remodel - $400M - Why?  Macy's is spending hundreds of millions of dollars to renovate its iconic Herald Square store in New York City with new retail tech. It'll be a new high-tech store and the CCTV LP work alone has been probably the biggest CCTV roll-out in LP history. (Source

Tiffany sues Costco over alleged knockoff engagement rings 
Tiffany & Co. is suing Costco Wholesale Corp. to stop the largest U.S. warehouse club chain from selling what it termed counterfeit diamond engagement rings bearing the luxury retailer's name. The trademark lawsuit filed in Manhattan federal court also calls on Costco to forfeit profits from the ring sales, plus damages of $2 million per infringement. Tiffany said it believes hundreds, if not thousands, of Costco members bought engagement rings they believed were authentic Tiffany products but were not. (Source

Retailers are hiring specific 'omnichannel' executives tasked with tying e-commerce and brick and mortars together  Belk stores is the latest to hire one, and it's been a trend for some time. The inevitable merger of the two worlds will create a new world. Are you involved in this historical evolution from an LP prospective? (Source

Barnes & Noble shares fall as Nook losses grow 
The Nook faces tough competition from other devices like Apple's iPad Mini, Amazon's Kindle and Google's Nexus tablet. They anticipate a loss for the unit from earnings before interest, taxes, depreciation and amortization to exceed the $262 million loss recorded in its 2012 fiscal year. (Source

Harris Teeter confirms reports of possible sale 
It was confirmed yesterday that they retained J.P. Morgan Securities to assist the company in holding discussions with certain parties regarding strategic alternatives. Editor's note - The grocery industry has been the most active industry this quarter in all of retail. With budget cuts, store closings, and obviously this announcement. Delhaize America, Supervalu, Harris Teeter. (Source

Envysion well positioned for continued 50% growth rates 
Parthenon Capital Partners and Capital One invest in Envysion to fund growth. Envysion integrates its own MVAAS system and is deployed in thousands of locations across the United States and Canada. The company focuses on the QSR, retail, convenience store and cinema vertical markets. In 2012, it added Popeye’s Louisiana Kitchen, Chick-fil-A, Big Lots, Murdoch’s, and many wireless dealers to its customer base, Steinfort told SSN. Matt Steinfort, CEO of Envysion, said he believes that “inevitably all multi-unit businesses, regardless of industry vertical, will expect to use video-driven business intelligence as a strategic management tool to drive operational results.” (Source

Preventing data loss is the topmost security priority: survey 
86% of IT pros that specialize in areas other than security said they are responsible for securing IT. 49% of respondents spend 40% or more of their time on IT security and compliance, while only 7% of IT pros consider security their full-time job. Looks like an opportunity here for the LP executive who wants to expand their role. (Source

Retail, food service industry top target of fraudsters  
The retail and food service industries are the top targets for attackers due to the troves of consumer data they collect – and the fact that their systems often are inadequately protected, a security firm has found. E-commerce transactions that merchants process were the primary targets of cyber criminals in 2012, followed by the food-and-beverage industry. (Source

How Fraud Rings Evade Detection 
As last week’s big card fraud bust revealed, fraud rings are becoming more sophisticated in how they avoid detection. In order to not get caught many fraud groups hire mules - people they pay to open the lines of credit for them, Knieff says. They usually target vulnerable people looking for some extra money such as college students or the homeless. The mule then opens a credit line in their name or with a fake identity. That means that the fraud gets traced back to the mule instead of the fraudster, which means it can take awhile for credit providers and law enforcement to realize that there is a full blown fraud scheme at work, rather than a few individual instances of fraud, Knieff explains. And if attacks are made against different institutions by the same group it can also be difficult to connect the dots and trace the attacks back to the original source, he adds. Great article if you are studying fraud. (Source

60,000 bottles of South Australian wine valued at $500,000 stolen during transit in New South Wales.  A big shipment of wine from South Australia seems to have 'evaporated' while being transported. Police are investigating after 60,000 bottles of wine from 12 wineries failed to arrive at a depot in New South Wales. The trailers arrived with no stock on board. The missing shipment has been valued at $500,000. Wettenhalls Transport Group, the company carrying the wine shipment, filed for bankruptcy late last month. (Source

Tampa Häagen-Dazs store is the target of a Credit Card fraud ring.  The Häagen-Dazs store in the International Plaza in is under investigation for being the point of the theft of credit and debit card information. An associate is believed to have used a thumb drive to access register information, obtaining credit and debit cards numbers which were used later to manufacture phony credit cards. Last month, police arrested two men at a Tampa Wal-Mart for using a false credit card. One man was found with 18 counterfeit cards in his wallet and 36 others in his car. The police were able to trace several of the stolen IDs back to the Häagen-Dazs store. (Source

Identity thief in Washington State could face more than 100 felony charges.  A Port Townsend man was arrested this week on charges ranging from stealing mail to identity theft, and police said he may be responsible for some of the recent mail thefts on Bainbridge Island. Adam Justin Lysiak, 38, is being held on $250,000 bail after he was arrested Tuesday in Port Townsend. More than 1,000 pounds of mail was discovered in his possession. The bust came after police received a tip that he was living in the area and running an extensive identity theft operation. Port Townsend police were joined by six other agencies when they arrested Lysiak. (Source

Credit card fraudster gets 3 yrs. in prison in Miss. 
Sentenced to 3 years for running up $10,000 in fraudulent credit card purchases of gift cards with another man in Hattiesburg, Miss. The other suspect is serving a 21 month sentence. (Source

Man admits to 5 armed robberies in Buffalo
Hitting Family Dollar, Subway, Rite Aid Pharmacies in November the man plead guilty in court this week. (Source

LP Associate at Saks Fifth Avenue arrested for the theft of $65K in merchandise.
Mario A. Chavez, a Loss Prevention Associate surrendered to the Greenwich, Connecticut Police after a warrant was issued charging him with first degree larceny and organized retail theft. Saks has been able to recover $40,000 of merchandise from Chavez’s home. (Source

A 71 year old Maryland man accused of threatening a Walmart cashier to under ring $30,000 in merchandise.  A Maryland man is being accused of not paying for approximately $30,000 in Wal-Mart goods over several years, telling a cashier that he would hurt her family if she didn't give him items for free. Franklin Rheubottom, 71, was arrested Tuesday. Court documents say the cashier, 55-year-old Teresa Long, reported Rheubottom would come to her cash register at a Wal-Mart in Eldersburg, and she wouldn't scan all of his items. Long has not been charged. Rheubottom told the media that he didn't steal from the store or threaten the cashier. He said if items weren't scanned he didn't know anything about it. Rheubottom said he planned to hire a lawyer and fight the charges. (Source

A 9 month pregnant mom takes her two children shoplifting, stealing three carts full of merchandise; arrest postponed.  Lakesha Michelle Gilchrist was stopped by Walmart Loss Prevention in Georgia as she and her two children ages 10 and 15 pushed out three shopping carts filled with over $1500 in merchandise. Gilchrist is due to deliver her baby any day, so Police postponed her arrest until after the baby arrives. Police felt that they did not want to place Gilchrist or her baby in any harm. (Source

Quarterly Same Store Sales Results

Cabela's Q4 up 12% with sales up 15.2%
Spartan Store Q3 down 1.2% with sales down 0.9%



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University of Florida, Security Research Project - Request the 2011 National Retail Security Survey: Final Report. Email Dr. Hollinger. You must send your name, title, company and address to receive password to open the .pdf file.



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IOBSE - Save the date! May 8-10, 2013 Spring Conference. Hosted by Limited Brands in Columbus, OH

2012 Thought Challenge Awards Committee

Northern Michigan University, located in Michigan’s incredible Upper Peninsula, offers one of the only baccalaureate loss prevention management programs in the United States. It is offered completely online and accepts up to 92 transfer credits. An affordable investment into a dynamic and growing profession. Learn more here

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National Food Service Security Council Tabs Industry
Veteran Joe LaRocca

The National Food Service Security Council (NFSSC) is pleased to announce that Joseph LaRocca, Founder and President of RetaiL-Partners, has been named as a featured speaker at its 34th Annual Conference, August 4-7, in Las Vegas. NFSSC is the leading trade association for loss prevention, security and risk management professionals in the QSR and casual dining restaurant industry.

“We’re very excited to have someone as experienced and highly thought of as Joe LaRocca, to present at our conference,” said Jim Forlenza, Executive Director, NFSSC. “Joe’s expertise and ability to engage his constituents has really created a unique niche in the LP industry. Combine that with his presence and force of character, and Joe is just the right type of industry leader our members want to hear. His background will bring out-of-the-box thinking to our restaurant leaders.”

Joe LaRocca is a nationally recognized leader and public speaker with nearly 20 years of loss prevention, crime prevention, security and operations experience. Before launching RetaiL Partners, LaRocca most recently served as Vice President, Loss Prevention for the National Retail Federation and served on the U.S. Department of Homeland Security, Commercial Facilities Sector Coordinating Council, and the Homeland Security Intelligence Network, National Advisory Board, in addition to working with other federal, state and local law enforcement agencies around the country. Prior to NRF, LaRocca spent nine years directing strategic and tactical loss prevention, crisis management and business continuity programs for the Walt Disney Company’s retail division.

“Joe represents a modern way of thinking and his plan to gather people involved in crime prevention in every local community and bring them together to learn, share, plan, organize and collaborate to solve problems is core to our association beliefs,” said James Brussow, CPP, Dave & Buster’s Inc., and 2013 NFSSC President.

LaRocca will present a program on emerging technologies and their effects on LP. NFSSC will host its 34th Annual Conference, August 4-7, 2013, at the M Resort Spa and Casino, in Las Vegas. The event features executive keynotes, educational sessions and workshops, roundtables, exhibits, scheduled practitioner/vendor meetings, and a host of entertaining networking functions. The education program will highlight speakers from the restaurant and loss prevention industry, presenting real-world topics and best practices, offering a host of solutions and insights for everyday situations. NFSSC will be announcing other major industry speakers over the next several weeks.

For up to date speaker and conference information, or other event info, please visit, For more information about NFSSC membership or the annual conference, please contact Jim Forlenza, Executive Director,, or at 240-252-5542.



2013 LAAORCA Award Winners

The following awards will be given next week at the LAAORCA conference. Congratulations to all!

Industry Investigator of the Year -

Mike Swett, Formerly with TJX
This award is bestowed upon a non-law enforcement investigator (private sector) for their excellent investigative skills and outstanding performance that reflects the intent and mission of LAAORCA. The nomination must be based on the investigator's personal achievement not that of task force or team.

Law Enforcement Officer of the Year -

Detective Dave Barr, Seal Beach Police Department
The award for Law Enforcement Officer of the Year is based on the recipient's investigative pursuit, professional skills, and overall impact made toward the reduction of organized retail crime. The nomination must be based on the investigator's personal achievement not that of task force or team.

Member of the Year Award -

Officer Duc Dao, Los Angeles Police Department
Elena Del Valle, JC Penney
Christian Placencia, JC Penney

The Member of the Year Award honors a LAAORCA member who goes the extra mile for the association. This member has dedicated time and effort in exemplifying and furthering the organization's intent and mission.

Sophisticated credit card fraud scheme targeting luxury retailers in Hawaii busted.  The alleged ring attempted to steal more than $300,000 from upscale boutiques and department stores in Waikiki and Ala Moana Center. They travel very quickly. They came in for a very finite amount -- period. "They were able to hit stores then depart very quickly," said Timothy Hollern, assistant special agent in charge with the U.S. Secret Service. Hollern said the group used the credit cards to purchase high-end end watches, purses, clothing items and sold them for cash. Police say the suspects were able to avoid arrest for a long period because they kept a low profile, often changing cell phones and email accounts. (Source

Three suspects arrested for electronics thefts at Walmart in Maryland. 
Worcester County Sheriff’s Office enlisted the help of the Worcester County Bureau of Investigations (WCBI), the Berlin Police Department, Maryland State Police and several local Police Departments to arrest three individuals responsible for the theft of flat screen televisions, computers and DVD’s for area Walmarts. All three have been charged with two counts of theft less than $1,000, two counts of theft from $1,000 to $10,000, theft scheme from $1,000 to $10,000 and conspiracy. (Source

Police seized $7500 worth of stolen merchandise from a New Philadelphia, OH home.  Three people are facing felony charges after Uhrichsville police found them in possession of a large amount of merchandise that was reported stolen. John Barry, Michael Graham and Jessica Johnson are all each charged with one count of theft and one count of receiving stolen property. Both charges are fifth-degree felonies. The merchandise, valued at $7,500, was stolen from a number of stores including Walmart, Dollar General and Lowe's in Uhrichsville and New Philadelphia. (Source

Major ORC bust of huge nationwide ring to be announced soon 
We can't go into the details but we'll have the story soon as it involves a nationwide group.

Organized Retail Crime:
Estimated Lost Sales Tax Revenue by State

The Food Marketing Institute has released a report containing Organized Retail Crime: Estimated Lost Sales Tax Revenue by State. Over the next several days the Daily will publish these figures. Stay tuned to see your state estimate!

State Annual Sales - Retail Trade and Food Services (2009) State % of Annual Retail Sales Est. Amount of Stolen Merchandise Attributed to ORC (by State) State Sales Tax Rates Est. Lost Sales Tax Revenue Attributed to ORC (by State)
United States $4,320,920,742,646   $30,000,000,000    
Idaho $21,887,928,410 0.51% $151,967,113 6.00% $9,118,027
Illinois $178,910,455,515 4.14% $1,242,168,969 6.25% $77,635,561
Indiana $85,301,305,055 1.97% $592,243,946 7.00% $41,457,076
Iowa $40,304,570,853 0.93% $279,833,211 6.00% $16,789,993
Kansas $34,823,433,738 0.81% $241,777,870 6.30% $15,232,006

*Note: States with no state sales tax were omitted (AK, DE, MT, NH, and OR)

For more information on organized retail crime, visit FMI's issue page.

Do you have an ORC case to share? Publishing it educates the LP & retail community
which might fuel even more jobs and funding.
Share your ORC news and help the industry grow

Vendor Spotlight

Vector Security® Partners with Risk Management Services

Partnership to focus on the overall improvement of margin and profitability for
independent hardware and home improvement retailers.

PITTSBURGH, February 14, 2013 – Vector Security® announced today a strategic partnership with Risk Management Services Loss Prevention, LLC to address the rise in employee theft and to develop solutions that use data and analytics to improve business processes for retailers. Initial offerings will be uniquely positioned to North American independent hardware retailers and home improvement outlets.

“We are pleased to partner with Risk Management Services to better serve our national account retailers and develop collaborative offerings to address their unique needs for security.” said Michael Grady, Executive Vice President, National Accounts for Vector Security. “This partnership now allows us to review information gathered at the point of sale in new and thoughtful ways. With the goal to better understand areas for improvement in business processes or to address internal issues that contribute to losses.”

The National Retail Federation recently released their Organized Retail Crime survey detailing that 96 percent of retailers have been a victim of organized retail crime over the last 12 months. Although overall shrink rates have decreased, when it comes to organized crime, retailers are seeing a rise in activity. According to the preliminary survey findings, the majority of retail shrinkage last year was due to:

     • employee theft (43.9 percent of total losses)
     • shoplifting (35.7 percent of total losses, up from just over 32 percent last year)
     • administrative error (12.1% of shrinkage)
     • vendor fraud (5.0% of shrinkage).

“Retailers need new solutions to address these trends”, said Jim Close, Managing Partner at Risk Management Services Loss Prevention, LLC. “Alongside Vector Security, we now have the ability to package solutions that analyze data to help drive our customer’s business performance and address these growing crime issues head on.”

Over the last several months, Vector Security and Risk Management Services have conducted market research, product evaluation, and customer meetings to better understand what current customers are doing in regards to Point of Sale (POS) investigations. POS is a key area of focus when gathering data and information associated with employee theft and errors.

Art Miller
Vice President, Marketing

Axonify. Read how Pep Boys reduced their shrink by 55% by overhauling their LP awareness program. Download.

Thought Challenge 

Thought Challenge Review

True Theft Deterrence?

By Mark Pikkarainen
General Manager Security Products Div.

as published on November 1, 2012

With theft on the rise, do cameras alone or EAS tags really deter theft? It sure doesn't appear to be the case. In an average retail setting, cameras are everywhere, yet theft is increasing at an alarming rate from both an internal and external perspective. Is there such a thing as a true theft deterrent solution? Studies show that one big deterrent is employee presence, yet employees are costly. On the other hand, what if the employee is the person stealing? Retailers have gone through great lengths to try to protect goods by locking them in cabinets, using elaborate dispensing systems, attaching EAS tags, or even keeping highly stolen items behind the retail counter. However, thieves have developed elaborate schemes to distract employees, disable tags, or hide stolen items on their person.

Are employees even able to pursue someone who has walked out of a store after setting off the alarm by the entry/exit point? Do the employees really care? True theft deterrence may be better accomplished with a combination of different technologies. Laser scanners for example, are an invisible, eye safe light barrier that can be combined with RFID to protect vulnerable areas within an establishment (i.e. behind a retail counter, jewelry counter, bank tellers, back rooms, server rooms, etc.) from unauthorized entrance. After clearing the read zone, correctly tagged and identified employees are free to move in and out of that space. However, any unauthorized entry can easily trigger an audible alarm (immediately draw attention to a would-be thief), trigger a camera to record incident and send immediately to central monitoring or LP for verification (robbery in process), or simply alert an employee to immediately return to the area. Employees wearing an RFID tag will also allow retailers to know if an employee who is supposed to be working in kids clothing, is for some reason now behind the jewelry counter. In such an instance, the employee's tag will be read and a camera will be triggered to record the event and send off to Loss Prevention. By using a combination of technologies, true theft deterrence is attainable for a number of situations where cameras alone or even EAS tags are prone to failure.



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Lorrussia Averett was promoted to Asset Protection Manager for Walmart Store No. 2015.
Andrew Burchett was named Loss Prevention Manager for Steinmart.

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Tips for Looking Good on Paper and in Person  With all of the advice available about resume and cover letter do's and don'ts, almost anyone can look like the perfect candidate. But just because a job candidate looks good on paper doesn't mean he will be a good fit for the company. (More than paper)

Your Nonverbal Communication Can Wreck Your Interview Giving a limp handshake, letting your eyes wander and fidgeting are just a few of the subtle blunders that can botch your success in a job interview. Although you may have been unaware you were doing these things, interviewers who pick up on negative nonverbal communication are likely to doubt your fit for the job. (Be mindful)

Be Yourself During the Interview Many job hunters are bogged down by the myth that they should go into an interview as a rigid, professional, almost inhuman version of themselves. They think they should put up a front, leave their real selves at the door and suck up at every available opportunity Did you ever think that the company brought you in because they want to get to know the real you? (Don't suck up)

10 Things to Do After the Interview The interview may be over, but your chances to make an impression is not. It takes more than a polite thank you note if you want the interviewer to know you really want the job. Here are 10 strategies to continue boosting your candidacy. (#9 involves research)

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While some may believe LP may be wearing too many hats, take a look at your counterpart in operations and ask them the same question – are they? Retail has changed and everyone in it has expanded their responsibilities. But expanding one's responsibilities is in actuality a good thing, because it forces growth and gets people out of their comfort zones and sometimes it's the only way people will grow. The path of least resistance always leads to the least amount of effort and in these times there are no paths of least resistance. So next time someone asks are we wearing too many hats, the answer should be Yes and thank God we have one to wear!

Just a thought,

Gus Downing

Gus Downing

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