FBI Connects to LERPnet

Last week, the NRF announced that LERPnet is now directly available to the FBI.  This has been one of the goals for LERPnet since early in its inception.  It will be interesting to see how it is used and where successes come from with this new availability.  It would be my guess that one of the benefits will be that when an ORC gang is apprehended, law enforcement will be able to look at other incidents they might be involved in ex post facto.

Read the announcment here.

Guidance for U.K. Employers on Preventing Violence/Harassment

Employers in the United Kingdom receive advice on implementing an agreement reached by a group of European employer and trade union organizations.  This guidance pack is a result of a partnership by the Health and Safety Executive (HSE), the Department for Business, Innovation and Skills (BIS), and the Advisory, Conciliation and Arbitration Service (ACAS). It is designed for use by both employers and workers.  It can be downloaded for free here.

New Anti-harassment/Violence Rules in Ontario

Canada’s two largest provinces now have laws requiring employers to seek to provide workplaces free of certain forms of “harassment”. No longer limited to human rights-related harassment, that term is broadly defined in these laws. Further, Ontario’s new law extends beyond “harassment”. It, like the federal law, also will require anti-violence policies and programs. These laws will apply regardless of whether a workplace has any prior history of such problems.    

Ontario’s Bill 168, The Occupational Health and Safety Amendment Act will come into force in June 2010.

With Canada’s two largest provinces and the federal jurisdiction now having such laws, it may well be that other provinces and territories will soon follow.  Read more here.

New Year’s Resolutions for Retail Loss Prevention

As we come upon the new year, I thought I might humbly suggest some resolutions for the retail loss prevention industry for 2010.  I’m sure some of them will be controversial but they are all made in the spirit of moving our industry forward.  Please feel free to comment.

#1 – Don’t make numbers up

In our quest to quantify what we do, let’s be careful about simply pulling numbers out of thin air or estimating numbers and presenting them as fact.  In fact, there are several parts of our business where we simply don’t have accurate numbers.  Let’s strive to change that fact, not make up facts.

#2 – Don’t make the case for loss prevention by acting like Chicken Little

The primary message I have gleaned from news articles about retail loss prevention during this past year is that things are really bad.  I mean, historically bad.  We’re talking drastically bad.  ORC gangs are hitting all the malls, shoplifting is up because of the economy, on-line auction sites are siphoning millions, if not billions, of dollars via fenced and counterfeit goods, there are no laws on the books that help us address these issues, retail theft is funding terrorism, our budgets have been cut, senior loss prevention positions are being eliminated, cats and dogs are living together…wait, that last one was actually from the movie Ghostbusters. 

And, as a result, what has happened to shrinkage?  Well, if you believe the numbers in the National Retail Security Survey (see resolution #1 above), retail shrinkage in the U.S. came in at its second lowest level in the 17 or so years the survey has been done.  I say kudos to all the practitioners in our business who have continued to improve the way we do our business, who have leveraged technology, and have evolved their approach and response to the emerging threats listed above.

#3 – Demand that our industry associations fund research and education

I like our industry associations.  I participate in several of them.  I think they are well-intentioned and have expanded what they do for our industry over the past 15 years.  The staff members of the associations are hard working, helpful, and eager to serve the industry.  Their advisory boards are comprised of individuals who give a broad representation of the retail industry.  But, the one area where I think they need to step up is in the area of funding research and education in our industry.  The lack of rigorous study and research in our industry is largely the reason that we need resolutions one and two above.

There are models for how this could work and it does not have to be difficult.  The Europeans, working through the ECR framework, have figured out how to do this effectively with the process being driven by the retailers.  I don’t see any reason this can’t happen in the U.S.  However, this will only happen if practitioners demand it.  When I look at other large professional and trade organizations, they typically have more robust offerings to their membership in this regard.

#4 – Don’t create a new name for what we do

Retail security, loss prevention, assets protection, profit protection… I really don’t care what we call our industry (I know there are some that care passionately about it), but I do know that having multiple terminologies and nomenclature does not help others understand our profession.  Look at established professions like medicine, finance, IT, HR, and others.  By and large, they have established consistent labels for positions within their industry.  There is a clear distinction in medicine between a doctor, a physician’s assistant, a registered nurse, etc.  In finance, there is a clear distinction between a bookkeeper and a CPA.  I don’t hold illusions that we are going to reach consensus in 2010, but hope we don’t have more diffusion.

FBI: Crime Rates Falling in America

High unemployment. More people on food stamps. Fewer homeowners. Yet for all the signs of recession, one thing is missing: More crime.

Figures released Monday by the FBI show national declines in murder, car thefts and other crimes. But experts are scratching their heads over ebbing crime rates, which make this recession different from other economic downturns in the past half-century. Among the early guesses as to the reasons: jobless people being at home, where they can watch for thieves, and the American population getting older. Older people generally commit fewer crimes.

The FBI figures, preliminary tabulations from the first half of 2009, show crime falling across the country, even at a time of high unemployment, foreclosures and layoffs. Most surprisingly, murder and manslaughter were down 10 percent.

Ethics Resource Center Report Says Unethical Behavior Has NOT Increased

A devastated American economy did not translate into an increase in unethical behavior at U.S. companies, according to a new study from the Ethics Resource Center (ERC).  Although the ERC’s 2009 National Business Ethics Survey report found that retaliation against employees who reported misconduct has increased slightly since a similar survey two years earlier, most other measures of ethical behavior improved.  According to the report:

• Overall misconduct at U.S. workplaces is down. Fewer employees said they had witnessed misconduct on the job. This measure fell from 56 percent in 2007 to 49 percent in 2009.
• Whistle-blowing has increased. Most workers—63 percent—who observed misconduct said that they reported it. That’s up from 58 percent two years earlier.
• Ethical culture appears to be stronger. ERC’s measures of the strength of the ethical culture in the workplace increased from 53 percent in 2007 to 62 percent in 2009.
• Pressure to cut corners has decreased. Overall, employees who perceived pressure to commit an ethics violation—to cut corners, or worse—declined slightly, from 10 percent in 2007 to 8 percent in the latest survey.
• Perceived retaliation as a result of a report of misconduct rose, from 12 to 15 percent, over the two years.

However, the ERC report sounds a warning: “The lesson for organizations is that when more settled, prosperous times return, misconduct is likely to creep upward again” as the sense of crisis dissipates.

French Court Fines eBay for Perfume Sales

A French court on Monday ordered online auction site eBay to pay 1.7 million euros (2.5 million dollars) to luxury goods maker LVMH for unauthorised selling of its perfumes, the companies said.  Louis Vuitton Moet Hennessy administrator Pierre Gode said the court ordered the payment after eBay breached an earlier ruling forbidding it from selling LVMH brand perfumes such as Kenzo, Givenchy, Christian Dior and Guerlain.

Gode said that Monday’s decision protected its right to choose how its products are sold.  Ebay’s director in France, Alexander von Schirmeister, responded in a statement that the ruling penalised consumers. In September a French court ordered eBay to pay 80,000 euros to LVMH for selling fake versions of its branded perfumes.

DHS Presentation on Threat Detection & Reaction

The Department of Homeland Security has posted a free, 23 minute on-line presentation geared to retail and shopping center sectors on the issue of recognizing potential threats.  It can be found at this link.

Is Fraud Increasing in the UK? SPSS Research Report

I’m not sure what to make of this report out of the UK conducted by SPSS/IBM.  It seems to be focused towards the IT side of business but makes a claim early on that there has been ”around a 16 per cent overall growth in fraud throughout the UK” during this recession.  But, when you look at the statistics, only 12% of surveyed companies cited an increase in fraud while “82% asserted its constancy.”

As I have asserted in the past, it is important how we present our business case around our function.  We cannot lead with questionable claims and statistics if we want to be taken credibly.  Take a look at this report here and see if you can make more sense of it that I can…

Scotland Yard Shuts Down Scam Sites

The Metropolitan Police said Thursday it shut down more than 1,200 Web sites that purported to sell merchandise such as Tiffany jewelry and Ugg boots but instead shipped counterfeit goods or nothing at all, and put shoppers at risk of identity theft and financial fraud.

The Metropolitan Police said its Central e-Crime Unit worked with U.K. domain-name registry Nominet to shut down the Web addresses of the sites, and to keep them from being re-registered.

Police said the sites were run by criminal networks, and most of the sites were run out of Asia, despite having “co.uk” domain names, thanks to false registration details. Police alleged that the Web sites are thought to have generated “millions of pounds” for the scammers.

Civil Recovery Under Attack in the UK

A recent decision by the Citzens Advice Bureau (CAB) to stand against civil recovery in the UK has led to a slew of negative publicity regarding the practice.  It is ironic that CAB labels it as an “alternative justice system” as the continued laxing of criminal sanctions regarding shoplifting almost force UK retailers to find new means to combat shoptheft.  For a BBC article on this issue, click here.

Research Report: Loss Prevention 2010

RSR Research’s latest report, “Loss Prevention 2010: Retailers Battling Shrink in Tough Times” finds more retailers than ever reporting the priority of LP rising in their organizations. These findings are based on a survey of 83 retailers in the autumn of 2009. The report can be downloaded at http://www.retailsystemsresearch.com/_document/summary/1037.

Corporate Crime Up In Canada

Corporate crime has risen in Canada over the last year, with sour economic conditions cited as a factor, according a new report.  Survey results released Thursday by global business-advisory firm PricewaterhouseCoopers shows 56 per cent of Canadian companies saying they had been victims of economic crimes within the previous 12 months. That was up four percentage points from a similar study done in 2007 and 10 points higher than what was reported in 2003.

There were 52 Canadian firms involved in the survey, which was conducted in the fall.  Read the article here.

OSHA Advised Retailers on Crowd Safety

Wal-Mart Stores Inc. and other retailers are being told by the U.S. government to take greater precautions with their Black Friday shopping events to avoid a repeat of last year, when a worker was trampled by customers. Guidance from the Occupational Safety and Health Administration includes using a bullhorn to manage crowds, setting up barricades or rope lines and clearing the entrances of shopping carts and other potentially dangerous obstacles, according to a statement released by the agency.  The National Retail Federation issued its own guidelines for its members earlier this month, and Bentonville, Ark.- based Walmart, the world’s largest retailer, is extending store hours to manage crowds.  Read the article here.

Research Poll: Americans Approve of Video Surveillance to Fight Terrorism

A recent Harris Poll survey indicates that 96 percent of U.S citizens feel the federal government and law enforcement agencies should be able to use video surveillance in an effort to counteract terrorism and help protect U.S. citizens in specific public places.

Four out of five adults feel that in extreme cases, such as a terrorist attack, the government should be able to use any available means to protect citizens, and more than half (54 percent) of U.S. adults are even willing to put a portion of the government’s stimulus funds toward setting up video surveillance to help reduce crime.   Read the full article here.

New Book Release

My good friend and colleague, Adrian Beck, has just had his new book released by Palgrave-McMillan Publishing.  In New Loss Prevention: Redefining Shrinkage Management, Beck and Colin Peacock, from Proctor & Gamble, give a fresh look at many of the traditional issues we face and challenge existing, preconceived ideas and approaches to tackling shrinkage. 

Beck is a Reader in Criminology and Head of the Department of Criminology at the University of Leicester in the United Kingdom.  He is one of the leading researchers in the area of retail loss prevention and shrinkage and the chief architect behind the ECR Road Map for Shrinkage.  Colin Peacock has global responsibility for shrinkage management, on-shelf availability and brand protection for P&G.

Use this link to open a PDF order form for the book – New Loss Prevention – Order Form

Web of Deceit: The Global Impact of Counterfeit Products

The U.S. Commerce Department estimates that piracy and counterfeiting costs U.S. businesses between $200 billion and $250 billion a year. Those ubiquitous Louis Vuitton purses sold on bedsheets by street vendors do not represent an isolated amateur act; they are directly related to fake housing components, fake vaccines and even fake airplane parts. Last year, the U.S. Air Force noted that an “unknown number” of phony airplane parts had found their way into Air Force and Navy planes. The Federal Aviation Administration estimates that 2%, or 520,000, of the 26 million airline parts installed each year are fakes-a frightening thought for anyone who flies. 

In addition, according to MarkMonitor, a San Francisco-based counterfeiting research firm, instances of “cybersquatting” (using a domain name that capitalizes on an established brand) increased steadily throughout 2008, up 18% year-over-year to more than 1.7 million instances. The number of websites devoted to selling counterfeit goods also rose to more than 87,200, up 46% from the previous year.

The 3 Habits of Highly Irritating Management Gurus

This article takes a critical look at the business self-help genre and its visible “gurus.”  According to the article, these writers tend to have three characteristics in common. Lousy leadership “gurus” are marked by a tendency to overstate the newness of their ideas, a fondness for naming “model” companies and a willingness to market various “tools” that purport to reduce leadership to a few easy steps. “If management could indeed be reduced to a few simple principles, then we would have no need for management thinkers,” the author writes.

While I would not dismiss their work out of hand, as this article does, it is an interesting phenomonen that business leaders flock to the same well-worn management principles time after time after time.  It seems there is serious money to be made by taking a timeless principle and using a new metaphor.  The more simplistic you make it, the better.  If you write it as a parable (think Who Moved My Cheese) that is the best!  Perhaps that is why you can find legions of folks who have read The One-Minute Manager but hardly a soul who has read Drucker’s The Effective Executive or The Practice of Management. 

Read the full article at The Economist.

Retail Theft Up 10% in Quebec

The Retail Council of Quebec reported Wednesday they are also increasingly victims of theft and fraud. In 2008 and so far this year, the province’s retail sector has registered economic losses of nearly $900 million – 84 per cent of that attributed to theft and fraud by staff, shoplifting and consumer fraud.

In a survey carried out for the council between July and August by geomarketer and retail researcher Altus Géocom, 54 per cent of the respondents (who represent approximately 162,000 employees working in more than 4,250 stores) reported a 10-per-cent increase in those incidents from 2007.  Read full article here.

Employee Theft Attitudes: A Disconnect with Management

After posting Lencioni’s column yesterday, I went back and reviewed some notes from a presentation I saw a couple of years ago in London by Martin Gill, one of the leading researchers in the area of loss prevention and security.  In this presentation, Gill was presenting the findings his firm, Perpetuity Group, found from offender interviews they had conducted.

When interviewed after the fact, employees who had been caught stealing from their employers typically had a “positive” or “very positive” attitude towards their employer and said they had good work relationships with colleagues.  However, their negative attitudes included the view that there was poor communication between managers – often putting them in the middle of conflicting direction – and that “managers and supervisors did not always appear to take security seriously.”

 This research echoes findings that Hollinger and Clark made over twenty years ago.  In this current economic cycle, when payroll is more constrained than ever and managers have more on their plate than ever, perhaps the greatest challenge that any loss prevention group could face is how to keep their front-line management teams engaged with their employees and creating an environment that encourages honesty and discourages theft.

Loss Prevention Research Council: Impact Workshop

I had a chance to attend the LPRC’s Fall Workshop hosted at the University of Florida last week.  This is a group of loss prevention professionals, solutions providers, and academics that have come together under Read Haye’s leadership to advance the research agenda for the retail loss prevention industry and help all of us make decisions based on science, not mythology.

The LPRC has already produced several studies and has results from over 350 research projects on their website.  This is the type of effort that I continue to believe needs to be supported by our industry associations such as RILA, NRF, FMI, and others.  If you are interested in finding out more information on the efforts of the LPRC, visit them at http://www.lpresearch.org.

The No-Cost Way to Motivate

 A manager’s genuine interest in employees’ lives pays off at every level, in every job

“One of the greatest causes of misery for employees is the feeling that the person they work for isn’t interested in who they are and what goes on in their lives, personally or professionally. Regardless of how much money people make and whether their jobs suit them, if they feel anonymous they’ll dread going to work—and return home deflated.”

Patick Lencioni has written a nice, straight to the point reminder for all of us about the important role an employee’s first line manager plays in their life.  This is important for us to remember as managers, but also critical for us to remember in how it impacts shortage, safety habits, and engagement in the workplace.  We can design every training and awareness program we can think of, but it all comes to nothing if not supported, reinforced, and breathed into life by our store management teams.  Read the full article here.

National Cargo Theft Task Force

ISO and the National Insurance Crime Bureau (NICB) announced today their intent to create a national information sharing system to combat cargo crime. By networking existing databases and adding secure reporting and analytic functions, the new system will enable more efficient, accurate, and timely sharing of cargo-theft information between theft victims, their insurers, and law enforcement.

Cargo theft is a multibillion-dollar economic drain that exploits existing gaps in the nation’s information-sharing framework. When theft victims are unable to provide timely and accurate information concerning their losses, it hampers law enforcement’s ability to conduct an effective investigation. Aside from the immediate loss of merchandise, cargo theft affects insurers and their policyholders through added costs that are ultimately borne by consumers.  NCTTF

Loss Prevention Hiring: Ramping Up?

Several weeks ago we noted that hiring at the field loss prevention level seems to be ramping up and it looks like this trend is continuing.  Disney, Express, A&F, Dollar General and many others are looking for district, regional, and senior regional loss prevention managers and we are also seeing some postings in Mexico and Canada.  We would expect there to be a flurry of activity between now and the beginning of November when most retailers want to have everyone in place to focus on the holiday season.

New England ORC Conference

Several weeks ago, I had the pleasure of attending the New England ORC Conference sponsored by the retail associations of the various states in the area who have come together in cooperation on this issue.  Congratulations to Kevin Plante from Staples who was responsible for leading the coordination and planning of the conference.  It was a very well-run conference and it is my understanding that it was a record attendance.

During my remarks at the conference, I made the observation that we, as an industry, should feel good about the progress we have made on ORC.  It often seems that we come across as “chicken littles” on this issue when, in fact, we have made substantial ground.  The increased use of technology, information sharing across the industry, and coordinated efforts on legislation are all possible indicators that perhaps we are controlling this issue better than ever before.  Your thoughts?