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29
Dec

Focus on Counterfeit and Pirated Goods

Recent trade talks with the Chinese government have put the issues of counterfeit and pirated goods back in the news.  Last year, China launched a six month campaign focused on enforcement of intellectual property rights but U.S. officials want to establish benchmarks to better measure progress and enforcement.  It seems that much of this attention is focused on technology products but retail products such as handbags, apparel, and DVD’s are still very much part of the mix.  Here is an article from the Business Standard and an article from Market Watch on the trade talks and the underlying issues.

Meanwhile, back in the U.S., several high profile law enforcement raids show the goods have a steady demand from the buying public here.  This article highlights a raid in Las Vegas that netted $350,000 in countfeit goods while this article reports a Los Angeles raid that seized over $4 million in counterfeit goods.

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29
Nov

Economic Crime Goes Up in Recession?

In the October issue of Security Management magazine, there is yet another article, “Corporate Crime in Hard Times,” that tries to tie an increase in business crime to the economic downturn despite decreases in violence and property crime over the same period.  As is the case with most of these types of articles, they rely on whether crime is occurring during the period (e.g. “35 percent of American companies said they had been the victim of at least one significant economic crime from August 2008 through July 2009”) and perceptions of executives (e.g. “..the majority of U.S. executives (53 percent), perceived that the most likely reason for their increased risk of fraud could be attributed to increased pressure during these difficult economic conditions”).

Everytime we go into an economic downturn, I know to expect calls from newspaper reporters and TV producers wanting me to say that there will be more theft from both shoplifters and employees due to increased financial need.  Of course, I refuse because there is no way that we can know whether this occurs since we don’t have measurements to this very issue.  As for theory, there are some research studies that suggest employees are less likely to participate in workplace deviance when it is harder to replace their job such as is the case when unemployment is higher.

Still, the article does make some excellent points about the importance of employee awareness programs and internal hotlines in combating internal fraud.  Also, there are quite a few references to the PriceWaterhouseCooper’s Global Economic Crime Survey.

26
Nov

HR and Surveillance Programs

In reading a recent issue of HR Magazine, I took note of an article on the role of the Human Resource department when it comes to video surveillance programs in the workplace.  This article addresses the employment law ramifications of a video program and the special circumstances of video surveillance in a union environment.  Some states – California, Connecticut, Delaware, and Massachusetts – have requirments to disclose workplace monitoring or risk a potential invasion of privacy action.

The article can be viewed here.  Another resource to check out is the 2007 Electronic Monitoring & Surveillance Survey conducted by the American Management Association.

5
Nov

Criminal Records – CORI Reform in Massachusetts

Masschusetts recently enacted a signficant revision affecting the access, use, and inquiry into an applicant’s criminal history.  A good summary of the act by the law firm Ropes & Gray can be found here and on the official Commonwealth of Massachusetts site which can be found here

Some of the changes include making it unlawful for an employer to ask an applicant about recent felony and misdemeanor convictions as part of the initial written application form.  Additionally, for most felony convictions information will be provided only for the past 10 years and misdemeanor convictions will be reported for five years after final disposition.

There are also new requirements for providing an applicant with a copy of an criminal records information that might be used in an adverse employment decision prior to questioning the applicant concerning it or making an adverse decision on the basis of it.  There are also new requirements to maintain a written CORI policy and to provide applicants with a copy of the policy.

23
Oct

ACFE Fraud Survey – Importance of Training Programs

According to the recent fraud survey conducted by Association of Certified Fraud Examiners (ACFE), the most effective fraud prevention tactics were “non-accounting controls” such as hotlines and training and support programs for both employees and managers.  The human factor also played a significant role in the discover of fraud.  The most common method of catching a fraudster is a tip-off.  In fact, tips expose fraud three times as often as do management reviews, internal audits, and account reconciliations.

For more information, click here.

22
Oct

New Anti-Harassment Provisions in Manitoba, Canada

Manitoba has followed the lead of other Canadian provinces by introducing new measures to protect against psychological harassment in the workplace, labour and immigration minister Jennifer Howard announced Thursday.  Changes to the Workplace, Safety and Health Regulation will add new requirements to protect workers from all forms of harassment, including intimidation, bullying and humiliation.

“Manitoba now joins other provinces such as Ontario, Saskatchewan and Quebec in requiring employers to provide protection from such harassment,” Howard said in a provincial government release. “This builds on other measures that protect workers from harassment based on age, race or gender and ensure that workplaces are respectful and safe for everyone.”

Employers will be required to put in place measures to prevent such harassment and address it if it occurs. The province will help develop and implement policies and educate workers and employers about their responsibilities to ensure a respectful and healthy workplace.  View article from Winnipeg Free Press here.

22
Oct

On-line Fraud and Information Theft

Two recent studies reflect the growing risks of on-line fruad and thefts of information and electronic data.  In this Financial Times article recapping a recent Kroll study, it states that on-line have become bigger problem for global companies than physical property crimes.  And, this recent report at www.internetretailing.net, shows that approximately 1.6% of on-line transactions are fraudlent.

7
Oct

New FCRA Obligations May Impact Employers

Recently, the Federal Trade Commission determined that certain companies, such as reference-checking providers, are consumer reporting agencies under the Fair Credit Reporting Act (FCRA).  As a result, employers that provide payroll and other employee-related information to certain third parties in connection with outsourced services, such as unemployment processing and reference checking, will be considered “furnishers” within the meaning of the FCRA and, therefore, subject to applicable federal and comparable state law regulations.  Federal regulations that impose new responsibilities on employers that provide consumer credit information to consumer reporting agencies took effect on July 1, 2010.

For a good summary of the new regulations, click here.

6
Oct

Why Employees Don’t Speak Up

There is a good post over at the Harvard Business Review blog about some research conducted on why employees don’t speak up in the workplace.  This research doesn’t focus only on whistle-blowing or fraud scenarios but also on innovative ideas, concerns over marketing strategies, or witholding information that could help shape strategy for the organization.  Potential retribution, lack of personal gain from speaking up, or viewing the effort as futile were all cited as reasons for what the authors call “organizational silence.”

If your employees are unwilling to speak up on business ideas, what are the chances they will speak up when faced with a higher stakes issue such as fraud, policy violations, or harassment issues?  Our experience shows us that it is rarely sufficient to simply post a hotline number on a wall or on a business card and expect that employees will automatically call when they see an issue of theft, fraud, or harassment.  The cited research also suggests that simply having an “open door” policy or a suggestion box is not enough to encourage employees’ input.  An organization and its management must actively cultivate and seek out employee input.

Read the blog post here and let us know if we can help your organization improve its communication in both directions.

5
Oct

National Retail Security Survey – 2009

The final report for the 2009 National Retail Security Survey has been published.  As previewed at this year’s NRF Loss Prevention Conference, the shrink results from this report are tied at an all-time low of 1.44% of sales.  Despite the “sky is falling” mentality reflected in many articles and press releases over the past year and a half, retailers are actually seeing a decrease in shrinakge.  This mirrors what I’ve been hearing from loss prevention executives across the retail spectrum and what I predicted in our NRF panel this year the day before Dr. Hollinger released his preliminary report.

The last three years of this report reflect three lowest shrink figures in the eighteen years of this study.  Maybe it is time we start to celebrate some of the success we are seeing in our industry and take some of the credit?  What do you think?

5
Oct

Mandatory Harassment Training Laws

While there are no federal requirements for mandatory training of employees or supervisors on the issue of sexual harassment, many states have enacted or are considering some type of mandatory training.  For instance, California has one of the strictest laws requiring not only new hire training, but also recurring training.  But, don’t assume that California is the exception as Connecticut and Maine also have mandated requirements for private sector companies and states such as Hawaii, Massachussets, Maryland, Ohio, and others “strongly encourage” such training.

If your organization is not conducting this type of training, there is significant risk of increased liability and sanction should a workplace harassment situation should occur.

27
Aug

New Videocast Series – Retail Solutions Online

We’ve recently started a videocast series at www.retailsolutions.com to highlight key factors that affect performance, how organizations sometimes confuse the issue and focus on the wrong thing, and how managers can work to identify key performance levers that will actually result in desired business outcomes.  The first videocast focuses on the difference between “awareness” and “peformance” and can be found here.

25
Aug

EAS Tag Pollution Study

Here is a link to an interesting blog post over at www.retailfraud.com on the results of a recent study on EAS tag pollution.  It is UK based and done by a vendor company, but does seem to ring true to many people’s experience in other parts of the world, as well.

The key call-outs:

  • 57% of shoppers felt embarrassed by false alarms sounding on security tags in their bags.
  • 72% of incidents were in full view of other shoppers.
  • 77% of incidents nothing was said to the shopper when they had their bags checked
  • 28% of case, shoppers were asked to go back into the store to have their bags checked while 26% simply had the tag de-activated and they were allowed on their way.

One difference in the UK is the more pervasive use of security guards at retail exits and, as a result, the majority of these interactions were conducted by security personnel, not retail employees.  You can read the full post here.

22
Jun

UK Survey on Investigative Technology and Capability

I received a note this past week about a  new survey by intelligence and investigation management software solutions specialist, ABM.  The study, ‘ABM Investigation Survey 2010′, surveyed the opinions of 72 investigation professionals from a range of large organisations in the United Kingdom, including retail and consumer product specialists. The objective was to gain a clearer understanding of businesses’ ability to manage investigations by examining what changes have occurred over the last 24 months and their impact on cases.

According to their survey, more than half of businesses surveyed experienced an increase in theft (52%) and fraud (49%) over the last two years. Alarmingly however, investigation personnel numbers have decreased for one in four (25%) organisations, while budgets to investigate and reduce incidents have also diminished for three in ten (29%) organisations. Investigation teams continue to face the challenge to do more with less to help protect the bottom-line. Astonishingly however, despite these pressures, two in five (43%) organisations believe their investigative effectiveness has improved over the last two years.

Some of the findings include how criminal attacks on organisations’ profits increase and how US investigation teams more tech savvy than UK counterparts. The full report can be downloaded here.

21
Jun

Refund Fraud: Finding the Right Policy

Retailers continue to struggle to find the right balance with their return policies where their good customers are not negatively impacted while recognizing the need to deal with fraudulent returns.  At last week’s NRF show, two senior LP executives that I respect gave their views and results. 

Bruce Pyke, DVP of Loss Prevention and Security at Bon-Ton Stores and Ray Cotton, Director of Security Operations at Orchard Supply Hardware, spoke about how their respective companies took the plunge into a return policy change – and how it impacted customers in the process.  A nice summary of their presenation can be found here.

20
Jun

NRF Panel Presentation – Positioning LP for the Economic Recovery

Last Monday, I had the pleasure of moderating a great panel of seasoned Loss Prevention executives at the National Retail Federation Loss Prevention Conference in Atlanta, GA.  Our discussion centered around where their thinking is on how they are positioning their departments for the upcoming year as the economy starts to recover, what they learned from the economic downturn, and what the new reality is from a budget and expense perspective.

Our panelists were Jeff Fulmer from Barnes & Noble, Bob Serenson from Duane Reed, Keith White from The Gap, and Bill Titus from Sears Holding Corp.  In addition, we had years of experience in the audience of approximately 200 professionals and were able to get them involved in asking questions of the panel.  SecurityInfoWatch did a brief recap here and the NRF blogged on this session here.  Thanks go out to the panelists for their willingness to put themselves on the hot spot and share their insights.

20
Jun

RLPM Opening in Houston, TX

Rent-A-Center continues to be hiring and is looking for a RLPM in the Houston, TX market with the following qualifications:

  • Ability to interview, read and write Spanish is required
  • Small box/specialty retail experience preferably in a street or strip center environment
  • Experience with high store count and/or high volume
  • Effective relationship and influencing skills with multiple operations partners
  • Adaptable and effective in a change management environment
  • Enjoys contributing to a young loss prevention program
  • Self starter – comfortable working independently
  • Effective presentation and training skills
  • Proficient time management skills
  • Accomplished investigative skills
  • Wicklander – Zulawski basic, advanced and telephone, CFI preferred
  • Road Warrior, 40% or more travel

 Position is based in Houston, Texas covering 2 states. Interested candidates should apply directly at http://www.raccareers.net/Our_Career/RAC_Corporate.html

2
Jun

Pennsylvania Passes ORC Bill

The Pennsylvania Senate on May 26 passed legislation that would make it a felony to participate, in any capacity, in organized retail crime, a move that represents ongoing effort at the state level to battle ORC, a crime that often crosses state lines.  Read article at Security Director News here.

26
Apr

ECR Europe Seminar – 18 May 2010

The ECR Europe Shrinkage Group has announced an upcoming one-day seminar on “Cooling the Risk of Hot Products.”  This seminar will be held on Tuesday, 18th May 2010, at the Sheraton Hotel at the Brussels Airport, Belgium.  For more information, see the ECR Hot Products Seminar brochure.

7
Apr

Incentives & Disincentives: Will They Affect Performance?

At last year’s RILA Loss Prevention conference in Orlando, I presented a general session where we talked about the various performance “levers” that exist and how they can be used more effectively.  There is a tendency for managers to push on the same one or two levers over and over again, even if they are not the ones that will have the most impact on performance.

In a previous posting (August 31, 2009), we discussed task clarification in some further detail.  In this post, we’ll look at one of the most commonly used performance management techniques – incentives.  We’ll also look at the intertwined issue of disincentives.

Incentives are such a strong part of management history that we have numerous idioms and sayings about them, such as “You can catch more flies with honey than vinegar” and the oft-used “carrot or the stick.”  According to one study, over 75% of American corporations use some type of incentive scheme ranging from stock options to “Employee of the Month” awards to piecework pay for factory workers.  In fact, they are so pervasive that we often take their effectiveness for granted.

As a result, when there is a performance gap in the workplace, we often turn first to the idea of providing incentives – a reward for the desired performance – or disincentives – a punishment if the desired performance is not achieved.  However, there are many “levers” of performance and incentives will only work if the causal issue for the performance gap is related to motivation.

Here are some examples of when incentives will not be effective in changing performance: 

  • The employee does not have the capacity to perform the desired objective
  • The employee does not have the knowledge or skill to perform
  • The employee does not have the needed materials, tools, or resources
  • When other incentives are more important than the one you are offering
  • When disincentives outweigh the incentives offered
  • When the incentives offered are not actually tied to the desired performance
  • When the incentive scheme incorporates too many different performance objectives
  • When the incentive scheme is so complicated that an employee cannot determine the link between their performance and obtainment of the reward

In fact, there is not even universal agreement that incentives actually work in the first place.  Writing in the September-October 1993 issue of Harvard Business Review, author Alfie Kohn, argues that, at best, reward programs produce temporary compliance.    But, when it comes to productivity, he cites over two dozen studies that “have conclusively shown that people who expect to receive a reward for completing a task or for doing that task successfully simply do not perform as well as those who expect no reward at all.”

Additionally, poorly designed incentives can backfire and produce undesired results.  In his book The Only Thing That Matters, Karl Albrecht describes watching an employee at a call center picking up a ringing phone and simply hanging it back up without talking to the caller.  When asked about it, the employee said they were measured and rewarded on answering the phone within 3 rings.

Shortly after starting as the Director of Loss Prevention for a retailer a number of years ago, I inquired about the dramatic drop in check write-off losses for the current year versus the previous year.  What I found is that the previous year’s write-off was the worst in company history and, as a result, the Senior Vice-President of Operations had sent out a memo to all management and all stores that this problem must be addressed and the financial results brought in line.

But, what we also found out was that check tender sales were way down and we were receiving a number of complaints from customers.  It seems that many store management teams, in their effort to address the check write-off issue, were simply refusing to take checks unless they could call the bank to verify funds were available.  At night, customers were sometimes being told, “If you have the money in your account, go to the ATM across the street and get the cash.”

You can imagine the impact these practices had on productivity, customer service, and, ultimately, on sales.  Clearly, these were not the results the Operations head had intended.

Alternatively, Nicole DeHoratius and Ananth Raman published a study in 2007 that showed how changing a store manager’s incentive in a retail setting can affect their attention towards shrinkage and loss prevention.  In the studied retailer, the company changed the emphasis of the store manager compensation plan to increase the weight given towards sales, thus decreasing the emphasis on the prevention of inventory shrinkage.  As most of us might expect, the company saw an increase in both sales and shrinkage.

Clearly, I’m not arguing that there is no place for incentives in the workplace.  Rather, when evaluating how you achieve desired performance, a careful analysis must be done that examines all the factors that influence performance.  Simply dangling a “carrot” or threatening the “stick” in isolation will probably not produce the lasting results you desire.

As always, I welcome your comment, disagreement, and dialogue.

6
Apr

Job Opportunity – Regional Loss Prevention Manager – St. Louis/Kansas City

Rent-A-Center is looking for a Regional Loss Prevention Manager based in St. Louis or Kansas City covering 7 states.  Here is the candidate profile:

  • Small box/specialty retail experience preferably in a street or strip center environment
  • Experience with high store count and/or high volume
  • Effective relationship and influencing skills with multiple operations partners
  • Adaptable and effective in a change management environment
  • Enjoys contributing to a young loss prevention program
  • Self starter – comfortable working independently
  • Effective presentation and training skills
  • Proficient time management skills
  • Accomplished investigative skills
  • Wicklander – Zulawski basic, advanced and telephone, CFI preferred
  • Road Warrior, 50% or more travel

Interested candidates should apply directly at http://www6.rentacenter.com/Employment/RAC-Corporate.html

11
Feb

The Top 5 Mistakes of Privacy Awareness Programs

While this article specifically discusses “Privacy Awareness” programs, the points made are applicable to loss prevention, shrink, and safety campaigns.  In working with companies on training and awareness campaigns, we have come into organizations and found they were previously falling into many of these traps.  We especially think that problems #2 and #3 on this list are worth considering:

  • #2 – Equating “campaign” with “program”
  • #3 – Equating “awareness” with “training”

For a training & awareness campaign to be successful and produce results, it has to be well thought out and not simply a checkbox that is ticked off.  You can read the full article here.

10
Feb

Learning How to Manage Aggression

We received a press release from the folks over at the Center for Aggression Management, a third-party vendor who specializes in workplace violence, bullying, etc.  While we don’t have any personal experience with this group, they have an interesting blog at http://blog.aggressionmanagement.com/.

9
Feb

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.

3
Feb

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.