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April 10, 2014

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News Brief
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Larry Carrol was named Director of Loss Prevention for BevMo!  Larry was also the Senior LP Division Manager, Director of Loss Prevention for Save Mart Supermarkets. He has been involved in corporate loss prevention for over 26 years and has also volunteered as a Police Chaplain and Instructor in Weaponless Defense. Congratulations Larry!

Profiling Rules Said to Give F.B.I. Tactical Leeway  Attorney General Eric H. Holder Jr.’s long-awaited revisions to the Justice Department’s racial profiling rules would allow the F.B.I. to continue many, if not all, of the tactics opposed by civil rights groups, such as mapping ethnic populations and using that data to recruit informants and open investigations. The new rules, which are in draft form, expand the definition of prohibited profiling to include not just race, but religion, national origin, gender and sexual orientation. And they increase the standards that agents must meet before considering those factors. But they do not change the way the F.B.I. uses nationality to map neighborhoods, recruit informants, or look for foreign spies, according to several current and former United States officials either involved in the policy revisions or briefed on them. While the draft rules allow F.B.I. mapping to continue, they would eliminate the broad national security exemption that former Attorney General John Ashcroft put in place. (Source nytimes.com)

FedEx’s Compliance Program Failed to Halt Tobacco Smugglers - New York States $235m lawsuit - Could set the standards for same day delivery  How would FedEx know its customers were shipping millions of cigarettes? One clue was the name of a merchant authorities say used FedEx to ship 94 tons of untaxed tobacco into New York State: Cigarettes Direct To U. The suit filed by New York State Attorney General Eric Schneiderman this week, alleges the company illegally shipped 80 million untaxed cigarettes for smugglers from 2006 to 2012. Prosecutors say the shipments helped rob the state of millions in taxes and hampered efforts to discourage smoking through high prices. The suit, which joins an earlier complaint from New York City, also alleges FedEx broke a 2006 agreement with the state to stop delivering cigarettes to individuals and blacklist cigarette traffickers. Prosecutors allege that FedEx representatives negotiated rates with the cigarette sellers, knew what they were shipping, and were aware the businesses “advertised and offered the sale of untaxed cigarettes via the Internet, phone, and/or mail order.” FedEx says the company cannot open packages indiscriminately to search for cigarettes and even if a company is called Cigarettes Direct To You, that doesn’t necessarily mean the business is only selling tobacco products. “There are other products that could be shipped,” said a FedEx spokesman. “What if they are shipping office supplies?” In either case, FedEx’s compliance program did not weed out even well-known tobacco shippers. The company says that when it learned of the conduct in 2012 it ended relationships with the merchants. Editors Note: With the entire retail industry looking at same day delivery from every store out there - the question is - What's in your boxes going out there and how do you regulate it? This law suit could set the standards that have a huge impact on delivery liability. (Source wsj.com)

The worst data breaches of 2014 ... so far
You've heard about the major retail data breaches we've reported on in the Daily. But have you heard about the other major hacks at universities, the U.S. government and even the Catholic Diocese of Seattle? The Identity Theft Resource Center, which tracks data breaches, has counted 204 of them through March of the this year for a loss of 4,238,983 records related to sensitive personal information exposed through hacker cyberattacks, stolen laptops or dumb mistakes. See the worst data breaches of Q1 2014. (Source csoonline.com)

New 'Heartbleed' security bug puts usernames, passwords and CC numbers at risk for over half a million websites  A major new security vulnerability dubbed Heartbleed was disclosed this week with severe implications for the entire Web. The bug can scrape a server's memory, where sensitive user data is stored, including private data such as usernames, passwords, and credit card numbers. It's an extremely serious issue, affecting some 500,000 servers, according to Netcraft, an Internet research firm. Canada has even halted its online tax returns in the wake of Heartbleed. Some Web sites that appeared to have been affected included Yahoo and OKCupid. The experts advice? Change your passwords now! (Source cnet.com)

Study reveals only 56 percent of employees get security awareness training 
Companies aren't doing enough to raise the security awareness of their employees, with 56 percent of corporate employees in a survey by Enterprise Management Associates saying they have not undergone security or policy awareness training through their companies. According to the report, “Security Awareness Training: It's Not Just for Compliance,” 45 percent of employees received their training in a single annual session. But a one-off training session that covers a broad swath of security issues likely isn't effective. (Source scmagazine.com)

Lie detection technology that accurately reads eye behavior  EyeDetect, which monitors eye behavior, making it the first deception detection product based on an ocular-motor deception test. Validation trials showed it 85 percent accurate. The exam only takes 30-40 minutes. (Source net-security.org)

9 Out of 10 Cloud Services Are Putting European Businesses at Risk  A new report from Skyhigh Networks analyzing data from more than a million users to uncover usage and risk trends points to a need for greater employee education about data protection and privacy. A key finding was that enterprises used an average of 588 cloud services. Only 9% of the cloud services in use provide enterprise-grade security capabilities, while the remaining 91% pose medium to high security risks to organisations. (Source businesswire.com)

Cybersecurity Panel Closes 2014 Retail Asset Protection Conference  Day 3 of RILA's AP Conference closed with a panel discussion on the evolving cybersecurity threat landscape featuring Shawn Henry, President, CrowdStrike Services, Lou Stephens, Special Agent in Charge, United States Secret Service, and Richard Noguera, Head of Information Security, Gap Inc. Ryan Knisley, a security expert with Accenture, moderated the panel. The group shed light on the increasingly persistent and sophisticated threat Americans face from cyber-criminals. Following the cybersecurity discussion, the conference attendees were treated to a presentation by NASA’s Adam Steltzner, who as the lead landing engineer for NASA’s Mars Curiosity Rover, led a diverse team facing a near impossible challenge and years of set-backs. Mr. Steltzner shared his team’s journey and offered insights on maintaining focus and drive in the face of adversity, a message that resonates with asset protection professionals. This year’s conference brought industry leaders together for three days of education, research and networking focused on emerging challenges and problem-solving. (Source rila.org)

Merger of Safeway, Albertsons likely to result in store closures  
Vons and Albertsons shoppers will likely see some of their neighborhood stores disappear along with many of those jobs if a proposed merger between Safeway and Albertsons is approved. Cerberus Capital, the New York private equity firm that owns Albertsons, has orchestrated a $9.4 billion deal that would merge Safeway, owner of Vons and Vons Pavilions stores, with Albertsons. The merger would create a network of more than 2,400 supermarkets, 27 distribution centers and 20 manufacturing plants, doubling Safeway’s current footprint and closely nipping at the heels of rival Kroger, which operates 2,600 stores. (Source mercurynews.com)

Family Dollar disappointing Q2 drives big decisions - Same Store Sales down 3.8% with net sales down 6.1%  Closing 370 underperforming stores, cutting jobs and lowering prices on over 1,000 basic items following a disappointing Q2. They're also slowing new store development and as opposed to opening 525 this year they'll only open 350 to 400. (Source retailingtoday.com)

Rite Aid delivers strong 4th quarter, acquires RediClinic  In the wake of acquiring Houston-based RediClinic, Rite Aid reported revenues of $6.6 billion for the fourth quarter ended March 1, resulting from a 2.2% lift primarily attributed to an increase in pharmacy same-store sales. (Source retailingtoday.com)

Mannequins Making a Bold Comeback
From Bergdorf Goodman to Target, Stores Are Re-imaging How Mannequins Can Entice Shoppers. Mannequins are the latest weapons in the ever-intensifying push to get consumers more excited about shopping in stores rather than online. After roughly three decades during which store mannequins were generally (and sometimes eerily) headless or faceless, some stores and upscale brands including Ralph Lauren are bringing back the facial features, makeup and wigs. (Source wsj.com)

NRF: $15.9B Easter spending slightly down in 2014

First Data: March 2.1% growth remains positive, but Easter shift takes toll

$508 Billion Moving Through Mobile

Same Store Sales

Costco Same up 6% without gas
Belk up 2.9%
Rite Aid  up 2.1%
Bed Bath and Beyond up 1.7%
Dollarama  up 1.1%
Tandy Leather up 1%
Stein Mart up 0.9%
L Brands down 1%
Fred’s down 1.2%
The Buckle down 1.8%
Zumiez down 2.9%
Family Dollar down 3.8%
Pier 1 down 4.6%
Cato down 5 %

Quarterly Same Store Sales Results

Rite Aid Q4 up 2.1% with revenue up 2.2%
Bed Bath & Beyond Q4 up 1.7% with sales down 5.8%
Dollarama Q4 up 1.1% with sales up 9.9%
Pier 1 Imports Q4 adjusted for the 13-week period up 0.6%
Destination Maternity Q2 down 5.1% with net sales down 6.5%

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Government moves could force data breach confessions  Organizations in virtually all industries could soon be impacted by government moves in response to data breaches like the one that affected Target at the close of 2013. The Federal Trade Commission has asked Congress to pass a national breach notification bill, which would require companies that have their systems compromised to alert consumer and appropriate government authorities within a specific time frame. The legislation is intended to correct a situation in which a company could withhold such information for long periods of time while it tries to resolve the problem internally, but thereby leave customers at long-term risk of identity theft and personal data compromise. In addition, lawmakers in the State of California have been asked to approve legislation there that would ban businesses from storing certain types of customer data for long periods of time. This bill is aimed at reducing the window of risk for personal customer data. (Source fiercecio.com)

Spear phishing campaigns are more sophisticated: Symantec  Cyber-criminals are getting better at using targeted attack methods and strategic planning to break into the digital data vaults of major corporations, according to Symantec Corp. Last year set a record both in terms of the total number of data breaches and the total number of customer records that were compromised, the security vendor reports in its latest Internet Security Threat Report. There was a 62 per cent rise in data breaches in 2013 over the year before, for a total of 253 reported breaches. The methods used by hackers to extract information from a large corporation also hints at growing maturity. One form of targeted attack known as “spear phishing” involves a degree of social engineering where an attacker learns specific information about a target and uses it to compose fraudulent messages asking for information, or as a trojan horse to infect their computer with malware. (Source itworldcanada.com)

Windows Microsoft XP ending support -  POS Systems vulnerable  Windows XP is more than just a desktop and notebook computer operation system. It is also used in a significant number of retail point-of-sale systems (POS), restaurant systems and even ATM Banking machines are running it. And with Microsoft ending support for XP, all of these systems will be vulnerable to severe data breaches such as theft of credit card numbers and other personal information. Christopher Pogue, Director for Chicago-based Trustwave, an information and security company, said that everyone still using XP – and there is a significant number of them – should be concerned. “XP has been in production since 2001 and (is the) de-facto standard in many business verticals like point-of sale systems,” he said. He estimates that between a quarter and a third of Windows current operating systems are Windows XP – a staggering number vulnerable to attack. (Source netnewsledger.com)

Easter sales decline and shift online

Walmart first traditional retailer to plan online marketplace

"Fraud is not a person - it is a dynamic grouping of statistics that deviate from the norm."
Stuart B. Levine, CFI, CFCI
CEO, The Zellman Group & Zellman Fraudnet


Retail Crime News
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Armed man in standoff with SWAT at an Auto Part store in Forest Grove, OR  The standoff between the Washington County SWAT team and an armed man barricaded inside an auto parts store in Forest Grove is now over. According to Police, the initial call of an armed man at the K & S Wholesale and Retail Auto store came in at 5:07 p.m. According to witnesses, the owner of the K & S was inside the store at the time the suspect entered and fired two shots. Everyone was able to exit the building without injury, but the suspect remained armed and barricaded inside the store. (Source koin.com)

Suspect shot, two arrested after corner store robbery in northwest Houston  Police were called to reports of a robbery at a Valero corner store in northwest Houston late Wednesday. Surveillance video captured two armed men storming the store shortly before 9 p.m. One of the suspects jumped the counter while the other held down an employee. The men then fled on foot into a nearby neighborhood. A customer who witnessed the crime followed the suspects in his pickup truck. One of the suspects ended up getting shot, but it wasn’t immediately clear who shot him. (Source khou.com)

Los Angeles Police Seek 8 Women Who Flash Robbed a Valencia Sunglasses Hut; loss of $20,000  Investigators are looking to identify a group of at least eight young women who raided and robbed a sunglasses store in Valencia. The robbery occurred on Saturday, March 29, at approximately 2:50 p.m., in which at least eight women, believed to be between the ages of 18 and 25 years old, made off with well over $20,000 worth of merchandise, according to a statement by the Los Angeles Sheriff’s Department. (Source cbslocal.com)

Murderer convicted after 2012 shooting during jewelry store robbery in Commerce City, CO The 2012 shooting death of Bernardo Saenz, the owner of a jewelry store in Commerce City has resulted in the conviction of a 23-year-old man. Anton Valdez was convicted Wednesday of first-degree murder, robbery and conspiracy in the death of Saenz. The trial for Valdez started Monday, where evidence showed that he had shot Saenz four times at close range on March 17, 2012, killing him. (Source thedenverchannel.com)

Philadelphia jewelry thieves headed to trial in $100,000 smash & grab spree  Two Philadelphia men are headed to trial for allegedly stealing more than $100,000 worth of jewelry in a three-day smash-and-grab spree in three Lower Bucks towns. In brief court appearances Wednesday the 2 suspects waived their right to a preliminary hearing in Bensalem court, thus sending their cases on to Doylestown. The district attorney’s office, in return, agreed to reduce McGrath’s charges to one count each of theft, receiving stolen property and conspiracy and withdraw a theft and conspiracy charge against Donato, who still faces receiving stolen property and conspiracy charges. (Source buckscountycouriertimes.com)

Blountville, TX woman charged with third felony Walmart theft

Illinois Woman Steals Cosmetics from Sephora, Tries to Pin It on 12-Year-Old Daughter 

Eastlake, OH woman accused of stealing $2,000 worth of items from Target

Skimming device found at Plainview, NY TD Bank

Robberies and Burglaries

BP - Howard, WI - Armed Robbery
Beestown Grocery - Goldboro, NC – Shooting – Police have identified the suspect
Belk – Dothan, AL – Shoplifting/Robbery – suspect arrested
Boerner Firearms – Gorst, WA – Burglary
Chevron – Tacoma, WA – Armed Robbery – store hit 3 times last week
Chevron – Pocatello, ID - Armed Robbery – man with hatchet arrested
CVS – Owasso, OK - Armed Robbery – schools on lockdown, police search for suspect
Hamlin Jewelers – El Cajon, CA – Armed Robbery – suspect arrested
Holland Two Family Fare – Holland, MI – Armed Robbery – suspect facing robbery & assault charges
Miller’s Coin - Helena, MT – Robbery/ Distraction Theft – suspect arrested
Murray Smoke Shop – Salt Lake City, UT – Armed Robbery
Pool’s Grocery – Temple, TX – Armed Robbery/ Murder – suspect charged
Rivera Pharmacy – Pico Rivera, CA – Armed Robbery
Sunoco – Lockport, NY – Robbery
The Stripes – Seminole, TX – Burglary – 2 suspects arrested
Verizon – Anaheim, CA - Armed Robbery – Police release updated video
Wawa - Wilmington, DE - Robbery


ORC News

Police are shocked by Multi-Million dollars of stolen goods found in a Detroit warehouse  A sophisticated, multimillion-dollar shoplifting ring may have been operating for years before a narcotics detectives began investigating the theft of over-the-counter drugs they thought were being used to make meth. The contents inside a 7,600-square-foot warehouse near 8 Mile and Dequindre in Hazel Park shocked even hardened veteran investigators: Merchandise stacked from the floor to the ceiling, later learned to be the haul from a sophisticated, multimillion-dollar shoplifting ring in which southeast Michigan stores were targeted daily. As much as $15,000 a day was stolen in over-the-counter drugs and goods from area stores for resale on the Internet later in an operation Oakland County Sheriff Michael Bouchard said was “amazing in size and scope,” Five people have been arrested so far, including three women who were paid $2,500 in cash a day to serve as shoplifters. The shoplifters were given lists of items to sell, including high-value items such as cold medicine, antacids and other over-the-counter drugs stolen from CVS and Walgreens pharmacies. They wore specially modified clothing that allowed them to hide what they’d lifted, often stealing between $9,000 and $15,000 a day, Bouchard said. When the warehouse was raided, investigators found $75,000 in cash, about $3,000 in merchandise from Walgreens and CVS, $10,000 in items from other stores, and $3 million in perfumes, lotions and creams stolen from a Victoria’s Secret store in Las Vegas. Oakland County Sheriff stated, “They bought this warehouse about nine months ago for $200,000 in cash,” “They were generating enough cash that they could plunk down $200,000 in cash to buy a facility to expand their operations.” (Source freep.com)

Colorado Spring Police arrest 8 gang members for series of burglaries  Police say eight gang members are under arrest for a series of burglaries in Colorado Springs and El Paso County. They're calling themselves the Northside Mafia. Colorado Springs Police arrested eight suspects. Police say one suspect is a 16-year-old. 20 burglaries in both Colorado Springs and El Paso County since October put police on a hunt for the criminals. (Source krdo.com)

Louisville Metro Police arrest 4 in credit card fraud  Four arrests have been made after authorities served search warrants at two homes in a neighborhood off Poplar Level Road. Drugs and cash were seized, along with the equipment to recode stolen credit cards to make counterfeit ones. While Louisville Metro Police are handling the drug angle of the case, Secret Service agents are looking into the cybercrime end of the investigation. (Source wlky.com)

North Carolina Pawn shop bought $10K of stolen good with tags still on; Owner arrested on possession charges  As part of ongoing efforts to ensure that items sold at local pawn shops are not stolen, deputies said they discovered a Henderson County store owner selling products stolen from other stores. Henderson County deputies executed a search warrant at the Daily Dollar Pawn shop on Heritage Park Drive in Fletcher on Thursday and said they found more than $10,000 worth of stolen merchandise for sale. Between Nov. 5, 2013 and Jan. 18, 2014, someone from the Asheville area stole approximately $10,076 worth of products from Diamond Brand Outdoors in Fletcher then sold the items to Daily Dollar Pawn, according to deputies. (Source foxcarolina.com)

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Vendor Spotlight

The Analytics Ecosystem for Retail

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Exception-based reporting for retail loss prevention

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Asset Protection Information System

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The cargo theft prevention and recovery network
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Learn more about the Verisk Retail Analytics Ecosystem.


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The Qualities Employers Most Desire in Employees  According to a new study, all you need to succeed is your personality! You can easily acquire certain skill sets, but without a winning personality and ability to adapt quickly and collaborate with other individuals, you may not get the job. Check out this infographic to see which qualities are important for leaders. (Must be driven)

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Tip of the Day
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Being engaged in the business of your retailer is a critical element for every Loss Prevention executive. For decades, our industry has often been accused of being silo'ed and separate from the operators and the merchants. This separateness in many cases ultimately leads to a disconnect, a sense that we aren't part of the team. Which in actuality, regardless of your performance, it can lead to your job being eliminated or just you being replaced with someone new. So the real question is: How do you become engaged in the business and truly add value to the company's success beyond reducing shrink? And then having the courage to go make it happen. We all tend to stay in our comfort zones and remain safe. At least that's what we think. But at the end of the day, it's that comfort zone that can actually increase your risk. So the next time you're in a corporate meeting or traveling stores with your operators or merchants, go beyond with your comments and opinions – take a risk – add some value – help them run the business – you might be surprised.

Just a Thought,
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