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May 14, 2013

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Spotlight on Leadership

Vitamin Shoppe’s Gary Johnson:
LP Leaders Must Be A Catalyst
For Change

By Jennifer Overstreet
Published: May 13, 2013

Not long ago, retail loss prevention was focused on catching shoplifters. But over the course of the last couple decades, the profession has evolved along with the entire industry. Effectively countering cyber crime, organized retail crime, workplace violence and other increasingly complex threats means loss prevention executives are more than a physical presence in a store – they’re earning a voice in strategic business decisions and working cross-functionally in sophisticated ways.

In advance of our Loss Prevention Conference next month, we’ve been exploring how many of today’s seasoned LP executives have played an integral part in this evolution throughout the course of their careers. To wrap up our series, we spoke with LP Advisory Council Chairman and Vitamin Shoppe Vice President of Loss Prevention Gary Johnson about his personal career journey.

Read on to find out how his first employers gave him a leg up in the business, how rewarding it is to help others and why retail business savvy is critical to success in LP.

When were you first exposed to the loss prevention profession? What made you decide to pursue a career in loss prevention/asset protection?

I first heard about loss prevention while studying law enforcement at Western Illinois University. I decided to do my internship with a retailer named Osco Drug because the thought of catching shoplifters sounded fun — and it was one of the paid internships! After that, I became quite interested in it as a career. I always had an interest in business and law enforcement, and it paid more than a patrolman with the Chicago Police Department, so it was the best of both worlds.

How has your unique personal background helped you succeed in your LP career?

When I began in LP, my early mentors were really retail operators first and loss prevention professionals second. They taught me how to sell prevention concepts, how to show the dollars and cents of a particular initiative, and the importance of influencing people to want to play a role in reducing shrink. Certainly, I had to build experience and confidence with the core competences of loss prevention techniques, but looking back it was more important to gain proficiency with retail concepts and “soft” leadership skills.

Tell us about a particular moment, challenge or success that made you certain this was the right profession for you.

Wow, there have been many. It’s very rewarding to help people, whether it’s developing a program that keeps people safe at work, helping advance someone’s career, or catching a criminal that has hurt others. For example, I still recall working at Pier 1 Imports and how gratifying it was to solve a case involving a string of robberies, one of which involved a sexual assault of an associate. Working the data from my office in Fort Worth, I was able to connect numerous dots and link the right law enforcement agencies. Back in the day, this sharing of data didn’t frequently happen between private sector and law enforcement. I’ll never forget the associate’s reaction when I informed her that the guy who assaulted her had been caught.

The role of LP is continuing to expand and grow. When it comes to hiring and promoting team members, what kind of talent and skill sets are you looking for to be successful now and in the future?

Yes, the role of LP continues to evolve — and that’s a great thing! The C-suite has recognized the value that a professionally led loss prevention program means for the business. LP impacts not only shortage reduction and shrink but also IT security, data security, product safety, workplace violence programs, brand reputation, social media and so many more parts of the business. When looking for talent, it’s critical to find LP people who have solid core competences, but just as important is retail business savvy. Understanding how all facets of the business work, the ability to identify gaps, and, of course, build remediation plans. Leadership skills are essential. Being able to coach, train, and be a catalyst of change is vital because today’s LP professional must be able to influence and motivate cross-functional teams at all levels.

This article was published by and recently appeared in LP portion of Retail's BIG blog, a part of the National Retail Federation's (NRF) website.  An excellent resource for LP executives to incorporate in your quest for information and education of the LP industry. This is an industry leading publication and one of the best, if not the best, resource for industry leading, thought provoking material that you need to use as you continue to build your career.


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Ken Warfield was named Senior Director of Loss Prevention for Price Chopper. Prior to joining Price Chopper, Ken was at CVS Caremark for over three years as their Area Loss Prevention Director. He has also held various Loss Prevention leadership roles at such places as Ratner Companies and The Home Depot. Ken has been involved in the Loss Prevention industry for over 18 years. He earned his Bachelors of Arts degree in Criminal Justice at Mount Saint Mary's College, and also graduated from Southeastern with his Masters degree in Counseling.  Congratulations Ken!

Global Retailers Join Safety Plan for Bangladesh - This is going to be a game changer & should be! Several of the world’s largest apparel companies agreed on Monday to a landmark plan to help pay for fire safety and building improvements after the collapse last month of the Rana Plaza factory complex, which killed more than 1,100 people. In the last two days, the government has pledged to raise wages for garment workers and change labor laws to make it easier to form trade unions. (Source

GIS releases Retail Industry Background Screening Benchmarking Report - With all of the attention here recently by the FCC and Fair Credit Reporting Act this is a must read  GIS has released a Retail Industry Background Screening Benchmarking Report, shedding light on all facets of background checks including which searches are performed (and on whom) and which services will be increased. The report gives hints to reducing shrinkage while remaining consistent with industry standards. More details are available at (Source

The LPRC Benefit Denial Working Group

The LPRC Benefit Denial Working Group and two of its leaders Best Buy’s Tim Fisher and consultant Bob DiLonardo were quoted in a Security Directors Magazine article on BD. Also featured were LPRC members MWV and Proteqt. Benefit denial holds promise for superior product protection by discouraging theft sine protected items should only function or provide value after licit purchase.

THE BDWG continues to work toward a series of in-store “proof of concept” pilots by pulling together multiple retailers around select high-loss products to gain brand manufacturer participation.

The BDWG has also established sub-teams to drive innovation around BD best practices for:

1. Quickly letting offenders know an item is BD protected BEFORE they try to steal it;

2. Generating data to support the open-selling advantages BD provides brand owners in a very competitive marketplace;

a. Also to demonstrate how BD can protect brand integrity and security throughout the supply chain as well as in the store; and

3. Providing store managers with enough confidence to leave BD products on open-sale even when nervous about theft levels.

Other LPRC BDWG members include Walmart, OfficeMax, Big Lots, Sterling jewelers, Lowes, Home Depot, Sears/Kmart, Kroger Company, DiSA (Digital Safety), SiRAS, Tyco/ADT, Toys R Us, and Barnes and Noble.

Read Hayes, PhD
Research Scientist, University of Florida
Director, Loss Prevention Research Council

Best Buy's new 'benefit-denial approach' to retail shrink  Best Buy and a major, undisclosed office-supply retail chain are testing a new consumer-friendly packaging approach to combat theft, all the way from the supply chain to the showroom. The solution, from MeadWestvaco, based here, and ProTeqt Technologies in Massachusetts, physically locks a high-value or at-risk product from the point of manufacture to retail display, rendering it useless until it is purchased. That's where ProTeqt comes in with its software, using RFID technology at checkout counters to unlock the item. (Source

Retail Industry Technology Trend Survey Finds In-store Data Collection Significantly Up - RetailNext  At the annual RetailNext Executive Forum, which gathered nearly 100 retail executives and thought leaders, in-store analytics leader RetailNext surveyed attendees to understand their opinions about how these critical technology trends will affect them in the next few years. The survey findings revealed great interest in collecting the factual information retailers need to improve their stores to drive more sales and profit. (Source

Retailers want to track your every move 
Nordstrom's and 35 other top 100 U.S. retailers are piloting technology that tracks smartphones while inside the four walls of a store. Euclid Elements, the company bringing the technology to market, COO also helped create Google Analytics web traffic system. According to Euclid, it deliberately restricts the degree of movement detail that it provides to retailers, as StorefrontBacktalk reports: "We're making trade-offs on location granularity," said Euclid CEO Will Smith. "We're not telling them which aisle they were in. We're talking more like which floor people are on." Asked why the geolocation data isn't more specific, Smith said, "Because retailers won't pay us for it." But Euclid is just one vendor and one approach. Swarm Solutions can "provide personalized offers based on shopper attributes and intent" via consumers' mobile devices. Nearbuy Systems and Nomi are two other competitors. (Source

BJ's nips loss in the bud with new tech from Micros-Retail XBR Ingenium  BJ's Wholesale will leverage Micros-Retail's loss prevention and business analytics solution, XBR Ingenium, to increase its asset protection team’s investigative capabilities and productivity. Micros-Retail XBR Ingenium will allow BJ’s to generate flexible and behavioral exception reports, so it can focus on key areas of fraudulent activity. The business solution offers an interactive dashboard, so field users can quickly spot high-risk areas in their stores and districts. (Source

MAPCO's 377 convenience stores - POS Skimming Attack Highlights Retail Trend
Malware attacks like the one that recently took aim at the payments processing systems of convenience store chain MAPCO Express are becoming more common. The MAPCO attack may have infected all of the 377 convenience stores that connect to MAPCO's corporate network, exposing card data associated with transactions conducted between March 14 and April 21, MAPCO announced May 6 in an FAQ on its website. Too many retailers rely on weak passwords for remote access to POS networks and devices. "If retailers change those to something that is strong and use more advanced authentication - like two-factor authentication for network access - that would greatly decrease the number of successful attacks." (Source

Why $45M in Stolen Cash Still Won’t Get Rid of Hackable ATM Cards - With U.S. accounting for about 50% of World's card fraud  The insecurity of “mag stripes,” a decades-old technology, is no secret. The use of sometimes paper-thin “skimmers” in the slots of ATMs and card swipers to lift card data from mag stripes is a commonplace crime. And more secure alternatives are well established. In Europe, Canada, Southeast Asia and parts of Latin America, card issuers and consumers are switching to so-called chip-and-PIN systems. Instead of mag stripes, cards are embedded with computer chips that are much harder to hack. But even a band of bandits hauling backpacks stuffed with millions likely won’t speed the U.S. conversion to more secure card tech. Fraud inflicts a cost, but not a high enough cost to justify the financial impact of a radical overhaul to new cards and point-of-sale systems. (Source

To do the crime you need the mules - and now there's a complete mule recruitment template package available online for sale  A valuable asset in the fraud world, money mules enable cybercriminals to cash out stolen money. After cybercriminals take over a victim’s account, they enlist the help of a third person (a mule) to retrieve the money and send it to them in an untraceable way. Trusteer’s security team has recently identified a Russian forum member who took the liberty of perfecting this scam and is now offering a universal money mule recruitment site kit. The package includes a backend administration system, web site template, spam email templates, mule correspondence templates and more. Our investigation uncovered a map of the company’s headquarters, which is conveniently located in the Moscow University campus. (Source

Test-Firing The World's First Fully 3D-Printed Gun - Active Shooters just took on a whole new look - it could be anyone now! Fifteen of its 16 pieces have been created inside an $8,000 second-hand Stratasys Dimension SST 3D printer, a machine that lays down threads of melted polymer that add up to precisely-shaped solid objects just as easily as a traditional printer lays ink on a page. The only non-printed piece is a common hardware store nail used as its firing pin. Wilson crouches over the gun and pulls out the barrel, which was printed over the course of four hours earlier the same morning. Despite the explosion that just occurred inside of it, both the barrel and the body of the gun seem entirely unscathed. "You can print a lethal device. It’s kind of scary, but that’s what we’re aiming to show,” and the blueprints were put on Wiki and later removed, but not before millions had downloaded it. (Source

After counterfeiting indictment Coach sues counterfeit seller & store for $2M for each counterfeited trademark  A new twist in the fight against counterfeiters. After the federal indictment, sue them in civil court for each trademark they sold. Especially in cases where the seller has a counterfeiting history. This might increase the stakes and long term send the right message. The Wichita, Kan., store owner had been warned in 2011 and was busted last month for continuing to sell counterfeit merchandise after the post office informed authorities of her receiving six to seven packages a month from China. (Source

Uncovering the dangers of purchasing counterfeit electronics.  The claim is that Small store operators purchase the knock off appliances to increase store margins, others say they had no idea they purchased knock-off items. Either way, when sold the public, the knock-off merchandise can be very dangerous. The fake merchandise is not UL tested, one unit when plugged in immediately began to burn through the insulation on the power cord. (Source

Thieves Prey Upon Freight Yards, Steal Valuable Containers in Northern Calif.  An unusual theft ring is targeting freight yards, but they aren’t stealing the cargo — just the empty containers valued at $25k a piece. This year they've stolen 6 so far in California. The thefts are part of a ring California Highway Patrol says stretches from the valley to the East Bay. Crooks drive onto the property of cargo storage places, attach a container to a truck and drive away. Then, they strip off the decals and re-paint the containers. CHP detained several people and recovered hundreds of thousand of dollars worth of equipment in a raid near Lodi last week. (Source

47 law enforcement officers were feloniously killed in the line of duty in 2012  According to preliminary statistics released today by the FBI. The total number of officers killed is 25 fewer than the 72 officers who died in 2011. By region, 22 officers were killed as a result of criminal acts that occurred in the South, eight officers in the West, six officers in the Northeast, five officers died due to incidents in the Midwest, and six officers were killed in the U.S. territories of Puerto Rico and the Virgin Islands. Offenders used firearms in 43 of the 47 felonious deaths. (Source

Wage Theft a New Threat to C-store Employers with groups pushing states to re-write laws  Wage theft is alleged to occur when workers are not paid the wages they are legally owed, either because employers violate minimum wage or overtime laws, or when employees are paid less than the wages they have agreed to contractually. Either way, these are existing laws with established consequences for violators. Focusing on typically low-wage and low-skilled sectors, the prime industries being used to justify new wage theft laws are construction and retail. Labor and social justice groups have also taken their fight to localities across the country. (Source

McAfee launches security service with facial and voice recognition  McAfee announced McAfee LiveSafe, an unlimited cross-device security service that uses facial and voice recognition technology to protect users’ digital lives. McAfee LiveSafe service delivers a comprehensive approach to security, while providing consumers with a simple Web-based dashboard to centrally manage security on all of their PCs, Macs, smartphones and tablets. (Source

Retail Crime News

Two Piedmont, SC schools locked down this morning because of an armed Family Dollar robbery. Two schools near the Family Dollar store were placed on lock down due to an armed gunman who had escaped following a robbery of the store. Police locked down the schools, searched the area but believe the suspect has fled the neighborhood. (Source

Details released on accidental shooting at Tyrone Mall Starbucks.  Police have released details about the accidental shooting that happened at the Tyrone Mall Starbucks over the weekend. Pamela Beck, 51 was standing in line with her friend when her gun went off. The friend, 38-year-old Amie Peterson, was shot in the left leg. Beck apparently went to put her purse down and a gun in the bottom of the purse discharged. Peterson was taken to Bayfront Medical Center and was treated and released. The incident happened around 5 p.m. Saturday. The .25 caliber semi-automatic gun had been given to Beck by her father for protection. Beck did not have a concealed weapons permit, she has not been charged, but the State Attorney's Office is reviewing the case. (Source

Surveillance video released of shooting at Fresno's Fashion Fair Mall.  Fresno police are investigating a Saturday morning shooting at Fashion Fair Mall in Fresno. Two groups were outside of the Forever 21 women's clothing store on the east side of the mall just before 11:30 a.m. when one group shot at the other and missed, striking the store instead. No one was injured during the altercation. Police are reviewing video surveillance to identify potential suspects. It is unknown whether the shooting was gang-related. (Source

Two ‘National Rent to Own’ stores burglarized Monday morning in north St Louis County.  Police are search for the suspects involved in two separate smash and grabs resulting in the loss of thousands of dollars of merchandise. The first occurred at 3:15am, the suspects were able to grab two flat screen televisions and flee. Fifteen minutes later, the suspect hit a second store smashing out the window and fleeing with two lap tops in 20 seconds. (Source

Hostage Negotiator called in to get a shoplifter out of a ceiling in a Walmart in North Wales, UK.  The shoplifter had 80 previous convictions, this time after a fight with Walmart security in the office the suspect tried to escape by jumping up into the ceiling. Police were called and attempted to get the man to come down, even calling in a special hostage negotiator. After two hours, the suspect came down. (Source

A&P Associate busted for $10,000 in return frauds in Yorktown Heights, NY.
A 22 year old A&P associate has been charged with third degree grand larceny for committing fraudulent refunds over a period of 6 months. Police say that Jillian Barnes was responsible for the theft of $10,024.43 from the grocery store. Barnes will appear in court on May 23. (Source

Burglar hiding in a grocery store overnight has a feast, then falls asleep and gets arrested.  Police say the man made himself right at home and had a little cookout inside a Bullitt County grocery store Sunday night. After every body left, the man cooked and ate six steaks, drank beer and smoked cigarettes. He also ate a birthday cake and some shrimp. A manager told police that he came to open the ValuMarket in Mt. Washington Monday morning he found 57 empty Redi-Whip whipped cream cans in the garbage. When the manager looked at surveillance video, he discovered a man came into the store shortly before closing Sunday night and hid from employees. After his feast, the man climbed into the rafters and went to sleep. Firefighters responded and helped the suspect down from the ceiling. (Source


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ORC News
More arrests in credit card fraud ring in New England  The Secret Service is investigating another ring of credit and gift card fraud in Southern New England. East Providence police made a traffic stop on Rt. 195 Thursday then arrested 2 people from New York after discovering dozens of credit and gift card valued in the thousands of dollars. The Secret Service is investigating a widespread operation out of New York City to use fraudulent credit cards to buy gift cards, which are then spent on real goods. (Source

Flint woman ordered to pay $70,000 restitution for her role in credit card fraud operation at the Walmart  In Burton, MI., the woman pleaded guilty in federal court, was a cashier at Wal-Mart, admitted that on at least 15 different occasions she sold gift cards to a man who paid with numerous, different credit card numbers. (Source

ORC? Two males busted pushing cart full of electronics out of a Walmart store in Sturgis, MI.  Just before noon Sunday, Sturgis Police were called to the Walmart in the 1500-block South Centerville Road. Officers saw two individuals trying to push a cart full of electronics, $2,300 worth, out of a side door without paying for them. The two suspects were arrested without incident and taken to the St. Joseph County Jail. (Source

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Vendor Spotlight

Contact: David Johnston
Director of Business Development

Part Two - Gift Card Fraud

Yesterday we discussed the various means of protecting your gift and stored value cards from being used in a fraud scheme. Today, we are going to present some of the more common methods of theft that we have seen across the retail industry. This list is not all-inclusive, and we would like to hear of any additional methods you have seen related to thefts involving gift cards or other stored value cards used within your company.

How do they do it?

As mentioned in our previous article, most retailers still see internal theft being the driving cause of gift card fraud. Yes, there are methods and incidents involving larger, perhaps organized, external fraud schemes, but many retailers continue to see internal theft as the leading cause of loss.

The Switch
This fraud may be simple, but still one, if not, the most commonly used.

An employee receives a gift card as payment from a customer. The card after purchase still has a balance. The employee switches the card with a zero balance card lying by the register. The customer leaves with a zero balance card, and the employee takes the customer's original card with remaining balance. Next time your customer comes back they will not be happy to learn they have a card with no balance!

Register Shut Down
This method depends on when your gift card is activated and can be difficult to catch if your POS system doesn’t show when the register is off-line, shuts down or missing a transaction.

An employee rings up a gift card and activates it at the point of purchase. Before tendering the transaction they unplug or conduct a hard shut down of the register. Did the gift card activate? Did the transaction get recorded? Some retailers have lost thousands because of this method before realizing what had occurred.

Taking Numbers
Hopefully we see less and less of this method of fraud based on improved card protection. But, if you don’t have scratch-off labels on your cards or keep an eye on blank gift cards, you could fall victim.

An employee writes down the numbers from the back of blank cards and then waits for them to be purchased by a customer. Once the card is activated, the employee has the number and can use that card either by manually ringing the gift card number at the POS or use it at the register.

Card Laundering
Depending on the capabilities of your POS system, you may find several loopholes in an associate’s ability to obtain gift cards.

An employee rings the purchase of a gift card on register #1 for $100. They complete the purchase, but do not put any money in the register (no customer is present). They go to register #2 and purchase two (2) $50 gift cards, using the gift card of $100 as tender. They then go back to register #1 and Post Void the original sale. They now have two (2) $50 "clean" gift cards that they paid nothing for.

Can't post void a gift card sale? What happens in your POS system if they cancel the sale or suspend the original transaction instead? If your gift card activates before tender, you may want to check out the ways you can negate a transaction but still activate a gift card! Play with your POS system to see if there are ways to manipulate the system.

Card Cloning
This method of theft is most often found with organized groups or external schemes, but even the internet has “how-to” documentation on rudimentary ways of cloning cards (try searching “gift card cloning”).

Blank cards are taken from the store and the magnetic card stripe is duplicated or re-programmed on additional blank cards, replicating a gift card. The “customer” then uses either the internet or a phone system to monitor the balance on the cloned card. Once a balance exists, the cloned card is used to purchase merchandise. When the legitimate customer goes to use the card, it is learned that there is no balance.

Fraudulent Purchasing of Gift Cards
Although this method is actually acts of credit card or check fraud, gift cards are often used as the merchandise of choice.

Multiple purchases of gift cards in short periods of time using the same credit card or purchasing high dollar valued cards with checks or credit cards should be looked at cautiously. Create restrictions or limits of dollar amounts on a gift card to protect against using fraudulent monies to purchase cards. Enhancement of your reporting to quickly detect multiple purchases using similar tenders should also be considered.

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 or connect with him on LinkedIn.


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Ken Warfield was named Senior Director of Loss Prevention for Price Chopper.
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10 Reasons Why Humor Is A Key to Success at Work  Tickling the funny bone is a key to success at work, but so many times we avoid using it because we don't want to offend anyone or we don't want to make ourselves look foolish. Here are 10 reasons why you should start to turn your workplace into one full of smiles and chuckles. (Boosts productivity)

Why Single-Tasking Makes You Smarter
Think the wiring in your brain is permanent, unchangeable? Think again! You can improve your brain's functionality by not multitasking! We are busy day in and day out, and find it necessary to multitask in order to get everything done, but it is damaging your brain! Use these steps to switch over to single-tasking and nurse your brain back to health. (Take a break)

10 Success Rules Your Mom Taught You
Mother's Day just ended, but that doesn't mean our mothers won't share some more of her life lessons.  I bet you never thought your basic rules of thumb your mother taught you would come back to whisper in your ear at the workplace! Well, mother definitely knows best! (Are you really going in public dressed like that?!)

Why Getting Comfortable With Discomfort Is Crucial To Success 
Stepping out of our comfort zones is, well, quite uncomfortable, but it is very necessary if we are trying to succeed. In such a competitive world, it is the ones who take the risks who have any sort of chance at getting ahead. We must find out if we are that type of person. (Where do you want to be five years from now?)

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In preparing for any interview or meeting, I would suggest that, not only do you educate yourself about the potential employer, but that you study their competitor as well, because not only do these executives know their business, the good ones will know their competitors business even better. And if you show them you've taken the time to really learn their business and the number one thing that impacts them beyond the customer which is their competitor, then they'll be impressed that you went to that effort. And at the end of the day you'll learn an entire channel of trade.

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