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May 13, 2013

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Here's a First - Eddie Money Live in Concert Thursday night at the NRF LP Conference - Networking Reception  Co-sponsored by The Zellman Group and bluedot. NRF may not be able to give you Two Tickets to Paradise, but we've got the next best thing! Join us for food, drinks and a special concert by rock and roll icon Eddie Money. Make new connections, strengthen existing relationships and enjoy the show! (Source nrf.com)

Saks Fifth Ave. gives Boston bombing victim shopping spree  Gutsy dancer Adrianne Haslet-Davis, who lost her left foot and part of her left leg to the blasts, made a triumphant return to Boylston Street less than a month after the marathon bombings to indulge in a much-needed day of shopping therapy, courtesy of Saks Fifth Avenue. (Source bostonherald.com)

"Omnichannel retailers nowadays have to be both technology companies and data analytics companies to beat the competition.”  According to Children's Place vice president of e-commerce. Merging all of the customers data, transactions both online and off and how they navigate the website is merged into one view. We now have one single real-time view of the customer inside of a database,” he says. “We can take groups of customers that are particularly valuable to us and figure out how to achieve the highest likelihood of conversion. And it's working, with a 4000% increase in e-commerce sales to show for it over the last 9 years. Big Data is here. (Source internetretailer.com)

E-Commerce sales up 13% in Q1, topping $50 Billion.  E-commerce sales grew 13% year-over-year to $50.2 billion, marking the fourteenth consecutive quarter of positive year-over-year growth and tenth consecutive quarter of double-digit growth, according to comScore. It was also just the second quarter on record to surpass $50 billion in spending. The survey also revealed that nearly half (48%) of time spent in the retail category occurred on mobile devices, with smartphones (34%) outpacing tablets (14%). (Source technorati.com)

Canada's fashion retailer YM will pay $22.5 million to acquire bankrupt New Jersey-based Big M, the owner of retail brands Mandee, Annie Sez and Afaze, subject to approval by a bankruptcy court judge next week. YM, which operates more than 600 fashion stores under several banners including Stitches, Urban Planet and Sirens, has begun to open stores in the US and the acquisition of Big M's 129 stores would give it a strong base on the East Coast. (Source chainstoreage.com)

RadioShack faces $5.9 Million Overtime lawsuit.  A former store manager is suing RadioShack Corp. with claims the chain has been failing to pay overtime wages for the past three years. Bloomberg reports that David Verderame filed suit in Philadelphia seeking at least $5.8 million in unpaid overtime wages for all Pennsylvania RadioShack employees. (Source bloomberg.com)

JC Penney Coupon Code Results In Rush On “Free” Towels and Washcloths.  JC Penney issued a coupon code late last week for $10 off purchases of $10 or more. Customers seized the opportunity to find small purchases adding up to $10 and then getting those things for zero dollars. Since there were apparently no limits sent on the use of the code, customers could just keep using it over and over again, depleting the inventory on the JCP website. (Source businessinsider.com)

Your Employer doesn’t care if Marijuana is Legal; Colorado facing Appeal on Employee termination for failed drug test.  As some states moved to legalize marijuana, the substance is still illegal federally and employers are using that federal law to terminate employees who fail a company’s random drug test. (Source safetynewsalert.com)

The U.S. is a "playground" for ATM cybercriminals worldwide  Last week's $45M ATM cash-out scheme, a coordinated effort to make withdrawals from multiple ATMs within a short period of time, typically hours, could serve as a primer for future attacks aimed specifically at U.S. accounts. Because of outdated payment-card technology and ineffective transaction monitoring systems. "It's all about the cross-border fraud targeting the U.S." As other countries have adopted chip-and-PIN technology that conforms to the Europay, MasterCard, Visa or EMV standard, more card fraud has migrated to the U.S., adds John Buzzard of FICO's Card Alert Service. (Source govinfosecurity.com)

New York State to Ask Smartphone Makers to Help Prevent Thefts  New York State attorney general, Eric T. Schneiderman, is trying to get the nation’s largest cellphone makers to do more to discourage the thefts. Mr. Schneiderman will announce on Monday that he has sent letters to top executives of Apple, Google, Microsoft and Samsung seeking information from their offices about security protections, and asking for their cooperation in working on new measures to reduce theft. It's become a national epidemic and now states will start asking for help as their courts are filling up with these crimes and its citizens are being victimized. This is just the beginning. (Source nytimes.com)

Gang arrested for Rolex rampage using compromised Amex Black card  Five men have been arrested by British police after allegedly going on an extravagant $775,000 spending spree using a compromised American Express Black card. After getting hold of the full card details using faked identity documents, the gang are alleged to have used it to buy "Rolex watches, wine, diamonds, designer luggage and dining" at a number of expensive stores in London and then Barcelona, Madrid and Marbella in Spain December 2012 and March this year. (Source csoonline.com)

Safeway guard found not guilty of sexual crimes against shoplifting teen in Edmonton, Canada  A Safeway security guard was found not guilty Friday of sexually assaulting and confining a teenage girl he caught shoplifting in 2010. A jury acquitted 37-year-old James Allan Carlson on six of seven charges against him, but could not decide on a verdict on the remaining charge of extortion. On that final charge, Court of Queen’s Bench Justice June Ross declared a mistrial. Here's a case where the store detective's actions opened him up to being accused of wrong doing. Reacting to a young female teenager's fear of her father, the detective allowed the second teenager to take the blame and then gave a ride to the initial suspect back to school. Later the girl claimed that Carlson repeatedly asked her for oral sex as part of the deal, then rubbed her leg while they were in his car. She also told the jury that he forced her to expose her breasts. Carlson was found not guilty of sexual counsel of a child, sexual assault, unlawful confinement, sexual contact with a child, kidnapping and procuring a youth for sex. The Crown prosecutor’s office can attempt to re-try Carlson on the extortion charge at a later date, if they choose. (Source edmontonjournal.com)

Apparel Retail leaders consider leaving Bangladesh after deadly garment factory collapse.  Many clothing industry leaders are considering leaving Bangladesh after last month’s deadly garment factory collapse. Bangladesh offers the global garment industry something unique: Millions of workers who quickly churn out huge amounts of well-made underwear, jeans and T-shirts for the lowest wages in the world. But since the building collapse April 24 killed at least 1,100 garment workers in Bangladesh in one of the deadliest industrial tragedies in history, the country has gone from one of the industry's greatest assets to one of its biggest liabilities. (Source kvue.com)

Bangladesh to raise Minimum wages for garment workers.  Bangladesh pay hike would cost shoppers only pennies. The Trades Union Congress, an organization representing most of the U.K.'s six million unionized employees, said blaming unsafe conditions and "poverty pay" on bargain-hunting by consumers was wide of the mark. The European Union has warned Bangladesh to move quickly to make its factories safer or risk losing privileged access to the country's biggest export market. (Source utsandiego.com)


Retail Crime News


Vancouver Fred Meyer LP agent stabbed during apprehension.  A robbery suspect stabbed a store security employee at the Grand Central Fred Meyer in Vancouver Saturday afternoon while trying to flee. The suspect was located by police a short distance away and booked on charges of first-degree robbery and first-degree assault. Police said the security employee was stabbed after confronting the shoplifter as he fled the store at about 4:30 p.m. The employee, who was not immediately identified, was taken to an area hospital with what police said appeared to be non-life threatening injuries. (Source koin.com)

Two Smash and grab burglaries in Port Angeles last week.  A smash and grab of the EZ Pawn store resulted in a high speed chase topping speeds of 70mph for 10 minutes resulting in no apprehensions on Saturday. Earlier on Wednesday, the RadioShack store was broken into a 4:00 am, and that suspect is still at large. (Source peninsuladailynews.com)

Walmart shoplifter leads Police on High Speed chase in Tennessee.  A shoplifter, who was being stopped at a Walmart store in Tennessee, ran from the agent into a store restroom and attempted to flush the stolen merchandise. Upon exiting, she ran for her car. Police followed the car traveling at high rate of speed for a short distance until the suspect pulled over. (Source newsandtribune.com)

Galleria Mall in St. Louis becoming more violent; Shoplifting is taking an aggressive turn.  The Nordstrom store was hit for two handbags; the Solstice store lost $8000 of sunglasses. In both cases the suspects managed to escape. (Source kmov.com)

Woman in Pennsylvania conceals merchandise in the stroller of her unknowing teen daughter.  Police say a woman tricked her 16-year-old daughter into helping her shoplift by loading the teen’s baby stroller with cosmetics which the teen then pushed out of the JC Penney. Police have charged 33-year-old Mindy Conley with retail theft and corruption of minors. Conley concealed 37 Sephora items into the stroller. (Source wpxi.com)

Smash and Grab at a Charlotte jewelry store; $150,000 in merchandise stolen.  Police said two thieves got away with $150,000 worth of jewelry by breaking into Windsor Jewelers next to South Park Mall. The security alarm alerted police about the burglary early Wednesday morning. The thieves attempted to pawn the jewelry on Thursday, but got away again. (Source wsoctv.com)

Convicted rapist busted for shoplifting New Jersey; is on Boulder, Colorado’s ‘Most Wanted’ list.  Jawed Khouir, was wanted on a warrant for failing to appear at his sentencing for his convictions on charges of Sexual Assault, Felony Menacing plus several other charges. Last Friday, Khouir was arrested for attempting to steal $197.00 of merchandise from the TJ Maxx store in Secaucus, New Jersey. (Source dailycamera.com)

Last week's most popular news article --

The most adversarial legal advice to ever hit retail LP on the net at Lawyers.com
If your employer’s loss prevention department or rep comes knocking, there are some time-tested ways for employees to respond. “They are not your friend.” Never, ever admit to a crime, even a petty one,” she advises. “If they ask you to write down that you stole a straw and won’t do it again, tell them no." You can refuse to talk to the loss prevention rep, but they can fire you just for that. What You Should Say. Ask for Help. This is a must read by every serious loss prevention executive because this is what they can find on the net. (Source lawyers.com
 

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Enter to win a 2013 Harley-Davidson Ultra Classic Electra Glide Peace Officer Special Edition motorcycle benefitting the National Law Enforcement Officers Memorial Fund! Limited edition Harley Davidson Challenge Coins go to ticket purchasers, but hurry – there’s a limited supply. Buy your Raffle now by calling 1-877-622-BIKE (2453) or 202-737-3402.

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Identity Theft
 
Georgia ranked 2nd in identity theft cases; 100 cases resolved with one apprehension.  Ivory Newton is now the focus as the ringleader of an identity theft operation based in Bainbridge, Georgia. Police believe Newton had access to information on 100 to 200 identity theft victims. (Source walb.com)

Georgia Sheriff apprehends 14 members of an Identity Theft Ring in Tift County. Over a period of the last 60 days, the sheriff of Tift County has arrested 14 individuals responsible for identity theft. Hundreds of counts of identify theft have been charged against the group believe to have committed at least 29 separate crimes. (Source tiftongazette.com)

Colorado Identity Theft ring sends an honest teen’s life into an economic and criminal downward spiral.  Avery Kemp worked at Plato’s closet, unfortunately the store was robbed early last year and all the employee files were stolen. The identity thieves had copies of his driver license, all personal date and even a blank check for his direct deposit. For the last six moths, Kemp has had to deal with creditors and police because his checks, credit and identity were all over Colorado. (Source 9news.com)

 

ORC News
 
Sante Fe suspect arrested in connection to $12,000 iPad smash-and-grab.  Sante Fe Police have arrested 24 year old Derick Viviani for the smash and grab theft of 32 iPads from a Sante Fe Wal-Mart back in April. Viviani walked into the store about 3 a.m., smashed a case and filled a cart with 32 iPads. When employees confronted the man, police say he flashed a gun. The suspect then ran outside where an accomplice was waiting with a getaway truck. (Source kasa.com)

Orlando man steals $1,800 worth of razors, using a large dog food bag for concealment.  The D-D Daily reported last week a similar caper where a large pet food bag was used to conceal laptop computers. Last month a man in Tampa concealed $1800 of razor under a large dog food bar. Police are still seeking the identity of the suspect. (Source tampa.fl.us)

Couple robs a RadioShack of 50 cell phones and cash in Orange, CT.  The two suspects entered the store and demanded cash and merchandise, no weapon was displayed. After opening the register for the suspects, the associates were asked to lay on the ground. No one was injured during the crime. (Source news12.com)

Iowa man steals $11,000 worth of Sunglasses from Sunglass Hut.  A thief broke into the Sunglass Hut kiosk inside the Coral Ridge Mall, stealing 60 pairs of sunglasses. The suspect, David Rose was apprehended by police following a short investigation based on finger prints he had left behind. (Source kcci.com)

Four man Distraction robbery team busted in West York, PA.  West York Police started an investigation more than a year ago that led to charges being filed against four men, two who are still on the loose in connection with a multi-state retail theft ring. Police investigated a theft on April 28, 2012 of several thousand dollars from Smokers Outlet. Two men distracted the clerk while two others, acting as lookouts, while a fifth man removed the store safe. (Source fox43.com)

ID Thief hitting Jared jewelry stores and Best Buy stores in Michigan and Indiana  Police released surveillance photos of a woman wanted for identity theft at several retail stores across the state, as well as Indiana. Police say the woman committed the thefts at multiple Jared jewelry stores, including one in April at the Novi Road location, as well as Best Buys in southeast Michigan, west Michigan and Indiana. (Source myfoxdetroit.com)

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Contact: David Johnston
Director of Business Development
djohnston@lpinnovations.com

www.lpinnovations.com

Preventing Gift Card Fraud

Protecting Your Program From Loss and Liability
Part One

Gift cards have become the perfect gift for many consumers. When not certain what to buy someone for a birthday, holiday or special occasion, a gift card from their favorite retailer is a great choice. For retailers, a gift card purchase ensures the holder will purchase merchandise from their store, securing a future sale. You can’t visit a retailer, grocery store or even a convenience store today that doesn’t have gift cards for sale.

When gift cards or stored value cards first caught on in retail, many retailers were not prepared for the fraud that quickly took place. As gift cards became more popular, retailers began to see and report more incidents of fraud.

Gift card fraud occurs in all types of retailers, regardless of segment or size. Throughout the years, we have seen many sophisticated methods of fraud, some being attributed to organized retail theft, and other methods that even today seem very rudimentary and simple to conduct.

How are the losses occurring?

To best prevent losses, one must understand how the losses can occur. With stored value cards, it requires protecting the card itself as well as how the card can be used throughout your sales process. Here are some points to help make certain your company is properly protecting your stored value cards from potential theft or use in a fraud.

Protecting the Card
The first point of protection should be the card itself. Gift card providers are always developing new security features to better protect the card. Pin numbers protected by scratch off labels deter the card from being manually utilized. Encrypted magnetic strips can prevent card duplication. Unfortunately, our experience with many retailers both large and small, have seen protection such as scratch-off labels not utilized in order to reduce costs. A short-sighted decision that can easily result in loss.

Deterring Fraud at the Point of Sale
When it comes to frauds involving tenders, the point of sale is often where it occurs. Understanding how your point of sale issues, redeems and cashes cards and when the card is activated in your POS system can help you to determine various risks at your point of sale.

Card Activation
Knowing when the card is activated at your point of sale can help determine your level of vulnerability to gift card fraud. Many retailers allow their cards to activate once scanned as an item for sale, prior to the transaction being tendered and complete. This allows the retailer to become vulnerable to several methods including "laundering" of a gift card, credit card or check fraud, or known methods of organized gift card fraud. Other areas of system vulnerability include the possible post voiding of a gift card, or shutting down or unplugging the register in the middle of a transaction after a gift card is activated. The latter two are known methods used by employees to steal from a retailer. Your point of sale system as it pertains to gift card issuance and redemption will help to protect your company from gift card frauds.

Card Display and Handling
Where and how you display gift cards can also determine vulnerability to fraud. If cards are displayed in unorganized fashions or not properly maintained at the store, then how easy is it for a “customer” to take several blank cards and duplicate them for fraud.

Many retailers are “packaging” gift cards with only the bar code visible so they can activate the card. This packaging provides better protection against someone trying to steal, duplicate and return the card. If you company doesn’t use any packaging to protect your gift cards then keep your cards in an area where they can be seen by employees. This will help to deter the theft of blank cards.

The Inside Factor
As we speak with loss prevention professionals regarding gift card or stored value card frauds, one might think the largest amount of theft is from external fraud attempts. Interestingly enough, their biggest fraudsters are their own associates.

The use of exception-based reporting applications play a large role for many retailers in trying to detect potential fraud or exceptions related to gift card use. Same day purchase and redemptions or gift cards used in an employee sale are but a few of the key reports used to prevent internal theft involving gift cards.

The internal factor related to gif card fraud is not only a loss prevention concern, but a customer service concern. How often have you or someone on your team had to talk to a customer who doesn’t understand why she can’t use her gift card because it doesn’t have a balance?

Gift Cards programs are most certainly here to stay and the use of stored value cards will only increase as we continue toward a mobile environment. Understanding your gift card program, developing proper safeguards with the card and your POS System, and auditing your program for issues will better protect yourself from points of fraud. Decreasing the opportunities and likelihood of incidents will then allow you to reap the benefits of a good gift card program.

Tomorrow's part two will cover how they do it including known methods of gift card fraud.


David Johnston has served the loss prevention industry for over 26 years, holding various positions as a practitioner, consultant and solution provider. His experience and expertise throughout the years has focused primarily on data analysis, loss prevention technologies and the development of strategic initiatives. Currently the Director of Business Development with LP Innovations, David is responsible for bringing LPI’s solutions to new clients and retail verticals. You can reach him at djohnston@lpinnovations.com or connect with him on LinkedIn.

 

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Anthony Gabino was promoted to Area Loss Prevention Manager (Southeast) for Chico's FAS Inc.
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4 Reasons Your Employees Resist Change--And How to Overcome Them  Change can be scary for some people, but as a leader, you have to accept and sometime create change so you can move ahead.  Don't be concerned that not all your employees are completely on board with the changes you want to make, use these ways to make them feel safe and comfortable so that they can understand the direction you want to go! (Nobody likes to fail)

Do Your Employees Trust You?
The most important quality a leader must show is that he or she is able to be trusted.  Changes can be implemented effectively and with a higher rate of success if the employees trust their leader, but how can you be sure your employees trust you entirely? These four attributes are key in being trustworthy. (Are you considered trustworthy?)

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17 Career Secrets I Wish I Got On Graduation Day  With colleges sending off their educated, accomplished graduates, there can be some underlying worries in the backs of minds. I know I had one in particular: What the hell do I do now? The secrets come out, and even if you're not a recent graduate, it may spark something inside of you too. (Secrets of Living and Learning)

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Perception becomes reality slowly on a macro level and it's difficult to change it if it's incorrect or doesn't portray the truth. It's the same reason law enforcement separates witnesses to ensure clarity and truth. The group mind becomes influenced by opinion and agendas and distorts the true reality. One can only rely on daily vigilance based on doing what's right to hopefully impact the individuals one works with on a daily basis to carry the experience forward and be witness to what is right.

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