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December 6, 2013

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News Brief
Sponsored by WG Security Products, Inc.
Retailers Estimate Holiday Return Fraud will Cost them $3.4 Billion This Holiday Season, According to NRF Survey  

Download complete survey data; view sample charts and graphs in NRF's Retail Insight Center

As one of the most serious, but often most misunderstood, retail loss prevention issues, return fraud costs retailers billions of dollars every year. According to NRF’s 2013 Return Fraud Survey* completed by loss prevention executives at 62 retail companies, the industry will lose an estimated $8.76 billion to return fraud this year, and $3.39 billion during the holiday season alone. Overall, 5.8 percent of holiday returns are fraudulent, up slightly from 4.6 percent last year.

“While coverage of this issue paints return fraud as one of the ‘less severe’ retail crimes, the fact of the matter is that returning used or stolen items, or even using false tender to purchase items is fraud, period,” said NRF Vice President of Loss Prevention Rich Mellor. “Recent efforts to combat fraudulent activity are slowly starting to work, but criminals are becoming more savvy and technologically advanced in their methods, making it even more difficult for retailers and law enforcement to keep up with the growing problem.”

According to the survey, nearly all (94.8%) retailers polled say they have experienced the return of stolen merchandise in the last year, and 69.0 percent report that they have experienced the return of merchandise purchased on fraudulent or stolen tender. Additionally, 29.3 percent have found criminals using counterfeit receipts to return merchandise. Employee return fraud or collusion with external sources is also a big problem for retailers: nine in 10 (93.1%) report they’ve dealt with this issue in the past year. For the first time, NRF asked retailers about their experiences with return fraud and a connection to organized retail crime groups: 60.3 percent have experienced this in the past year.

One of the biggest issues for retailers is the practice of ‘wardrobing,’ or the return of used, non-defective merchandise like special occasion apparel and certain electronics. Many companies have employed specific tactics to help curb this unethical practice, and are beginning to see the fruits of their labor: 62.1 percent report having been victims of wardrobing, down from 64.9 percent last year.

The survey found 15.5 percent say they have dealt with e-receipt return fraud. And, as online sales continue to grow, 82.5 percent say they allow customers to return merchandise purchased online in their stores.

The problem of return fraud has forced many retailers to adopt policies which require customers returning merchandise to show identification. Retailers estimate that 13.97 percent of the returns made throughout the year without a receipt are fraudulent and, as a result, nearly three-quarters (73.7%) now require customers returning items without a receipt to show identification; 12.3 percent of retailers require customers making returns with a receipt to show ID, and more than one-quarter (26.3%) say they do not require identification during the return process.

When asked about return fraud and the various types of tender, almost half (49.1%) say they have witnessed an increase in gift cards/store merchandise credit fraud in the past year. One in five (19.6%) say they have seen a decrease in the fraudulent use of cash, but more than a quarter (26.8%) have seen an increase; half report no change (48.2%). Additionally, three in 10 (29.1%) say they’ve witnessed an increase in credit card fraud, 18.2 percent say those incidents have decreased and more than half (52.7%) say there’s no change from last year. This is the first time NRF has asked about tender fraud and changes.

On a scale of one to five, one being not at all effective, retailers rank their current policies at 3.55 in terms of being effective in deterring return fraud.

About the survey

NRF’s 2013 Return Fraud Survey polled senior loss prevention executives at 62 retail companies in October and November, 2013. Executives from discount stores, department stores, drug stores, supermarkets and specialty stores completed the survey.

NRF is the world’s largest retail trade association, representing discount and department stores, home goods and specialty stores, Main Street merchants, grocers, wholesalers, chain restaurants and Internet retailers from the United States and more than 45 countries. Retail is the nation’s largest private sector employer, supporting one in four U.S. jobs – 42 million working Americans. Contributing $2.5 trillion to annual GDP, retail is a daily barometer for the nation’s economy. NRF’s This is Retail campaign highlights the industry’s opportunities for life-long careers, how retailers strengthen communities, and the critical role that retail plays in driving innovation. www.nrf.com

ICSC: November sales fall short
Sales at U.S. chain stores were up 2.1% in November, or 3% without the effects of gasoline sales, according to the International Council of Shopping Centers. The group had predicted an increase of 3.5% to 4.5%. “Sales were constrained by weak apparel sales this month,” said Michael P. Niemira, chief economist, ICSC. (Source chainstoreage.com)

Fast-food strikes return amid push for wage hikes  In New York City, about 100 protesters carrying signs, blowing whistles and beating drums marched into a McDonald's at around 6:30 a.m. In Chicago, hundreds of protesters gathered outside a McDonalds at 6.15am. As a large "Christmas Grinch" ambled about in freezing temperatures, demonstrators chanted for the minimum wage to be increased to $15 per hour. Fast-food workers at the Smithsonian Air and Space Museum walked off the job in D.C.Thursday as part of national protests calling for an increase in the federal minimum wage. (Source crainsnewyork.com)

iBeacon Debuts In Apple Stores Today
Apple will have another way to communicate with and track visitors within its U.S. retail stores, using the new iBeacon messaging and locating system that’s built into iPhones and iPads. According to an Associated Press story, Apple has installed iBeacon software on several store display products within each store, and has mounted stand-alone iBeacon devices at strategic locations. The devices will send welcome messages and product information as visitors move around the store, and also track visitors’ movements, most likely for later analysis by the company. (Source ifoapplestore.com)

Can you 3D print an Hermes handbag?
3D printing's disruptive potential in the luxury goods market is a tad overstated. 3D printing will make it easier to produce molds needed for simple parts. But beyond that? There isn't much. While current plastic 3D printers are great at printing tchotchkes and toys from open-source plan sites like Thingaverse, they are terrible at printing intricate objects with moving parts, like a zipper. Also the materials they are constructed from are of higher quality than what counterfeiters could get without dramatically eating into their bottom line. As wondrous as 3D printing is, you cannot print a sheet of pebbled leather or a gold band without ponying up some cash. (Source yahoo.com)

Sears to spin off Lands' End business

Cyber Attacks Up 15 Percent Since 2010, According to Emerson, Ponemon Institute Study

Ohio County Sheriff's to increase coverage at The Highlands with on-site booking station in Wheeling, W.Va.  Ohio County Sheriff Pat Butler said merchants have hired deputies to patrol parking lots and walk the stores. "They are required to walk inside the stores at least one time during their shift," he said. (Source theintelligencer.net)

November Same Store Sales Results

Conn's up 32%
Gap up 2%

Quarterly Same Store Sales Results

Conn's Q3 up 12.6% with revenue up 11%
Ulta Beauty Q3 up 6.8% with total sales up 22.4%
Jos. A. Bank Q3 down 0.1% with net sales up 6%
Genesco Q3 down 1% with net sales up 0.3%
Sears Hometown and Outlet Stores, Inc. Q3 down 2% with net sales up 0.7%
Big Lots Q3 down 2.5% with net sales up 1.6%
American Eagle Q3 down 5% with total net revenue down 6%

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eBay News
 

eBay Investigators work with Law Enforcement Leads to Employee Arrest and Conviction

An Enterprise employee was convicted of selling 50,000 pounds of laptops and other office equipment online. The employee admitted he stole the office equipment while visiting various company locations for four years. During his interview he could not recall how it started but commented it was really easy. He is now serving a 16 month sentence.

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Canadian Push
Sponsored by Vector Security
Canada tightens rules on prepaid credit cards and on accuracy of measurements retailers use  The federal government is moving ahead with its consumer friendly agenda, unveiling new rules for prepaid credit cards, more inspections at gas pumps and plans to create a national financial code to streamline regulations and enhance consumer rights. The measures were announced at two separate events involving three cabinet ministers Tuesday morning and appear to be tied to the throne speech pledge to make consumer protection a key policy in the two years leading up to the 2015 election campaign. The government said it will introduce new regulations banning expiry dates on prepaid credit cards, as well as ensure card issuers aren’t allowed to impose fees that eat away at a card’s balance within the first year. At a separate event, Industry Minister James Moore said the government will give inspectors more tools to enforce the accuracy of measurements used by retailers to charge customers, whether it’s at gas pumps or grocery stores. The proposed regulations will call for greater frequency of inspections and increased fines for offenders. (Source canadiangrocer.com)

DDB Canada Shows Organized Retail Theft Mark-Ups for Toronto Crime Stoppers  Organized retail theft costs Canadian businesses $4 billion a year, but is often perceived as harmless shoplifting. So DDB Canada created a new campaign for Toronto Crime Stoppers, called “It Costs Us All,” to raise public awareness of the realities of organized retail theft. (Source mediabistro.com)

Fake goods valued at $6.5M seized in Toronto
Police in Toronto have charged 21 people in an investigation involving millions of dollars in fake goods and products, including wine, cosmetics and male-enhancement medications, such as Viagra. More than 100 charges were laid in connection with the sale of fake consumer goods worth an estimated $6.5 million, police say. (Source cbc.ca)

Police Seek Identity Fraud Suspect After hitting stores in Kelowna, B.C.  It appears that an unknown female suspect used the identity of a 44 year old Kamloops woman in order to obtain credit cards at The Bay, Canadian Tire and Home Depot before allegedly charging two of the cards for more than $2400. (Source welcometokelowna.com)

Surveillance images released of Mark’s Work Wearhouse theft investigation in Selkirk, Manitoba, Canada  RCMP have launched an investigation into a theft at Mark’s Work Wearhouse in Selkirk. Last Friday afternoon, police released images taken from surveillance video in the Nov. 26 theft, which happened around 9 a.m. RCMP said video surveillance showed a man and woman enter the store. The male suspect took several items from the store while the female suspect appeared to keep watch, said RCMP. (Source ctvnews.ca)

Big Lots plans to abandon Canada stores - two years in - closing 73 stores

Mississauga man facing fraud charges in identity theft case

Suspects hitting recreation centers stealing ID's and credit cards - using them at stores in Airdrie, Banff, and Canmore, Alberta 

Women steal 45 bras worth a total of $2,000 from Coquitlam store in Vancouver

Two arrested, one suspect at large in two brazen robberies in Nanaimo, Vancouver 

RCMP uses ‘Air 3’ helicopter to capture two fleeing shoplifters from Orchard Park Mall in Kelowna, British Columbia 

 

Big Data
Sponsored by Verint

The Care and Feeding of Data Scientists - they need to solve real business problems, not just play with data  As more organizations hire data scientists - especially for predictive analytics projects - IT leaders are discovering that managing people who can turn data into ideas for business actions takes a deft touch. The sharp analytical skills key to the role can sometimes get in the way of answering big-picture corporate questions. (Source cio.com)

Hiring and Big Data: Those Who Could Be Left Behind 
Recruiters, HR managers, and investors have always sought better ways of identifying who fits and has potential, and how to allocate opportunities to them. Big data holds the promise of not only vastly improved efficiencies but also bringing greater objectivity to our very unconsciously biased human decision-making. And without a doubt, predictive “people analytics” are starting to transform how employers hire, fire, and promote. As a recent Atlantic article argues, “What begins with an online screening test for entry-level workers ends with the transformation of nearly every aspect of hiring, performance assessment, and management.” (Source hbr.org)

How to start thinking like a data scientist: a managerial skill that is becoming more and more essential  Slowly but steadily, data are forcing their way into every nook and cranny of every industry, company, and job. Managers who aren’t data savvy, who can’t conduct basic analyses, interpret more complex ones, and interact with data scientists are already at a disadvantage. Companies without a large and growing cadre of data-savvy managers are similarly disadvantaged. Fortunately, you don’t have to be a data scientist or a Bayesian statistician to tease useful insights from data. This article will help you become more data literate, and it provides a small exercise that will open your eyes to the millions of small data opportunities, and enable you to work a bit more effectively with data scientists, analytics, and all things quantitative. (Source hbr.org)

How is Big Data Transforming Your 80/20 Analytics?  Even today, most organizations technically struggle to answer even the simplest 80/20 analytics questions: Which 20% of customers generate 80% of the profits? Which 20% of suppliers are responsible for 80% of customer UX complaints? What 20% of customers facilitate 80% of the most helpful referrals? Indeed, even organizations where top management keeps their eyes glued to KPI-driven dashboards have trouble agreeing on what their Top Ten Most Important Customer/Client 80/20 analytics should be. That’s not good because Big Data promises to redefine the fundamentals of the 80/20 rule. (Source hbr.org)  

 

Retail Crime News
Sponsored by Sony

Armed Robbers Raid Audemars Piguet store in Paris, stealing $1,000,000 worth of watches   "They entered, the male showed the butt of a revolver he had in his belt. Meanwhile, the lady took dozens of watches and placed them in a bag. They then left the shop on foot", said a Paris police chief. The incident happened near the Place Vendome, not far from where another major luxury boutique robbery took place 2 months ago. (Source cnn.com)

Gunmen rob armed security guard inside KC Auto Zone parts store

5 arrested for 19 burglaries, 5 armed robberies of stores in Midstate, Pa. 

Counterfeit cash circulating in Erie, PA hitting Victoria's Secret, The Gap, and Banana Republic

Ulster County, New York Grand jury indicts smash-and-grab burglary suspect on 7 counts

Shoplifting stop in Lowndes County, Georgia leads to multi-person meth bust

Two men arrested for last month’s armed robbery of the International Diamond Center in Tampa

McDonald's serves a Tennessee couple a paper bag full of cash instead of breakfast

Routine traffic stop nets Arkansas identity theft suspect  Authorities said William Elton Hall had a ledger containing dozens of names, Social Security numbers, blank checks, credit cards and bank records in his car when he was arrested Wednesday in Arkansas. (Source bayoubuzz.com)

Shooting Outside Northgate Mall in Lafayette, Louisiana  Lafayette Police are investigating a shooting outside the Northgate Mall. Police say an 18 year old man was shot in the face at around 8:00pm Thursday, while sitting outside a store. The victim has non-life threatening injuries. (Source katc.com)

Target employee charged with stealing from Royal Palm Beach, Florida store using gift card scam  A 19-year-old West Palm Beach woman was arrested Wednesday after she was accused of loading money onto gift cards without permission while working at a Target store. Kenesha K. Lott is accused of putting $500 on various gift cards without paying as she worked at the Target on Okeechobee Boulevard. She was released from the jail Thursday under supervision. On Nov. 29, a store security officer began investigating allegations of gift card misconduct by Lott. (Source palmbeachpost.com)

Suspect arrested in the Cincinnati Tiffany’s Grab and run  Police arrested Dewayne Shaw before 4 p.m. at the Drop Inn Center in Over-the-Rhine. Police say Shaw walked into the Tiffany’s store just before noon and asked to look at a ring. When the clerk placed the ring in her hand in order to display it, the suspect snatched it, knocked down the clerk and took off running. The employee, who was not identified, was not hurt. (Source wcpo.com)

Lincoln County Deputies shoot CVS armed robbery suspect in Denver; suspect was wearing a bulletproof vest and fired on police  The man went into the CVS Pharmacy just before 3 p.m. Thursday while armed with a shotgun. He jumped over the counter and demanded money, but did not get any. The suspect fled in a truck, leading police on a chase until the suspect pulled over and exited the vehicle. With deputies and detectives surrounding the scene, the suspect, who was wearing a bulletproof vest, fired five shots, two shots in the direction of officers. Deputies returned fire striking the man in the lower body disabling him and he was taken into custody. (Source gastongazette.com)

 

Today's Robberies and Burglaries

DuPage County, Mich., judge sentences would-be jewelry thief to 8 years
City G.E.A.R – Armed Robbery – Huntsville, Alabama – no injuries
O’Reilly Auto Parts – Armed Robbery – San Marcos, California – no injuries reported
Cricket Communications – Armed Robbery – Braddock, PA – employee tied up and left in closet

 

ORC News
Sponsored by Protection 1

7 Polk Winn-Dixie Employees Arrested
Polk County Sheriff’s Office Organized Retail Crime Unit deputies, in conjunction with Winn Dixie Organized Retail Crime investigators, arrested 7 Employees (5 adults and 2 juveniles) involved in an internal scheme to defraud resulting in an estimated $6,000 loss. Investigation revealed that employees were knowingly re-using Coinstar kiosk receipts turned in to cashiers in order to steal cash from the stores. Winn-Dixie asset protection team members conducted an internal investigation and discovered seven employees were involved in a scheme to use the Coinstar receipts multiple times to steal money from the store. (Source dailyridge.com)

ORC suspect gets 28 year sentence reduced to two months in jail and 20 years probation in Amherst, Va.  Stealing over $10,000 in goods from Lowe's and Walmart and selling the goods to local pawn shops Joshua Thrumer pled guilty to 14 counts of grand larceny and admitted to taking the items. (Source newsadvance.com)

ORC suspect busted after assaulting LP officer in Super Target in Naperville, ILL., - long list of priors  A man who has been arrested four times in just over six weeks on fraud- and theft-related charges remains in DuPage County Jail. He faces trial in a total of four cases involving theft, identity theft, retail theft, battery and resisting police. He stole a Dyson brand vacuum cleaner with a retail price of $449.99 from the SuperTarget on Naperville’s far west side. When confronted with the allegedly stolen appliance, Ortega “battered a female security officer and took off running” from the store. Ortega has been arrested and charged in separate cases of misdemeanor theft, misdemeanor possession of another man’s identification card and felony identity theft. (Source napervillesun.suntimes.com)

Three charged with credit card fraud
Two women and a man have been charged with credit card fraud after a Saskatoon Police Service investigation turned up new electronics, appliances and a card embossing machine. The women, ages 31 and 36, and the man, 36, were arrested December 5 after the SPS economic crime unit executed a search warrant at a residence. Inside the residence they found thousands of dollars worth of newly purchased items including computers, flat screen televisions, stereos, and a washer and drier, along with questionable identification and an embossing machine used to make credit cards, according to a police news release. Investigators believe the three are responsible for using fake credit cards to make purchases at businesses in Saskatoon and other locations in Saskatchewan. (Source thestarphoenix.com)

Kingpin Gets 124 Years In Phone Store Robberies in Detroit  The ringleader of a seven man robbery crew that terrorized cellphone stores in the metro Detroit area is going to prison for a very, very long time. Frank Richardson, 39, was sentenced Thursday to 124 years in federal prison after having been found guilty in June on 10 counts of robbery and firearms offenses. According to the U.S. Attorney, Richardson was the leader of a seven man robbery crew that committed armed robberies of Verizon and Radio Shack stores in Detroit and Eastpointe between February and May 2010. (Source cbslocal.com)

UPS driver in Washington accused of stealing phones worth $50,000  A former United Parcel Service employee from Winlock, WA. is accused of stealing boxes of cellphones worth more than $50,000 from a UPS distribution center in Chehalis. Roland E. Camps, 30, was charged with nine counts of first-degree theft and nine counts of trafficking of stolen property Tuesday. A security supervisor from UPS contacted the Lewis County Sheriff’s Office on Nov. 26 after learning that nine boxes of cellphones were not delivered to Fred Meyer and Game Stop. Each box contained between five and 10 phones and was valued between $5,490 and $6,490. Dozens of the phones were later activated across the nation. (Source tdn.com)

Spring, Texas man charged with organized retail theft  A Montgomery County grand jury indicted a Spring man on Thursday on charges of organized retail theft. According to an offense report filed with the Conroe Police Department, Marquell Jeremiah Schuster, 19, of Spring, is alleged to have engaged in the organized retail theft of merchandise. In November, a DPS Trooper observed several male suspects leave a TJ Maxx Store with multiple purses. The Trooper initiated a traffic stop, however the thieves fled. Two males were arrested after a short foot chase, the female driver first said she had been kidnapped, but then quickly arrested when they learned she was the get away driver. Over $3000 in stolen merchandise was recovered. (Source yourhoustonnews.com)

“Protection 1 is proud to be sponsoring the D-D Daily ORC column to ensure the LP industry gets the information, education and critical data they need to fight this  national epidemic.” Rex Gillette, VP Retail Sales, Protection 1.

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Vendor Spotlight
 


Surveillance Analytics

Real-Time Intelligence for Live Detection of Safety and Security Events

Nextiva Surveillance Analytics helps organizations make sense of vast amounts of security video and data, generating Actionable Intelligence for better decisions and faster, more effective action. This powerful suite of integrated analytic applications can automatically pinpoint potential breaches and significant events and send video alerts to the appropriate people, departments and agencies. Designed to address the specific safety and security requirements across critical infrastructure and enterprise environments, this platform helps organizations with a proactive approach to threat deterrence and management.

Nextiva Surveillance Analytics enhances situational awareness and can transform threat detection from a manual, resource-intensive operation to an efficient, accurate, automated process. With Nextiva Surveillance Analytics, security staff can focus on deterring and managing threats in real-time with automatic and time-critical detection capabilities, enabling them to take immediate action.

With a wide range of analytic detection functions, Nextiva Surveillance Analytics helps organizations:
 

Quickly distill and prioritize relevant video
Customize analytics rules based on individual corporate policies and environments
Escalate video that have applied rules violations for immediate response

 
Create and intelligently distribute alerts to local, remote or mobile operators virtually anywhere on the network
Minimize false alarm rates, even in complex environments with rapidly changing conditions
Increase ROI using existing security camera infrastructure and/or pre-enabled IP cameras
Operate 24 hours a day regardless of actual staffing levels

Full integration with the Nextiva Video Management Software and Nextiva PSIM platforms leverages efficiencies difficult to attain with standalone analytic products – providing a powerful situation intelligence solution.

An Indispensable Tool for a Variety of Industries

Nextiva Surveillance Analytics offers benefits to a wide variety of industries, including:
 


 
Transportation and Logistics Hubs: helps to monitor potential threats and reduce accidents with its ability to track perimeter intrusion, unattended objects, breaches to secure zones, crowding, loitering, obstructions to the traffic paths and more.


 
Urban Light Rail Networks: sophisticated analytics modules such as viewing people accessing restricted areas, detecting a person or object on platforms, unattended items left behind and suspicious activity all help these public service entities provide better protection and decrease vandalism.

 
Safe City Surveillance: helps detect suspicious vehicles causing traffic obstacles or entering restricted areas, monitor crowding or grouping of people, identify unattended objects and more.

 
Campus Environments: helps to enhance situational awareness and transform threat detection from a manual, resource-intensive operation to an efficient, accurate, automated process.

 
Energy and Utilities: enables immediate identification of perimeter intrusion, blockages to fire and emergency exits, breaches to secure zones, human or vehicle tailgating, objects left behind and more.

 
Retail: helps detect objects left behind in sensitive areas, monitor blockages to fire and emergency exits, observe traffic in high-value product areas, reaching over counters and inventory monitoring of sensitive areas.

 
Finance: helps automate and better manage security at branch offices. This solution helps financial institutions make faster and smarter decisions by providing perimeter protection and analysis about loitering, area detection, unattended objects and camera tampering.
 

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Saving Gotham: 5 Leadership Lessons We Can Learn from Batkid  Batkid has become a YouTube sensation; this viral video shows the Make-A-Wish Foundation transforming this young child diagnosed with leukemia into Batkid for the day. The child's wish compelled the people of San Francisco to it into Gotham City; use enthusiasm to compel employees to transform their organizations (You only need one idea)

The True Goal of Leadership
What do you think "leadership" means? Is it about taking action and making things happen? What if I told you that the exact opposite is the goal of leadership? Making yourself unnecessary because you have hired talented people who don't need guidance or help making important decisions is this CEO's take on the word leadership. (Don't become stuck)

Want the Best Management Team? Combine These Personality Types  With a strong management team you can do so much more. The average ideas become transformed into successful ones, and everyone has a different skill they bring to the table. Founder of the startup engine, Idealab, says that the best groups have to have a combination of four personality types. (Which personality type are you?)

5 Ways to Keep Your Company Ahead of the Curve  In this quickly advancing world, where technology is constantly being updated and traded in for something newer and better, where culture is evolving just as rapidly, you need to make sure your organization is keeping up with the changes. If you're having trouble, use these five guidelines to make sure the world doesn't pass you by. (Can you keep up?)

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Tip of the Day
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Seems like the longer a process goes, the harder it is for everyone to stay focused on the initial purpose and maintain the enthusiasm as when it began. Time and difficulty have their impact, but maintaining the passion and enthusiasm is up to each person. With the last step seemingly the easiest, it is usually the most critical step of all and many tend to approach it as if it is a mere formality when, in reality, that last step can be the biggest and, if you do not watch out, it could be a step right off the cliff.

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