March - April 2012

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THE VOICE OF LOSS PREVENTION LPportal.com | V11.2 March – April 2012

LOSS PREVENTION

MAGAZINE

To Stop OR NOT TO STOP

IS THIS STILL A QUESTION? DATA-DRIVEN RESULTS AT RITE AID 100 YEARS OF INNOVATION AT WEIS MARKETS PUBLIC-PRIVATE PARTNERSHIPS AND COMMUNITY POLICING


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Contents

17

6 PUBLISHER’S LETTER Trade Show Season Begins By Jack Trlica

To Stop Or Not to Stop. Is This Still a Question?

8 ON THE WEB 10 RETAIL SPONSORS

The continuing debate on shoplifter apprehensions

12 LOOKING BACK Ten Years of LP Magazine

By Johnny Custer, LPC, CFI Merchant Analytic Solutions

14 INTERVIEWING Misconceptions about Eye Movements: Part 2 By David E. Zulawski, CFI, CFE and Shane G. Sturman, CFI, CPP

31 Data-Driven Results at Rite Aid Delivered with Leadership, Hunger, and Passion

28 ACADEMIC VIEWPOINT New Findings in Employee-Theft Research By Richard C. Hollinger, Ph.D. 42 Outstanding Mentors in Loss Prevention

Interview with Bob Oberosler

By James Lee, Executive Editor

44 CERTIFICATION We Have Some Catching Up to Do By Don Provost, LPC 56 EVIDENCE-BASED LP A Huge Collaborative Effort By Read Hayes, Ph.D., CPP

47 100 Years of Innovation

58 Leadership What Is Your Leadership Brew? By Krista Osborne, CPP

Profile of Weis Markets

By Adam Paul, Contributing Writer

68 INDUSTRY NEWS Demonstrators Block Entrance to [Enter Your Store Name Here] By Robert L. DiLonardo

59

70 PEOPLE ON THE MOVE

How Public-Private Partnerships Are Changing Community Policing

72 ADVERTISER DIRECTORY 73 VENDOR SPONSORS 74 PARTING WORDS Mentors, Vendors, and Friends By Jim Lee

An award-winning retail-police association

By Chief Raymond Schultz and Karen Fischer, Albuquerque Police Department

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Publisher’s LETTER MAGAZINE

Trade Show Season Begins

700 Matthews Mint Hill Rd, Ste C Matthews, NC 28105 704-365-5226 office, 704-365-1026 fax EDITOR AND PUBLISHER Jack Trlica JackT@LPportal.com

T

his is the beginning of trade show season for the LP industry. Rhett Asher and the FMI team kicked off the year with their asset protection conference in early March in New Orleans. If I’m not mistaken, this is the first time an LP industry event has returned to New Orleans post-Katrina since the March 2005 RILA LP conference. One of the interesting aspects of the FMI event was it took place at the Hyatt Regency hotel complex that had only just reopened in October…six years after Hurricane Katrina. Given that risk management is part of the FMI agenda, hosting the event at the Hyatt Regency was more than appropriate because the hotel played a significant role in the days and weeks following the hurricane. Disaster planning and business recovery were the subjects of several talks, but none more gripping than the general session presented by Ed Minyard, who was on the ground in New Orleans just three days after the hurricane with a technical team and portable satellite equipment. His team helped set up communications and an emergency operations center in the shattered Hyatt for the city-led first responders. Minyard’s anecdotes and photos provided a chilling context to a discussion of crisis management. His experience in New Orleans as well as with Hurricanes Gustav and Ike in 2008, the H1N1 outbreak in Mexico in 2009, the Haiti earthquake in 2010, and the BP oil spill in 2010 taught him many lessons related to disaster planning. Minyard shared many of his lessons learned with the FMI attendees. The bottom line, especially with hurricane season approaching, is every organization should dust off their crisis plan, run exercises with the crisis team, and communicate plans and procedures with employees. In addition, every individual should have a family emergency plan as well. Over the years, we’ve published quite a few articles on the subject. Search “crisis management” on our website for articles, including Minyard’s cover feature “John Wayne Society—Preparedness or Paranoia?” in the July-August 2008 issue. Speaking of trade shows, it may also be a good time to review expectations and ethics guidelines with those in your organization who attend industry events. One of the principle benefits of conferences is networking with others. However, when you mix alcohol, late nights, and attractions like Bourbon Street, networking can become less than professional. You don’t want anyone in your organization to end up in an “LP Gone Wild”-type video on YouTube or worse. I don’t mean to sound like a prude. I’m the first to admit I enjoy sharing a cocktail or glass of wine with my industry friends. However, it seems like every year there are a few instances of conference participants…let’s just say…embarrassing themselves, which not only reflects badly on their professionalism, but their company as well. If I didn’t see you at FMI, I hope to see you at IOBSE in Chicago, RILA in Dallas, NRF in New Orleans, NFSSC in Baltimore, ASIS in Philadelphia, RCC in Toronto, RETECH in Fort Lauderdale, and LPRC in Gainesville. Check the calendar in the Community section of the magazine website for details on these and other industry events.

If I didn’t see you at FMI, I hope to see you at IOBSE in Chicago, RILA in Dallas, NRF in New Orleans, NFSSC in Baltimore, ASIS in Philadelphia, RCC in Toronto, RETECH in Fort Lauderdale, and LPRC in Gainesville.

Jack Trlica Editor and Publisher

6

LossPrevention and LP Magazine are service marks owned by the publishers and their use is restricted. All editorial content is copyrighted. No article may be reproduced by any means without expressed, written permission from the publisher. Reprints or PDF versions of articles are available by contacting the publisher. Statements of fact or opinion are the responsibility of the authors and do not necessarily represent the opinion of the publishers. Advertising in the publication does not imply endorsement by the publishers. The editor reserves the right to accept or reject any article or advertisement.

March - April 2012

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EXECUTIVE EDITOR James Lee JimL@LPportal.com CONTRIBUTING EDITORS Robert L. DiLonardo Walter E. Palmer, CFI, CPP, CFE Amber Virgillo CONTRIBUTORS William A. Alford, CFE Read Hayes, Ph.D., CPP Richard C. Hollinger, Ph.D. Mike Marquis, CFI Gene Smith Shane G. Sturman, CFI, CPP Kelby Woodard David E. Zulawski, CFI, CFE NEWSLETTER EDITOR John Selevitch JohnS@LPportal.com ONLINE EDITOR Matt Richardson MattR@LPportal.com CREATIVE DIRECTOR Larry Preslar PROOFREADER Amy Trainor DESIGN & PRODUCTION SPARK Publications info@SPARKpublications.com 704-844-6080 ADVERTISING

ADVERTISING MANAGER Bonnie Dodson 828-479-7472 office, 704-943-5797 fax BonnieD@LPportal.com WEST COAST REPRESENTATIVE Ben Skidmore 972-587-9064 office, 972-692-8138 fax BenS@LPportal.com SUBSCRIPTION SERVICES

CIRCULATION MANAGER Matt Richardson MattR@LPportal.com NEW OR CHANGE OF ADDRESS www.myLPmag.com POSTMASTER Send change of address forms to Loss Prevention Magazine P.O. Box 1088 Lowell, MA 01853 LossPrevention aka LP Magazine (USPS 000-710) is published bimonthly by Loss Prevention Magazine, Inc., 700 Matthews Mint Hill Rd, Ste C, Matthews, NC 28105. Print subscriptions are available free to qualified loss prevention and associated professionals in the U.S. and Canada at www.myLPmag.com. The publisher reserves the right to determine qualification standards. International print subscriptions are available for $99 per year payable in U.S. funds at www.LPportal.com. For questions about subscriptions, contact circulation@LPportal.com. Periodicals postage paid at Matthews, NC, and additional mailing offices.

© 2012 Loss Prevention Magazine, Inc.


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ON THE WEB

Editorial Board

Columns

There are a number of articles on the magazine website you may have missed. Check out the following articles. New Orleans Hosts FMI Asset Protection Conference By Jack Trlica A Lesson in Success...ion By Kevin McMenimen, LPC Thou Shalt Not Steal (Unless It Is Under Fifty Bucks) By Herman O. Laskey Jr., CFI, LPQ Think Before You Profile Customers By Rick Pfeifer, LPC Should Shrink Define LP’s Value? By Charles “Buddy” Grimmett, LPC

Weekly e-Newsletter

Get the latest news and features you need every Thursday. ■ C urrent loss prevention, retail, and technology news, ■ O riginal content from magazine staff and contributors, ■ P eople on the move listings, ■ H elpful links, and ■ A little fun to brighten your week. If you are not receiving our e-newsletter, visit the magazine home page at www.LPportal.com and click on the links under CURRENT NEWSLETTER to read the latest issue or to sign up. If you would like to contribute to the newsletter or have any comments, contact us at newsletter@ LPportal.com.

Ken Amos Divisional Vice President, Loss Prevention Walgreens

Bob MacLea Senior Vice President, Loss Prevention, TJX

Leo Anguiano Vice President, Chief Risk Officer, Central Parking Corp.

Chris McDonald Senior Director, Loss Prevention, Dollar General

Jim Carr, CFI Director, International Loss Prevention, Rent-A-Center

Randy Meadows Senior Vice President, Loss Prevention, Kohl’s

Ken Cornish Vice President, Retail Operations, The Kroger Co.

Monica Mullins Vice President, Asset Protection & Safety, Wal-Mart Stores U.S.

Francis D’Addario Emeritus Faculty Member, Strategic Influence and Innovation Security Executive Council

Tom Roan Group Vice President, Loss Prevention, Macy’s

Charles Delgado Vice President, Manager of Asset Protection BJ’s Wholesale Club

Tim Shipman Director, Corporate Investigations and Crisis Management, Food Lion

Patti Felz Vice President, Loss Prevention, Polo Ralph Lauren

Mark Stinde Vice President, Asset Protection 7-Eleven

Barry Grant Senior Vice President, Operations & Loss Prevention, CPI Corp

Paul Stone Vice President, Loss Prevention and Risk Management, Best Buy

Bill Heine Senior Director, Global Security, Brinker International

New Digital Magazine Format

Optimized for iPads and Tablet PCs Offers easier navigation, higher resolution, and more functions: ■ S ave PDFs of articles ■ P rint or email pages ■ S hare pages directly to social networks ■ F ast keyword search ■ H ot links to outside content and advertiser offers

Frank Johns Chairman, The Loss Prevention Foundation Gary Johnson Vice President, Loss Prevention, Vitamin Shoppe Paul Jones Senior Director, Global Asset Protection, eBay Mike Lamb Vice President, Asset Protection, The Home Depot

Bookmark the new digital magazine at digital.lpportal.com Ten years of archives available at digital.losspreventionmagazine.com

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Bill Titus Vice President, Loss Prevention, Sears Holdings Bill Turner Senior Director, Retail Operations, Cole Haan Claude Verville Vice President, Loss Prevention, Safety & Hazmat, Lowe's Stanley E. Welch Vice President, Director of Loss Prevention, JCPenney Keith White Senior Vice President, Loss Prevention and Corporate Admin., Gap Inc.


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Join these great companies as an LP Magazine corporate sponsor. Email JackT@LPportal.com for more information. LP Magazine | March - April 2012

11


LOOKING Back BACK on ON 10 Years YEARS of OF LP Magazine MAGAZINE Looking

Mall security is not a replacement for retail loss prevention programs. Mall security and LP have supporting missions, but they’re different missions.

“The value we get from POS exception reporting is awareness. When we kicked it off, and even to this day, we still focus on the proactive side and emphasize that this is a tool to make the company profitable. It’s not a ‘gotcha’ tool.” – Tim Bartkowiak, Spartan Stores

When tasked with the prospect of closing a sizeable portion of a company’s retail locations, leadership and communication become the cornerstones of a successful liquidation.

“My best advice for anyone who is looking to redefine his or her career or looking for a place to get started again is to go to a company that is committed to your function, whether that function is loss prevention, risk management, or safety.” – Marvin Ellison, Home Depot

January-February

March-April

January – February 2009

2009

May – June 2009

LPportal.com

V8.1

LPportal.com

V8.3

V8.2

MALL SECURITY AND LP

Influencing Global Security One Community at a Time

Communication Is the Watchword

LP STRATEGIES FOR CLOSING STORES ON-LINE FRAUD PREVENTION AT URBAN OUTFITTERS INTERVIEW WITH HOME DEPOT’S MARVIN ELLISON TECHNOLOGY MAKES DOING MORE WITH LESS EASIER

CREDIT CARD SKIMMING | SPARTAN STORES’ TIM BARTKOWIAK ETHICS IN VIOLATILE TIMES | 2009 LP RESOURCE GUIDE LPM 0209-fin1.indd 1

Macy’s cuts 7,000 jobs.

Influencing Global Security One Community at a Time by Francis D’Addario Interview with Tim Bartkowiak, Spartan Stores Ethics in Volatile Times by Tom Matthews Credit Card Skimming by Catherine Penizotto 2008 Loss Prevention Resource Guide

March - April 2012

STARTING LP AT OAKLEY RETAIL STORES LP SUMMIT IN THE QUEEN CITY THE UNEMPLOYED CONTINGENCY PLAN

LPM 0409-15.indd 1

1/18/09 9:07 PM

US Airways plane lands in Hudson River.

12

May-June

March – April 2009

LPportal.com

NOT A MOMENT TO LOSE

When I’m asked by a senior executive of a company, “How can we afford to implement an ethics program now in these turbulent times,” my response is “How can you not afford to do so?”

With the right attitude you can turn what may seem like the worst thing that’s ever happened to you into the best thing that’s ever happened to you.

3/7/09 10:15 PM

Bernard Madoff pleads guilty.

Mall Security and LP by Liz Martinez Interview with Home Depot’s Marvin Ellison Winning the Battle against On-line Payment Fraud by Scott Richard Technology Makes Doing More with Less Easier by Lee Pernice

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LPM 0609-9.indd 1

5/25/09 9:28 PM

Chrysler files bankruptcy.

LP Strategies for Closing Stores by Donald Horan Loss Prevention Summit in the Queen City by James Lee Starting LP for a Hot Brand at Oakley Retail Stores by Michael Stugrin The Unemployed Contingency Plan by Jason Jakus


2008 2009

“Certification communicates to our peers inside retail as well as to those outside retail that loss prevention is indeed a profession that takes pride in our knowledge and contribution to the success of the retail industry.” – Gene Smith, The Loss Prevention Foundation

July-August

If investors view companies with strong asset protection or loss prevention programs as more secure and better monitored, with enhanced checks and balances, then we increase the business value.

September-October

July – August 2009

“When we started working on ORC, we recognized that we are not going to catch or stop all of these guys. We wanted to deter them. One way to do that has been to sensitize law enforcement and work through the legislatures to toughen the criminal penalties for those activities.” – Chet Young, Walgreens

November-December

September – October 2009

LPportal.com

November – December 2009

LPportal.com

V8.4

LPportal.com

V8.5

V8.6

EAS

MANAGING E-COMMERCE RISK

According to the National Center for Injury Prevention and Control, domestic violence costs businesses approximately $6 billion annually in healthcare costs, lost productivity, and missed work time.

A key part of getting to grips with shrinkage is to understand the importance of identifying the genuine root causes and not merely the symptoms of the problem, in particular the operational failures that create the opportunities would-be offenders then exploit.

MERCHANDISE-PROTECTION STRATEGY

in an Interconnected Global Economy

What Is the Right Choice for Your Stores?

DEFINING OUR INDUSTRY A Business Topography

CONSTRUCTING A FOUNDATION FOR THE LP PROFESSION TAKING A C.L.E.A.R. APPROACH TO GREATER SUCCESS AGAINST RETAIL CRIME CASE PREPARATION—THE KEY TO SUCCESSFUL PROSECUTIONS

LPM 0809-Final1.indd 1

Michael Jackson dies.

ASSESSING THE RISK OF WORKPLACE VIOLENCE TO YOUR BUSINESS INTERVIEW WITH WALGREENS’ CHET YOUNG NOT EVERYONE GETS A TROPHY—HOW TO MANAGE GENERATION Y 7/12/09 9:01 PM

LPM 1009-fin1.indd 1

General Motors files bankruptcy.

Defining Our Industry— A Business Topography by Suni Shamapande Interview with The Loss Prevention Foundation’s Gene Smith Taking a C.L.E.A.R. Approach to Greater Success against Retail Crime by Michael Stugrin Case Preparation— The Key to Successful Prosecutions by Ryan Gausman

INTERVIEW WITH JOAN MANSON, THE CONTAINER STORE BREAKING THE SHRINKAGE LIFE CYCLE—DEVELOPING NEW LOSS PREVENTION COLLABORATION AND WORKING AS AN EFFECTIVE TEAM 9/8/09 6:23 PM

LPM 1209-10.indd 1

Unemployment breaks 10%.

Managing e-Commerce Risk in an Interconnected Global Economy by Tom Ridge Interview with Chet Young, Walgreens Assessing the Workplace Violence Risk to Your Business by Barry Nixon How to Manage Generation Y by Bruce Tulgan

11/3/09 11:55 PM

Healthcare reform bill passes.

EAS—What Is the Right Choice for Your Stores? by Ryan Smith Interview with The Container Store’s Joan Manson Breaking the Shrinkage Life Cycle by Adrian Beck and Colin Peacock Collaboration and Working as an Effective Team by Don Reinhart and Madelynn Herman

LP Magazine | March - April 2012

“I believe women bring a lot to the table in the retail workplace, including LP. We’re known for our strength, for being great communicators, and for providing that exceptional communication with compassion.” – Joan Manson, The Container Store

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interviewing

Misconceptions about Eye Movements: Part 2 I

n our last column we began a discussion of eye movements and their relationship to memory and creation of information. Memory is still very much a mystery, and many researchers consider it a process where bits and pieces from the mind and body help recreate the event in the mind. For years researchers believed that all memories were held within the brain. Later it became apparent that memories could be triggered using any of the senses and the central nervous system (Gazzaniga 1988). Surprisingly, memories can even be stored in the muscle tissue to protect the brain from intensely painful memories. This apparently protects the mind from the depth of the emotional trauma. This phenomenon may be why transplant recipients report craving certain foods that they never liked previously. There are some experiences that are easily recovered from our memory while others, the more mundane, are more difficult to retrieve from the mind. It seems that the more senses engaged during the memories construction, the easier it will be for an individual to recall the event. Those memories that have greater intensity also are more easily retrieved. Unique and emotional events increase the likelihood of a strong memory being created.

Memory and Theft

Highly emotional events and those relating to survival will be remembered more easily than everyday events. Consider the mental state of an individual who is about to steal. Their survival instinct triggers emotional, psychological, and even financial impacts on the mind and body as they commit the theft. Imagine what it must be like to be asked about a theft and have those emotional and psychological memories flood back into consciousness. Reliving the memory and the survival instinct requires time, and thus an observable delay by the individual. Sometimes it requires an individual to use gestures or eye movements to help locate memories. In one research study participants were asked to watch a video and then tell the researchers about the stories content and flow. Then the participants had their arms restrained during the observation of the video. In the second observation it was difficult for the participants to remember parts of the story. It seems that the inability to use the hands and arms concealed some of the memories of the recently observed video. The deceptive subject needs time to sort out the real memory and then construct a logical alternative that will not contradict any story he

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by David E. Zulawski, CFI, CFE and Shane G. Sturman, CFI, CPP

Zulawski and Sturman are executives in the investigative and training firm of Wicklander-Zulawski & Associates (www.w-z.com). Zulawski is a senior partner and Sturman is president. Sturman is also a member of ASIS International’s Retail Loss Prevention Council. They can be reached at 800-222-7789 or via email at dzulawski@w-z.com and ssturman@w-z.com. © 2012 Wicklander-Zulawski & Associates, Inc.

had previously told. Most people will communicate using three of the five senses—visual, auditory, and feelings. An individual’s communication using visuals requires the construction or retrieval of the mental picture and spatial awareness of the memory. When constructing a lie, visually there will be less detail and contradictions of spatial placements. However, a true visual memory will have details, colors, spatial arrangement, and point of view as part of the recall. If you have to construct a mental image of a room from scratch, imagine the complexities of this mental task.

Eye Movement Cues

An interviewer should track an individual’s eye movements during the early stages of the conversation while going through biographical questions and development of rapport to establish where the eyes go during creation and recall. In a study we conducted with over 500 people we found that 71 percent of the participants looked to their left when recalling, 21 percent looked to their right, 5 percent had no identifiable norm, and 3 percent unfocused their eyes during recall. About 7 to 12 percent of the population is left-handed. In our study 9 percent of the people were left-handed and 76 percent of the left-handers looked to their left when recalling information. What kinds of questions might be useful to establish the recall or creative eye accessing cues? Clearly, any questions used by an interviewer to establish the pattern of eye movement needs to make sense in the context of the interview. Asking a subject what the offspring of a zebra would look like would require creation of the new creature, but there would be almost no context where this question would be appropriate. Asking relevant questions that mask the interviewer’s purpose can create an important behavioral reaction that, when placed in the context of testing a story, can determine whether the individual is recalling or creating information. The following are some examples of questions that would require an individual to recall information: Who were the first three people you saw when you arrived at work this morning? What is your date of hire? What is a major intersection near your home? Once you have established the dominant side of the brain for recall, you will have already established the creative side as being the opposite.

Developing Admissions

So, how might we use our knowledge of recall and creation during an interview to develop admissions? continued on page 16

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continued from page 14

First, we have to understand the context of the question and whether or not it makes sense for an individual to create an answer or simply recall it. If a person was asked to list three things that would make him more effective at his job and his eyes go to recall, we could surmise that the question had been asked of him before or he had prepared the answer in advance. For most people we would expect them to have to create a response. As the questions moved to a discussion about a story, alibi, or development of an admission, our observations make it easier to determine if a response should be created or recalled. For example, a young woman was questioned by one of the authors regarding the theft of loose diamonds. During the biographical questioning, it was determined that she recalled by looking to her left. Her responses during the interview indicated she was unlikely to have been involved in the theft, but the company felt she may have been using illicit drugs on the job. The questioning moved from the diamonds to experimentation with drugs and resulted in the following dialog: INTERVIEWER: What types of drugs have you ever just experimented with? SUBJECT: [looks to her left—recall] Well, ah…I have tried meth a couple times, coke once or twice, and, of course, marijuana. INTERVIEWER: When was the last time you used any of those during working hours? SUBJECT: [looks to her right—creation] Ah…about six months ago. INTERVIEWER: And what was it that you used? SUBJECT: [looks to her left—recall] Marijuana.

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INTERVIEWER: I meant when was the very last time you used marijuana on the job? SUBJECT: [looks to her right—creation] INTERVIEWER: I mean the very last time. SUBJECT: [looks to her right—creation] INTERVIEWER: I mean the very last time. SUBJECT: [looks to her left—recall] Just before I came in. The subject’s eye movements during this exchange helped in gaining an admission. Since marijuana was recalled and spontaneously said, it was likely a truthful response, but the timeframe for its use was created. In this case the six-month admission was a lie of minimization, which left additional development to be done. When the employee was asked again when the last time she used drugs during working hours, her eyes went to creation, which was likely to be another minimization. By stopping her from answering the question with another lie, it increased her belief that the interviewer must know the last time she used marijuana on the job. Creation is not always a deception, and recall is not always the truth, but if one examines the context of the question, it can help sort out potential deceptions. This technique becomes less valuable in situations where the stories or alibis have been told multiple times. When a lie is created, it is simply moved to a memory and then is retrieved in the same way as something that was experienced. However, created lies almost always do not have the same level of detail, colors, emotions, or spatial awareness as a real memory. As the interviewer drills down into the details, it will require the liar to create information to fill in the gaps.

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Cover feature

To Stop

Or Not

to Stop Is This Still a Question? By Johnny Custer, LPC, CFI


TO STOP OR NOT TO STOP

A

m I sure that he is attempting to steal this A merchandise? “Yes, I am sure.” ■ Is there any possibility that the merchandise could have been paid for by the suspect or anyone else? “No.” ■ Can I handle this apprehension on my own? “He looks pretty manageable. I’ve dealt with bigger and scarier suspects, and come out okay.” ■ Could he have a gun on him? “Oh, good question. It is a pretty big coat, but I’ve been doing this a long time and have never seen a gun.” ■ What about a knife? “Nah, I’ve got this.” ■ Needle in his pocket? “Okay, enough with the questions and second guessing. Today is the day for this guy!” You decide that your pre-stop requirements have been met and cautiously follow the suspect out to the sidewalk in front of the store. You approach him and say: “Good afternoon, sir. I am an LP agent with this store, and I need to speak with you privately back in store please.” What happens now? How have you presented yourself? Did you run up and grab his shoulder? Did you walk past him to approach him from the front? Were you professional, yet firm? Were you nervous and unsure, or perhaps a bit aggressive and confrontational? Does the suspect run? Does he swing at you? Is there an argument or confrontation at the front of the store? Does the subject return to the LP office willingly? Does he produce unpaid merchandise when asked? The safety of the LP agent, customers, and the shoplifter, as well as thousands or even millions of dollars in potential litigation, are all at risk and dependent upon the answers to these questions during an apprehension scenario. If any portion of this scenario is handled incorrectly, even just slightly, the results could be inconvenient, expensive, or even tragic. Even if everything was handled correctly, is it worth the risks?

male shoplifting suspect has been coming into store 153 three times a week for as long as anybody can remember. Store management has even attributed this guy as a major cause of the store’s shrink woes that have put them on the corporation’s “target store” list for the last two inventory cycles. As the store’s LP agent, you have tried to stop him in the past, but it seems like you have always been just one step behind him and unable to make an apprehension. “Today is going to be different,” you say to yourself. You can feel it. Today he is finally going to get what’s coming to him, and, more importantly, your apprehension dry spell is going to end. No more excuses needed for the boss. Today you are going to be stopping the guy that nobody else has been able to get. You have spent the last ten minutes following the suspect through the store, tracking him carefully from the moment he entered. You have observed him approach, select, and conceal multiple computer accessories that you estimate to be worth over $200. “Just maintain constant surveillance.” You never lose sight of him. He definitely still has the merchandise as he passes all of the open and operating registers, failing to declare the merchandise in his coat. “He’s heading for the door...”

Decision Time

At this point most seasoned loss prevention agents (LPA) begin to experience a rush of adrenaline and a constant stream of internal dialogue:

Worth the Risk?

Anyone who has worked in the LP industry for more than ten years has probably seen some significant changes in processes and technology. We have seen evolutions from analog “still” cameras to digital PTZs, from dusty VCRs to DVRs with remote access, and from padlocks to RFID. In addition, some exception-based reporting programs have evolved into enterprise-wide data-mining systems that are helping to diagnose shrink issues throughout the store.

■ Even if the approach and confrontation by the

LPA is “textbook” and professional, any of these variables could result in a “simple” apprehension escalating to something much more serious. For example, the subject could have an active arrest warrant, could be in possession or under the influence of a foreign substance, or could be experiencing a feeling of desperation with nothing to lose. ■ 18

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TO STOP OR NOT TO STOP But there has been one aspect of the industry that has not evolved over the years. One process that remains essentially unchanged over the years is the shoplifting apprehension. Regardless of the new technology or technique used to get to the point of detention, once LP agents get outside the store and are face to face with the suspect, the process is just about the same as it has always been. They are unarmed, unequipped, and often alone. Their job then requires them to confront an unknown suspect about a crime that has just been committed. These facts have remained the same since the first shoplifter was detained many decades ago. For years we have hired entry-level LP professionals and, in most cases, provided them with rigorous training dedicated to the apprehension of external-theft candidates. We have embedded in their heads the necessity to ensure that they observe some form of the following steps prior to making an apprehension: 1. Approach 2. Selection 3. Concealment 4. Constant surveillance 5. Passing all points of sale 6. Exiting (in most companies) We have gone to great lengths to warn the trainee about the danger of the non-productive detainment (bad stop) and the potential for dangers that can occur when engaging physically with a suspect.

But there is a push for results. A constant pressure upon LP agents every time they speak with their supervisor, send in weekly productivity reports, talk with their competitive peers, or even when talking with the associates that work in the store—“Say, when are you going to catch that guy that keeps stealing all of our Xbox games?” So emphasized is the need for productivity that many companies base LPA reviews and performance metrics, if not entirely, at least in part, on apprehension statistics. Raises, promotions, and even continued employment are often contingent upon agents’ ability to produce stops. The typical metric of performance assessment involves “quota” demands, though that term is often avoided strongly. Instead, a more politically correct description is used—hours per apprehension (HPA), that is, hours worked divided by number of apprehensions made during the week, month, or year. Many companies go so far as to mention specific “goal” numbers, which are usually around 17 or 18, meaning one apprehension for every 17 or 18 hours worked. So, rather than using the actual LP program report card—the shrink number—most store-level LP teams, as well as many LP field managers, are judged by their “body count.” Could this constant feeling of pressure lead to mistakes or poor decision making? Could this pressure also lead to the LPA displaying increased anxiety, excitement, or adrenaline-fueled behavior during the apprehension process?

TM

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TO STOP OR NOT TO STOP

■ Regardless of the new technology or

technique used to get to the point of detention, once the LPA gets outside the store and is face to face with the suspect, the process is just about the same as it has always been. They are unarmed, unequipped, and often alone. Their job then requires them to confront an unknown suspect about a crime that has just been committed. These facts have remained the same since the first shoplifter was detained many, many years ago. ■ “Yes,” says Jason Scheel, LPQ, director at Compass Loss Prevention. “I have seen the unfortunate side effects of some LP agents feeling too much pressure to make apprehensions, resulting in non-apprehension approaches [bad stops] or fights. I still see too many of them, or at least more than I’d like to see.”

ecember 23, 2011, New Hartford, NY—Macy’s LP D officer is injured by a fleeing vehicle while attempting to apprehend four adult female shoplifting suspects. The dollar amount of stolen merchandise was not released. ■ December 12, 2011, Longview, WA—LP agent from Fred Meyer has his ear partially severed while attempting to apprehend a shoplifting suspect. The suspect allegedly attacked the agent with a hatchet that he had carried into the store with him. The exact dollar amount of the case has not been released, but multiple news organizations identified the items taken as a “Marilyn Manson CD, a bike inner-tube, bike lock, and a quart of oil.” ■ November 16, 2011, Knoxville, TN—Police officers responding to a shoplifting incident are forced to gun down the suspect after he threatened them with a handgun. The suspect was initially approached by store LP agents over the suspected theft of several light bulbs. A Google search using the key words “shoplifter” and “box cutter” yielded results on at least twelve separate incidents in the last six months. In all examples a box cutter was either brandished, or actually used, to inflict harm upon individuals attempting to apprehend shoplifting suspects. ■

Apprehensions Turning Violent

Aside from mistakes by the LPA that lead to a conflict with a shoplifting suspect, there may also be many unknown variables pertaining to the suspect in play. Even if the approach and confrontation by the LPA is “textbook” and professional, any of these variables could result in a “simple” apprehension escalating to something much more serious. For example, the subject could have an active arrest warrant, could be in possession or under the influence of a foreign substance, or could be experiencing a feeling of desperation with nothing to lose. A significant number of the LP professionals interviewed for this article believe that violence in apprehensions for whatever reason is increasing, leading to more injuries and even deaths of, not only, LP personnel, but customers and shoplifters as well. “I believe that shoplifting suspects have become more violent over the last five years or so,” remarks Staci Ferguson, LP supervisor with Kohl’s Department Store. “I think that the economy probably has a lot to do with it. People are desperate, they will do desperate things.” Point in fact, the National Retail Federation recently released results of a survey of their members that included the statistic that shoplifting incidents turn violent 13 percent of the time. Here are a few examples of apprehension related violence from the last few months. ■ March 8, 2012, Woodbridge, NJ—A shoplifting suspect confronted by police leaving a Sears store pulls a knife and takes a hostage inside a Hollister store. The police shoot and kill the suspect. ■ January 21, 2012, Salem, MA—CVS/pharmacy store manager is injured after being kneed “repeatedly” in the groin area while attempting to apprehend a shoplifting suspect. The stolen merchandise was valued at around $200.

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Changing Times

Senior loss prevention professionals have lived through changing times. “If you stay in this career long enough, you are going to have a violent encounter,” says Brian Harless, a LP supervisor with a major discount retailer, “but the difference between when I first started and now? Take the weapons, for example. When I first worked in LP in the 1990s, there was maybe a handful of knives that we would take off shoplifters. Now, however, I have a small shoe box full.” Many LP departments have been forced to drastically cut payroll with the economic downturn in the past several years. This may be a contributing factor to apprehension-related violence. In many retailers, departmental cuts have led to only |

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TO STOP OR NOT TO STOP one LP agent working at a time. It has also reduced options for the LPA in acquiring help from the store teams. One former LP manager for a big-box retailer explains it this way: “I remember when I first started in LP, I had about 448 hours of coverage per week for each of our superstores. The team was making apprehensions with three people outside and one in the camera room. It was rare that someone would run, and even rarer for them to fight. Now it’s a different story. The teams are running at 80 to 100 hours per week, and people are making stops on their own. We started the whole ‘no-contact’ thing a few years back, and it seems to be helping a bit. But it’s still a scary thing to be out there by yourself.” Being alone, the “scary” feelings, the rush of adrenaline… all of those factors contribute to poor decision making and potentially disregarding no-contact or non-apprehension policies. Consider the scenario presented at the beginning of this article. The LP agent actually watches a crime unfold, and then approaches the suspect alone immediately after the fact, when the suspect’s emotions and adrenaline are probably running at their highest. Anyone with any foresight would probably agree that this is creating a situation fraught with potential disaster. Even police officers do not typically have the opportunity to see a crime through from occurrence to detainment, at least not with the same frequency that LP agents do. Police officers typically arrive after the crime has taken place and are well-quipped with batons, handcuffs, pepper-spray, actual arrest powers, side arms, and plenty of backup. The

LPA intervenes during the crime and often has nothing more than a walkie-talkie or mobile phone for backup.

Value of Apprehensions

Now look at some of the real incidents mentioned above from the last few months. Consider the merchandise that is listed. Was any of the merchandise worth the results that occurred? Is there any amount that is worth similar consequences? My answer is an emphatic “No!” Traditionally, loss prevention programs were built on the foundation of shoplifter apprehension. This function was leveraged as one of shrink reduction, not one of crime prevention or punishment. It is the very job function that led to our industry’s creation. In an earlier time when we didn’t have strong operational knowledge, data analysis, or predictive modeling capabilities, spending our time and resources on this function may have made sense. But does it make sense now? Does stopping shoplifters have the kind of impact on shrink that we once thought? Again, the answer is “No.” The impact of shoplifting and the apprehension of offenders on shrink is still an open question and often a topic of heated discussion. Ask twenty different members of the LP industry what percentage of their shrink issues can be attributed to shoplifting, and you will likely get twenty very different answers. In a recent poll more than 70 percent of participants placed shoplifting at less than a quarter of their yearly shrink. Most

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LP Magazine | March - April 2012

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TO STOP OR NOT TO STOP

■ The impact of shoplifting and the

of these professionals agree that shoplifting concerns vary with different retail models, but that regardless, the actual impact is a small fraction of yearly shrink when compared to other causes. Add to this that we are probably only actually apprehending a small fraction of that small fraction, and questions can be raised about the necessity to focus on shoplifting at all. “I would actually like for one of the LP industry leadership groups to release a report on the actual impact that shoplifter catching does not have on shrink,” says Brian Frasier, CFE, CFI, field LP manager at Office Depot. “I think the results would surprise a lot of people.” According to the Jack L. Hayes 2011 Annual Retail Theft Survey, participating retailers show a figure of approximately $10 billion in shrink for 2010, with an external theft apprehension recovery figure of just over $104 million. This comes out to just over 1 percent of total shrink. One percent! If this survey is accurate, this is a staggering statistic. Even when a substantial margin of error is factored in, this data does not support the philosophy of any loss prevention program that spends the bulk of their time and capital investing in the apprehension of shoplifters. And when the high control risks for injury, death, and litigation are thrown into the equation, it makes even less sense. In analyzing the chart below developed by Merchant Analytic Solutions, if we credit shoplifting (external) as roughly 24 percent of yearly shrink, consider all of the control risk that is associated. Now look at the 76 percent of other losses. These represent the bulk of our concerns, and have the lowest risks associated with mitigation. Now look at the last box. As an industry, we allocate 70 to 80 percent of our budgetary distribution toward the high control risk, low-impact factor of external theft. How does this make sense?

Industry Composite Internal—Low Control Risk Extrernal—High Control Risk Vendor—Low Conrol Risk Admin—Low Control Risk

apprehension of offenders on shrink is still an open question and often a topic of heated discussion. Ask twenty different members of the LP industry what percentage of their shrink issues can be attributed to shoplifting, and you will likely get twenty very different answers. ■ Why Continue with this Approach?

“Shoplifting is an easy scapegoat for the shrink woes of some stores, districts, or retailers as a whole,” says one former vice president of LP at a major specialty retailer. “Shoplifting is that one consistent, universal, uncontrollable evil that exists in all of retail, and is often used as an easily accessible and very believable excuse.” There is some truth in that quote. Shoplifting is an easy-to-identify, easy-to-blame occurrence that happens in every retailer. The gut feeling for many in retail, especially operators, is that shoplifting is the primary cause of shrink. Even though we have multiple data with colorful pie charts that say otherwise, shoplifting still somehow gets top billing. Perhaps then, just showing them the pie chart isn’t enough. Think about your last visit with the store manager in one of your high-shrink locations. Assuming that you discussed shrink strategy, what was the first thing the manager blamed? Typically, its shoplifting. How often have you heard something to the effect, “There’s one guy that comes in every other day and wipes out my batteries and deodorant. When are you guys going to catch him for me?” More often than not, something along this line is the default answer, and often through no fault of the store manager. They may know that internal theft (“My employees won’t steal from me.”), administrative errors, and vendor issues contribute, but not to what extent. Perhaps they also have not been trained on how to actually diagnose and fix the other 76 percent of their losses. So what they are left with is what is happening right in front of them—shoplifting.

% of Total Cost 57% 24% 13% 6%

Ability to Limit Loss with Risk Total Shrink Loss 100% Control with Low Risk 76% Control with High Risk 24%

How Do We Evolve?

Wouldn’t it be nice if the next time you ask that store manager about shrink, they answered in the following way? “We had to rush through our seasonal change over after Christmas, and, as a result, our price-change processes and overall pricing integrity has gone by the wayside a bit. This has led to a tremendous influx of SRAs at the front registers, manifesting themselves as line voids, price modifications, and generic SKU entries. This could have led to hundreds, if not thousands of dollars in deteriorated margin and

Budget Spend Distribution Budget Spend Less Payroll Low-Risk Controlable 20–30% High-Risk Controlable 70–80% 22

March - April 2012

continued on page 24

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TO STOP OR NOT TO STOP

■ The gut feeling for many in retail,

especially operators, is that shoplifting is the primary cause of shrink. Even though we have multiple data with colorful pie charts that say otherwise, shoplifting still somehow gets top billing. Perhaps then, just showing them the pie chart isn’t enough. ■ continued from page 22

shrink across multiple SKUs in a number of categories and departments. But my LPA caught it, and now we are working together to ensure that the issue is corrected.” This would be a welcome change, no? A companywide shift in LP culture and focus can help get you to that point. Moving the focus away from external theft and more onto the controllable elements of shrink can help: ■ Reduce shrink. ■ Improve gross margin. ■ Increase net profit. ■ Increase stock value. ■ Decrease the pressures associated with the “need” to apprehend shoplifters; if shrink is being controlled through other measures, shoplifting isn’t as much of a priority. ■ These decreased pressures result in a decreased risk of injury, death, and/or litigation in shoplifter apprehensions. Some retailers are at the forefront of this evolution in LP culture. Consider the results of a Fortune 25 specialty retail chain that began undergoing a shift in culture in 2002 with excellent results. The company focus…not just LP… was shifted from an apprehension-driven external-theft mindset to one of operational knowledge and holistic vision. The program was centered on the mitigation of SRA (sales reducing activities) and their operational causes. This retailer did not disallow external apprehensions completely, giving the option to the store management team, but only if they felt they had no other alternative. The company adopted and strictly enforced a no-touch, no-contact policy, as well as a stringent product-protection, theft-prevention program. They reviewed their LP team based upon a combination of overall shrink numbers, SRA mitigation, and company performance. As a result of these changes, over the next five years, this retailer saw a 94 percent improvement in shrink (over $800 million), 11 percent improvement in gross margin, and an impressive 85 percent “bump” in net profit. The shift in LP focus had a tremendous effect on this retailer. Similar culture changes are being tested in other forward-thinking retailers worldwide. Access to data across the entire business enterprise, as well as our ever-improving abilities to analyze and interpret it is giving us a much more holistic view of loss prevention’s ability to control shrink. Maybe this is leading us toward having more influence on the 76 percent of shrink that is controllable, rather than

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having to place quite as much risk, emphasis, effort, and expense in trying to manage the uncontrollable 24 percent.

To Stop Or Not to Stop

Shoplifting is a retail problem that has been around since retail began. It is not going to disappear any time soon. Your department and company need to consider how much impact it is actually having on profits, and then react accordingly. There are other aspects of shrink occurring in your buildings that are contributing to the bulk of your shrink woes. These aspects are much more controllable, and much safer to address. However, if your company has decided that shoplifting apprehensions are a necessary part of your shrink strategy, consider implementing or revisiting the following measures: ■ Utilize shoplifter apprehension as a technique of last resort. This should not be your first line of defense; it should be your last. ■ Institute and enforce a zero-tolerance no-chase, no-touch policy for all employees. ■ Anytime labor reductions necessitate a cut in LP payroll, revisit and revise safety practices with the remaining team members. ■ Encourage a “buddy system”—could be manager, floor associate, uniformed security—to avoid LP agents making apprehensions alone. ■ Hire LPAs with good business acumen and the ability to learn company operations as well as theft mitigation. ■ Ensure that new hires are aware of the differences between working in law enforcement and working in loss prevention. ■ Ensure that they are capable of always making decisions that are in the best interest of safety, shrink mitigation, and the overall company brand. ■ Expose LPAs to category, department, and/or SKU-related shrink results, and ensure that their focus is prioritized appropriately. ■ Encourage the practice and recognize the success of prevention technique recoveries as a part of the LPA job description. ■ Train and require continued training on all facets of the business operation, including perpetual inventory process, price changes, markdowns, seasonal changeovers, DSD and receiving processes, POS system operation, SRA analysis and mitigation, and others. ■ Use shrink results as the LP report card. Review and promote LPAs on their ability to impact shrink through productivity and a combination of these measures. Their success and the shrink success of their stores or spans of control should go hand in hand. On this subject, the bottom line does not refer to company profits. Be safe. And remember that nothing in your store is worth your life or anyone else’s.

JOHNNY CUSTER, LPC, CFI is the director of field operations and data analysis with Merchant Analytic Solutions, LLC. He is a career loss prevention professional with over twenty years’ field experience with several major retailers. Custer also serves as chairman of the Loss Prevention Foundation’s membership committee. He can be reached via email at jcuster@merchantanalyticsolutions.com. |

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“I’m certified. Here’s why.” Sandy Chandler, LPC, CPP Regional Director, Loss Prevention Rite Aid Corporation

With the evolution of our profession, it is imperative that retail LP professionals become true business partners. Whether you are a seasoned LP professional or just starting out, the Foundation certification courses have valuable content to meet that goal.

These courses contain a wide range of subject matter that validates our ever-changing roles, showing how valuable our position is to our retail organizations. The LPC allowed me to become more proficient on some subjects not previously utilized. For example,


“I have a job. Why do I need certification?”

Certification not only prepares you for the future, it helps you when you need it most—in your current job. Certification refreshes and validates your knowledge base while teaching you critical business expertise to roundout your skill set. It not only covers key components of loss prevention, it teaches you solid business skills to prepare you for your next promotion. “Yeah, but…” “It costs a lot.” Certification is very affordable and can even be paid for in installments. It is one of the best investments you can make for yourself and will pay for itself over again as you advance in your career. “I don’t have the time.” Certification was designed by seasoned professionals who understand the demands on your time. The coursework allows you to work at your own pace and at your convenience. Everyone is busy, but those who are committed to advancement will find the time to invest in learning. “I’ve never taken an online course.” The certification coursework is designed with the adult learner in mind. The online courses are built in easy-to-use presentation style enhanced with video illustrations to elevate comprehension and heighten retention. “What if I fail?” Both the LPQ and LPC certifications have been accepted for college credit at highly respected universities, and as such, passing the exam demands commitment and study. However, the coursework includes highly effective study and review tools to fully prepare you for the exam. In the event you fail the exam, you can review the coursework and retest after 30 days. “Okay, how do I get started?” It’s easy to get started. Go online to sign up at www.LossPreventionFoundation.org. If you need help or want more information, contact Gene Smith at Gene.Smith@LossPreventionFoundation.org or call 866-433-5545.

the compliance module enhanced my expertise, giving me an edge in our highly regulated retail environment. In order to promote career knowledge and advancement, the Rite Aid LP department endorses both the LPC and LPQ courses, and selects key personnel every year to receive scholarships. Why?

Because these certifications provide the business skills necessary to maximize our contributions, not only within our department, but to impact the company on multiple levels, substantiating a higher return on investment and further advancing our industry through continued professional development.

SM

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ACADEMIC VIEWPOINT

New Findings in EmployeeTheft Research A

s many of you know, I have been researching employee theft, occupational crime, dishonesty, and workplace deviance for nearly thirty years. Regularly I peruse the scholarly journals and academic publications in the library looking for new research studies that can help us all better understand this phenomenon. This column will feature a couple of studies that may shed some new light on this continuing problem. I have included the full citations so you can find these publications online or in your local library to read and share with your staff. If you can’t find the articles, send me an email, and I will try to get the original sources to you. If you do not have direct access to a major research library, try using googlescholar.com.

“Workplace Theft: An Analysis of StudentEmployee Offenders and Job Attributes”

The first article is authored by Elizabeth Ehrhardt Mustaine (University of Central Florida) and Richard Tewksbury (University of Louisville) and published in the American Journal of Criminal Justice 27:1 (pages 111 – 127, 2002). This is a relatively recent study of employee theft that surveyed a large population of college students attending a number of major universities. Since existing research suggests that many dishonest employees are younger, part-time, untenured, and dissatisfied, these two researchers concluded that college students would make an ideal sample of employees to survey about their occupational criminal behavior. They conducted a self-report survey of 1,531 students in the fall of 1996 asking them to report personal demographics, opportunity, and previous theft activities. The findings are consistent with a number of other studies (including mine), but with some rather unique results. The authors found that three factors differentiate between those who admitted stealing at work from those who did not. Some of these predictors included theft behaviors that occurred in other settings. For example, most impressive was the fact that students who have admitted that they recently have broken into a motor vehicle were almost fourteen (13.87) times more likely to steal from their employers. Moreover, students who have recently stolen something from a stranger were over four times (4.35) more likely to steal at work. Also of significant interest was the fact that ex-convicts were nearly four times (3.59) more likely to admit stealing from their place of work than those respondents who have never been sent to prison. There were a few other findings of interest. Alcohol use was related to admitting stealing at work. Public intoxication, but not drug use, predicted admitted workplace theft. College students who reported that they have been drunk in public were 1.56 times more likely to admit stealing while at work. Finally, the more jobs that a

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by Richard C. Hollinger, Ph.D. Dr. Hollinger is a professor in the Department of Sociology and Criminology & Law at the University of Florida, Gainesville. He is also director of the Security Research Project, which annually conducts the National Retail Security Survey (soccrim.clas.ufl.edu/criminology/srp/srp.html). Dr. Hollinger can be reached at rhollin@ufl.edu or 352-294-7175. © 2012 Richard C. Hollinger

student has had in the past and the more often these jobs involved cash handling was also related to workplace theft, but at a lower level of predictive power. We must remember that this study was conducted with college students and used self-reported indicators of workplace theft. Nevertheless, even with this caveat about the sample, the policy implications are significant. ■ First, drug testing may be a good indicator of current and future drug use, but may not be the best indicator of theft behavior. ■ Second, criminal background checks that screen out applicants with prior convictions that resulted in incarceration are obviously supported by this screening practice. ■ Third, as we know in social science, the best indicators of future behavior is past behavior, especially when we consider that stealing in non-employment situations is a very good predictor of workplace theft. The principal paradox of this study is the finding that with the exception of the above factors, most of which retailers screen

The best indicators of future behavior is past behavior, especially when we consider that stealing in non-employment situations is a very good predictor of workplace theft. for already, the average college student who does not steal is not dramatically different from the one who does. Since we rely on these young people for a substantial proportion of the retail workforce, there is clearly no “silver bullet” that can distinguish those who will steal at work from those who will not.

“Dishonest Associates in the Workplace: The Correlation between Motivation and Opportunity in Retail among Employee Theft(s)”

The second study that I would like to draw attention to is an excellent master’s thesis written in May of 2009 by Edith Marie Fikes who studied at the University of Texas in Arlington. Unlike many studies, such as the one above that rely upon self-report methodologies, this study reviews the characteristics of associates who were terminated for instances of employee theft by a single anonymous retailer. All of these cases were detected between the first of July 2007 and the end of June 2008. This study employed

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the classic theoretical theft triangle of motivation, opportunity, and rationalization first introduced by the renowned white-collar crime and embezzlement scholar, Donald Cressey. Fikes was granted access to the files of all 502 employees apprehended for theft during this one-year period. She reports that the most common associate apprehended was a white male (59%) between the ages of 18 to 22 years old (48%), employed on an hourly basis (88%), who worked on average no more than six months before being caught (36%). The amount stolen averaged $523, usually occurred at the point of sale (38%), and was discovered by management (53.5%), but not reported by a fellow associate (only 15.4%). Not surprisingly, termination without criminal charges filed was the most typical final disposition of these cases (87%). What really makes this study unique is that the researcher also inquired as to whether the employer inadvertently created an opportunity for the crime to occur by not creating a credible set of control policies and procedures designed to reduce the opportunity for dishonesty. She found that theft increased significantly when management failed to do any of the following: ■ Damaged merchandise case not secured, ■ Entering or exiting the building alone allowed, ■ Failure to check returns for contents, ■ Failure to inspect trash, ■ Failure to process non-receipted returns, ■ Failure to inspect refund report, ■ Failure to scan product, ■ Failure to secure case pick-up, ■ Failure to secure customers credit cards, ■ Failure to secure merchandise,

ailure to secure product per merchandising guidelines, F Improper or unauthorized use of company funds, ■ Incorrect register access, ■ Poor key controls, ■ Lock-up door propped open, ■ Bag checks not conducted, ■ Manager not present at the front lanes, ■ Password integrity problems, ■ Unauthorized associate in lock up, and ■ Unauthorized price over-rides. In short, if the loss incurred was partially the fault of the actions or lack of action by management, the incident was coded as such. Using these well-used criteria, the author found that “77% or 369 of the associates terminated for theft had an opportunity created for them by management to steal.” While this research does not intend to “blame the victim” for the dishonesty of retail associates, it does raise valid questions about the role that inadequate controls and poorly implemented asset protection policies play in creating the ideal opportunity for a motivated offender to act on various temptations to steal. ■ ■

More to Come

Well-designed, peer-reviewed research studies conducted by qualified criminologists often do not find their way into the reading lists or desks of retail and LP executives. My hope is that these two studies, as well as other articles to be discussed in future columns, will provide plenty of material to stimulate discussion and reassessment of the policies and practices used to deter, prevent, and detect dishonesty by retail sales associates in the current business and social environment.

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LP Magazine | March - April 2012

07-02-2012 14:01:34

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PARTNERING WITH RETAILERS

Globally industry loses billions of dollars each year to counterfeiters. Some industries find themselves in direct competition with counterfeiters that are producing higher quality fakes to compete with the genuine items. eBay has aggressively pursued counterfeit merchandise sellers thoughout the years as these criminals can cause serious issues for buyers, sellers, and retailers. As retailers continue to migrate to our platform for an additional revenue stream, the detection and removal of counterfeits has become more important. In response the Global Asset Protection (GAP) team has expanded its operations to include a team dedicated to combating counterfeit goods. The Anti-Counterfeit Operations (ACO) team was launched in July 2011 and is comprised of eBay veterans who are adept with the many processes and systems across our platforms. In a short period of time, we developed a roadmap with the mission of protecting eBay users against counterfeits and assisting our cross-functional business partners to create a retail-like trust for our buyers and sellers. As we tackle this issue, we seek to apply the findings from our stolen-goods efforts and utilize existing eBay and PayPal data points, analytics, and reporting to flush out counterfeiters as well as develop programs to deter them from our platforms. The ACO group has conducted meaningful reviews of sellers who contributed to the counterfeit challenge while operating on our platforms. We have successfully identified problem sellers and have been aggressive in our approach on how we deal with them. Our findings and recommendations have been shared with our cross-functional stakeholders and have proven to be an effective learning tool. Our team has developed processes and systems to utilize data from all platforms to leverage the anti-counterfeiting efforts. We audit and measure performance of all anti-counterfeiting efforts, with improved tracking of performance, successes, and anti-counterfeiting strategies. These efforts led to the development of more effective exception reporting that can identify eBay accounts with a PayPal nexus to counterfeit actions. The results of these efforts have led to the establishment of suspicious-supplier reporting that focuses on the sources of counterfeit product, making it increasingly difficult for counterfeit sellers. The ACO team piloted an approach of reviewing the top sellers of popular products. These sellers were scrutinized and vetted with new tools and techniques to identify counterfeit sellers. The team was able to accurately identify counterfeit sellers and have them removed from our site. Anyone who has worked on a counterfeiting case knows how difficult pursuing counterfeiters across borders can be. ACO investigators successfully identified and referred a case involving the sale of counterfeit cell phones and accessories to the Chinese Public Security Bureau (PSB) in Shanghai. PSB authorities are now pursuing the lead. 30

March - April 2012

By Dave DiSilva

The ACO team is developing work streams to support early identification and removal of suspected counterfeiters from eBay marketplaces with an emphasis on top fashion brands. Our aim is to facilitate outcomes to remove, restrict, and, in some instances, educate sellers who have played a part in the counterfeit issue. The team has established creditability and valuable relationships with other departments to work cross-functionally in order to understand and shape future plans related to anti-counterfeiting tool development. The goal is to integrate findings and results into cross-functional teams throughout eBay, including trust and safety, customer support, filters and rules, policy, government relations, and legal. The ACO group continues to support the eBay’s intellectual property team in their efforts of building relationships with rights owners, retailers, and brands respectively. eBay and the Council of Fashion Designers of America (CFDA)

Dave DiSilva is a member of eBay’s Global Asset Protection team.

Counterfeiting continues to be a global issue that threatens industry, and everyone needs to do their part to thwart this crime.

launched YOU CAN’T FAKE FASHION, a campaign to raise awareness against counterfeit goods and celebrate original design. We have collaborated to produce a collection of original canvas tote bags bearing the tagline to start conversation around these important issues. The bags will be available starting March 20 exclusively on eBay.com. All proceeds benefit the CFDA Foundation to support this important cause. There are a number of important next steps in the works: ■ Develop a more cohesive anti-counterfeit approach and help eliminate cross-departmental redundancy by compiling and creating dynamic solutions and recommendations for appropriate global organizational design, structure, tools, dashboard expenditures, and processes for future anti-counterfeiting procedures. ■ Improve counterfeit investigations with quality training to ensure appropriate action is taken with counterfeit sellers. ■ Explore methods to recover losses and expenses related to counterfeiting activity on eBay and pursue legal action and criminal prosecution against counterfeiters where appropriate. Counterfeiting continues to be a global issue that threatens our industry, and everyone needs to do their part to thwart this crime. eBay is doing its part and will continue to communicate our progress and successes as we strive to create a retail-like trust for our buyers and sellers. |

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INTERVIEW

Data-Driven

Results at Rite Aid Delivered with Leadership, Hunger, and Passion By James Lee, Executive Editor

LP Magazine | March - April 2012

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INTERVIEW

Rite Aid Loss Prevention Leadership Team

Dave Pimer Director of LP Divisions 3 and 5

Cathy Langley Senior Director of LP

Sophia Lai Director of Pharmacy LP

Frank Hopkins Director of LP Division 1

Sandy Chandler, LPC, CPP Regional Director of LP Division 1

Jon Collins Regional Director of LP Division 3

Tierre Chappel Regional Director of LP Division 4

EDITOR’S NOTE: Robert “Bob” Oberosler is group vice president of loss prevention for Rite Aid, one of the nation’s leading drug store chains with nearly 4,700 stores and over $25 billion in annual sales. He has thirty-plus years of varied retail loss prevention and operations leadership experience with Pathmark Stores, Lowe’s, and May Company. Just prior to Rite Aid, Oberosler was president of Universal Capital Management, a boutique small venture capital company. He is known for identifying talent and building diverse, results-oriented organizations. EDITOR: You have had an extraordinary career with

several top retailers. When you arrived at Rite Aid in May 2010, what were the initiatives that you identified early on that were necessary to take Rite Aid’s loss prevention department to the next level? OBEROSLER: The first thing I found was we had a boatload of talented, passionate loss prevention professionals. However, they didn’t have a deep toolbox of tactics at their disposal. There didn’t seem to be much discussion around creating overt controls, the factors that drive a store’s shrink, classification of stores based on risk modeling, and other proactive measures. So, one of the first things we had to do was reset the agenda to make sure that our loss prevention professionals knew that the scope on the business was going to change dramatically. They were going to become resident experts in many areas that they weren’t experts in before, for instance, inventory and the replenishment process. They were going to get more involved in facets of the business beyond loss

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March - April 2012

Keith Harmon, LPC Director of LP Division 2

Note shown is Shawn Jenkins, LPC Regional Director of LP Division 2

prevention, to develop a complete understanding of all the factors that affect the store P&L. We were not going to focus on apprehensions, but how to help the stores improve sales, improve EBITDA [earnings before interest, taxes, depreciation, and amortization], and control shrink. EDITOR: How was that change received? OBEROSLER: I think it caught people by surprise. Here

was the new VP of loss prevention saying—more for dramatic effect, frankly, but, certainly, to set the tone—“I don’t really care if we catch another shoplifter or employee ever. As a matter of fact, that would be the greatest thing ever.” Why? Because we were a company that was focusing on the number of apprehensions we made, the number of recoveries we made, and not as focused on the sales number, the EBITDA number, and the overall shrink number. This was a big change for everybody in the LP department. This required us to restructure how we evaluated our store-level LP agents. It wasn’t going to be about showing up for work every day and how many shoplifting cases they made. What we told them was, “You’re going to be responsible for the shrink number, and we’re going to give you a big toolbox to help you.” EDITOR: So you completely moved

away from apprehensions. OBEROSLER: Well not exactly, we still make many cases each year. I just don’t think we need to motivate loss prevention agents to make shoplifting cases. It’s in their |

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INTERVIEW DNA already. But for that to be their number one criteria on their evaluation isn’t the right priority. When I think about the perfect loss prevention agent, it’s not the person who goes out and apprehends the biggest, baddest shoplifter. It’s the person who knows every single thing that’s going on in their store, has great relationships with everyone in the store, takes guardianship over their high-theft items and categories, knows the items that they’re losing, and has applied the appropriate tactics to drive sales and control shrink. So, one can have the person who delivers a phenomenal shrink number, or a loss prevention agent who’s making 300 shoplifting cases a year while shrink is out of control. I know which of the two I want in my organization. EDITOR: I’ve heard you talk before about

controlling shrink versus eliminating shrink. OBEROSLER: I’m not the zero-shrink guy. If you want to try to get zero shrink, hire somebody else. I’m going to aim at getting shrink down below a certain percentage number where we have that careful balance between maximizing sales and controlling shrink. You have to understand the customer shopping experience. You are going to have some shrink if you want your customers to have a great shopping experience.

EDITOR: Earlier you mentioned “risk modeling.”

Talk about what you mean by that. OBEROSLER: Risk modeling is a way of classifying our stores that helps us determine how best to apply our resources. For example, our front-end shrink risk model scores every store by class and risk—class being their historical shrink with five being the highest to one the lowest, and risk being that element outside the four walls noted as high, medium-high, medium, medium-low, or low. So, if I’m talking about a store that is “five high,” then everyone understands that it’s a high-shrink store probably in a high-crime area. That store will require a particular set of tactics. On the other hand, if we’re talking about a “five low” store—that’s high shrink in a low-crime area—then obviously something else is driving shrink besides shoplifting. So, that store requires different tactics. EDITOR: Are there other risk models you use? OBEROSLER: In a way Rite Aid has two businesses in

one—the front end and pharmacy. So, we also had to create a risk model for pharmacy, which is broken down even further into pharmacy robbery and pharmacy burglary. Now we have models for these three big chunks that we’ve separated and can apply the right resources and tactics to.

LP Magazine | March - April 2012

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INTERVIEW EDITOR: We’ll come back to pharmacy. Let’s stick

with the front end for a moment. One of the key programs that you’ve been partial to throughout your career has been the establishment of merchandise protection standards and the management of those programs. Talk about how you monitor and manage internal and external incidents and how they relate to your overall merchandise protection programs. OBEROSLER: We had kind of a one-size-fits-all program to merchandise protection. One of the tools we had was source tagging, which certainly has its place. But then, we kind of leapfrogged all the way to locking glass cases, which I simply despise. “In the late 80s I was a rookie LP manager at May Department Stores in Los Angeles. My partner, Claude Verville, and I were assigned the weekend closing shift at our dreaded warehouse clearance sale. While discussing the anticipated arrival of our new VP of LP, we noticed an unidentified individual sneaking and crawling around merchandise fixtures. We observed the individual for some time before identifying ourselves and offering assistance. The individual looked up and replied, ‘Hi, I’m Bob, your new VP, and you guys are burning my dishonest employee pass-off case.’ “That’s Bob Oberosler. He’s what you’d call a player’s coach. He wouldn’t ask you to do anything he hasn’t done before or wouldn’t do himself. He began his retail career as an entry-level store employee and has never forgotten his humble beginnings. As a result he’s always been passionate about self-learning, mentoring, training, internal promotions, and taking a good risk once in a while.” - Leo Anguiano, Chief Risk Officer, Central Parking Corporation EDITOR: Why is that? OBEROSLER: When I was running store operations for a few

years, I saw how locking glass cases hurt me on sales, hurt me on labor productivity, and hurt the customer shopping experience. Plus, locking glass cases cover entire categories, when it’s only certain items within that category that might be driving that loss. So, you’re overprotecting certain items and hurting the customer shopping experiences in others. Data shows the highest stolen items are also typically the highest selling items. That’s why they’re stolen.

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March - April 2012

There’s no mystery to that. That’s why I talk about high-theft items, not high-theft categories. The question becomes—how do you create that careful balance? The loss prevention executive today has to be the captain of the strategic plan for selling and controlling the loss of high-shrink items. We have to understand all the different points of view throughout the organization, such as the pressures on the category manager to drive sales and make margin and their valid concerns over “restrictive” selling. Or why shoplifting in a store is personal for the store team and why they may do certain things to protect their product that may end up hurting sales. We developed a data-based matrix that dictates different levels of protection for different levels of risk as opposed to rolling out one company-wide tactic. The matrix goes from least restrictive tactics up to most restrictive with multiple points in between. This gives operators a clear decision-making process based off the data, based off their risk-and-class modeling, and based off their experience in the store to implement different tactics to find that careful balance of sales and controlling loss. EDITOR: How do you implement that strategy? OBEROSLER: Our loss prevention district managers are

becoming the resident experts on the strategic plans, and they have the data. They work with their district operations partner to find the proper balance for a particular item. For example, take a high-theft item like Prilosec. If you’re in a high-shrink store, you may have ProfitGuard™, which is basically a plastic shield over the shelf that sets off an alarm that gets louder the longer it stays open. Plus, you may have that in a vault. You may also be on quantity control. So, you have three or four layers of protection. The key is the customer can still pick it up and buy it, but at the same time you are controlling loss. On the other hand, a low-shrink store in a low-crime area may not need quantity control or ProfitGuard. Just having a vault protector on it is enough. EDITOR: Given these multiple layers of protection

and the need for a bigger toolbox, what are some of the technologies and programs you’ve put in place to help control loss? OBEROSLER: One of the first things we had to do was address the issue of losses due to internal theft and procedural errors. Because we’re a company that’s in a turnaround stage, we don’t have all the CAPEX [capital-expense] dollars that other companies have. That meant we had to really rely on our data to drive decisions on where to spend our capital and find proven solutions that provided a significant return on investment. One of the first vendors we signed up was Agilence, which is now in a thousand stores. Agilence gave us the capability of having a POS interface with exception reporting and live video feeds. That changed the way we looked at internal losses dramatically. Instead of relying on Retail Expert and |

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INTERVIEW NaviStor reports only, now we can react in real-time. We had some very clever people out there who had figured out ways to defraud the company and stay under the radar. Agilence was able to detect them. Other things Agilence helped us identify were coupon abuses and procedural losses that aren’t in the shrink bucket, but in the gross margin and promotional-spend buckets, but EBITDA nonetheless. It also gave us the connectivity to look into stores from a remote location, and that is becoming a big game changer for us. We have a team at headquarters that’s run by Cathy Langley, who is senior director of loss prevention and a very sharp, analytical person with twenty-plus years at Rite Aid. Her team is looking at more complicated transactions and will soon be looking to use our system to create better overt controls and, maybe just maybe, branch out into improving operating efficiencies, such as manager overrides and authorizations, where we might be able to improve productivity without giving up controls. EDITOR: What about product-protection devices? OBEROSLER: We’re working with Universal Surveillance

Systems (USS), and here’s the reason why. There are several companies in the product-protection space, but here was something that separated this company from the others—they listened.

“I can honestly say that Bob was the first supervisor I ever had that inspired me to want to be great, not just good, at my profession. He was a master at motivating and creating a healthy competitive environment between many of his direct reports. Although not understood at the time, Bob was developing and establishing the core competencies and behaviors necessary for successful leaders. Most of all, Bob taught me humility, a strong sense of loyalty, and the art form of deferring successes to his subordinates rather than focusing on himself.” - Claude Verville, Vice President, Loss Prevention, Safety, and Hazmat, Lowe’s

LP Magazine | March - April 2012

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INTERVIEW One thing I do that maybe other retailers don’t is I share all of my information. When I bring vendors in, I give them my entire database of over four-million entries representing millions of known theft by SKU. I say, “Here’s the file. Give me your best solutions.” We have a model store inside a local warehouse that is an exact, up-to-date store with everything set up and every planogram. I tell them, “Go down there. Go through the shelves. What’s your least restrictive solution that helps control loss and will enhance the customer experience? And, yes, I also want a good return on investment.” USS sat down with us and didn’t say a word. They listened. They took the data. They went through the store. And then they went away for two months. I thought, “Well, here’s another company that I won’t hear back from or will try to force through their solutions.” But to my surprise, they came back with a catalog of solutions; exactly what we were looking for. EDITOR: That’s a great retailer-vendor partnership example. OBEROSLER: Bass Security is another small vendor who

listened to what we needed and earned our business. Incidentally, one other thing USS did. They listened to me regarding a mistake the industry made years ago. That mistake was allowing the introduction of the portable hand detacher. It didn’t take long for every

36

March - April 2012

ORC crook to have a hand detacher. USS agreed that they would never, ever create a portable detacher. EDITOR: So, now all of these various vendors’

solutions make up your expanded toolbox. OBEROSLER: Now we have an overall strategy with a variety of tools, each with an associated ROI that Cathy’s team has developed, that allows our district LP managers to sit down with their district operations manager or district pharmacy manager to determine the appropriate item or layer of measures that meet the needs of their individual stores. EDITOR: Since you mentioned pharmacy, let’s turn our

attention to that side of the business. What are some of the issues and programs you’ve implemented there? OBEROSLER: One of the programs that was already here… and I compliment them…is they had created a director of loss prevention for pharmacy position with a small team dedicated to detecting and controlling losses in the pharmacy. What is critical is that director is a licensed pharmacist. That is important for a couple reasons. First, only a pharmacist really understands the things that happen behind that counter. Further, there are many times we’re dealing with private information that only a pharmacist is allowed to see. So Sophia Lai, our pharmacy LP director,

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INTERVIEW looks at information that I’m not even allowed to see, which is especially helpful in drug diversion investigations. EDITOR: Is drug diversion the primary

problem in pharmacy? OBEROSLER: There are really three areas that affect pharmacy shrink. One is drug diversion by a pharmacy associate. The others are robbery and burglary. Again, we’ve created risk profiles for each one of these that we can now apply the proper resources. We already had a lot of controls built into the pharmacy when I arrived. It was a fantastic program, but you can always sharpen the knife. So, we started focusing efforts on the top issues within each risk profile, be it diversion, robbery, or burglary, and created a toolbox of tactics for each. On the drug diversion side, we started focusing on those stores that had historical shrink, as well as focusing on the most commonly diverted drugs. There are thousands of drugs behind the counter, but only a fraction of those are diverted. We started redoing our NaviScript reports, which is an offshoot of Retail Expert, and combined them with our NextGen system, which is basically the system that runs all dispensing, inventory, and patient information.

“Bob Oberosler has had a profound effect on my career and my management style. He gave me my first management position and promoted me several times after that. I’ve learn countless things from Bob that have now become part of who I am and how I do business. The things that everyone recognizes instantly about Bob are his infectious energy, his natural motivational style, and the amazing ability to establish trust. He gains his team’s trust because he in turn shows trust, embodies that trust, and fosters an environment where you are allowed to get to the result through your creativity and not by following a rigid path.” - Cornel Catuna, Executive Vice President of Club Operations, BJ’s

continued on page 38

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LP Magazine | March - April 2012

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INTERVIEW continued from page 37

By combining these two, the pharmacy LP team is able to detect many drug-diversion cases to the pill level. EDITOR: That’s impressive. OBEROSLER: What we’ve seen is exactly what we thought

we would see. We first saw an increase in the number of drug-diversion cases, and now it’s starting to fall. To be accurate, the number of cases hasn’t fallen much, but the dollars-before-detection amount has fallen dramatically, which is exactly the way you want those arrows going. EDITOR: What about robbery and burglary? OBEROSLER: First, we identified the stores that were most

susceptible to pharmacy burglary. We worked very closely with other drug-store retailers to get some of these rings that were hitting us. For those stores that are most susceptible to burglary, we created tactics to stop it and built different levels of fortification. That has worked tremendously well for us. We’ve seen our losses from pharmacy burglary in the past year drop by high double digits. EDITOR: Is the same thing true for robbery? OBEROSLER: Robbery is not a big dollar loss item, but it’s

certainly something that the industry is struggling with, especially because of the impact it has on store associates. “Working with Bob Oberosler is a unique experience because he is very different than your typical executive. He pushes his entire team to get outside of their comfort zone. He is also not bound by traditional roles. He encourages everyone to think of where they can add value to the business regardless of expertise. This type of thinking is very unique and creates an environment for personal and professional growth that is not commonly found in most organizations. Bob’s unique management style and mentoring foster a group of people that are soon ready to take on other challenges, which is one reason why so many executives in retail trace their earlier careers to Bob. There are few people in leadership positions with the courage to put their team in front of their own personal ambitions, but those that do create a lasting legacy such as Bob’s.” - Pedro Ramos, Vice President of Sales, Agilence Inc.

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We are very aggressive and have many different initiatives in place. As we started analyzing pharmacy robbery, we noticed something absolutely amazing that I’ve never seen in my thirty-plus years in LP. That is, the vast majority of these robberies were happening in stores in low-crime areas—exactly opposite of what you would expect. When we dug down to root cause, we came to the fact that pharmacy robberies were driven by people with an addiction to prescription medications. They are addicted to a high level of opiate, then run out of money or run out of insurance, and they believe their only recourse is to go and rob a pharmacy. People ask me, “Why aren’t pharmacies robbed in urban stores?” Well, it happens from time to time. But what normally happens in urban stores is they rob the front end because they can take that cash and get better, more drugs on the street than they can behind the pharmacy counter. EDITOR: That’s very interesting. OBEROSLER: Let me first say robberies are very hard to

predict. What we attempt to do is create predictive models and deploy tactics for where we believe we are most susceptible to robberies. The results have been dramatic. Based off the best data we have, pharmacy robberies across the industry are up, while ours are down and continuing to drop year over year. We are very aggressive in using every continued on page 40 |

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INTERVIEW continued from page 38

available resource to apprehend a person that robs our pharmacy, and I am happy to say we are very successful. We need to be for our associates and our customers. EDITOR: One of your first comments when we started

this interview was about the talented professionals in your organization. Looking back at your career, you’ve had a large number of excellent LP professionals who have made great LP executives. Why is that? OBEROSLER: I’ve been blessed to work with a number of smart, passionate professionals, whether they were in the organization when I arrived, like here at Rite Aid, or whether I had to recruit them. For some reason, God’s given me a gift for recognizing talented individuals and putting them in the right position to excel. “I was fortunate enough to work for Bob when the loss prevention and safety department was created at Lowe’s. Bob has the ability to select the right talent, develop each individual, and drive toward a strategic plan that’s aligned with the company. His personal drive and passion are contagious. If you measure Bob’s leadership by the number of people who worked with him that are now executives, you’d have to say he’s one of the best. Bob has been a mentor and friend to me, and I’m a better leader having worked for him.” - Jon Grander, Vice President, Asset Protection, Brown Shoe Company

EDITOR: What type of person do you look for? OBEROSLER: The type of person that works best

with me is someone who is data driven, analytical, passionate about what they do, and hungry for results. I’m a numbers guy, and I like people who are focused on numbers. Give me a person with those skill sets, and I’ll teach them the loss prevention part. One of the other things I strongly believe in is building a staff of diverse individuals and putting them at all levels of the organization where they can have impact. There was a powerful, diverse team here at Rite Aid; I only had to bring in one person from the outside. Everyone else was already in the organization; we just had to find them. And, oh, by the way, I think there are three or four people on this team now who will be vice presidents or higher in companies one day.

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March - April 2012

EDITOR: That’s not surprising if you look back at your

career with May Company, Lowe’s, and Pathmark. There are fifteen or more who are now executives in this industry today either on the vendor or practitioner side. Why is that? OBEROSLER: The truth is I don’t know. Here’s what I do know. If you’re someone who wants your day scripted, who wants a checklist of tasks to do, you’re probably not going to do well with me. Now, that’s not wrong. There are certainly successful programs that do that. That’s just not me. On the other hand, if you are someone who says, “Give me the list of tools. Show me what you want built. Give me the data. Focus me in the right direction. Hold me accountable. But then, let me go out, learn, make mistakes, and find my own way.” Those people tend to do a lot better in my organization and down the road. EDITOR: Most people are afraid to make mistakes. OBEROSLER: I tell my people, “There’s not a mistake

you can make in doing your job that I can’t help fix. So, don’t be afraid to go out and push the edge of the envelope. That’s how you learn and make an impact.” EDITOR: Another common denominator of those

people who are now leaders in their company is they’re all very strong, confident individuals. OBEROSLER: In addition to being smart, I really want someone who has a very strong voice. Having a strong voice, being able to express yourself, having confidence in your data, and having the ability to motivate people are all important components of leadership, which, when it comes down to it, is one of the most important characteristics for success—leadership, hunger, and passion. EDITOR: What about education? OBEROSLER: I think retail is still one of those places

where a person with a master’s degree and a person with a high school degree can still excel if they do the things that we talked about. Some of those people who you referred to who are now executives do not have college degrees. But…and this is important…they have a Ph.D. in business experience, not loss prevention, in retail. When someone asks me about becoming a vice president, I tell them, “If you don’t read the business section or click on the business link every day before you read the sports page, you’re not ready to move to a higher level.” If they’re not a business person first and an LP person second, they’re not ready. Why? Because it’s not their passion yet. EDITOR: There’s so much more I’m sure we could talk about.

What final thought do you want to give our readers?

OBEROSLER: Love what you do every day because it’s a blessing

to work. Don’t say, “It’s not my job.” And don’t wear a watch, but always make it to your first meeting on time. The day’s over when the day’s over. If you’re checking your watch, you’re not focused on results and getting the job done no matter what. |

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Outstanding Mentors in Loss Prevention

wisdom to and shares knowledge with a less experienced colleague.” We are fortunate in the loss prevention profession to have many people willing to act as mentors. These individuals share their knowledge and both professional and life experiences for no other reason than to help those less experienced, and, in turn, to ultimately help the profession. During the month of March, we asked LP professionals to tell us about mentors who have helped in their careers. LP Magazine is proud to acknowledge the following three outstanding individuals who have been identified, by the sheer number of comments, as true mentors. Visit the magazine website to read about other mentors who played a role in developing professionals in our industry. If your mentor is not listed, please add him or her to the list.

In Greek mythology Odysseus, the legendary king of Ithaca and hero of Homer’s epic poem The Odyssey, placed his friend Mentor in charge of his son Telemachus when Odysseus left for the Trojan War. When Athena visited Telemachus, she took the disguise of Mentor to hide herself from the suitors of Telemachus’ mother. As Mentor, the goddess encouraged Telemachus to stand up against the suitors and go abroad to find out what happened to his father. Because of Mentor’s relationship with Telemachus and the disguised Athena’s encouragement and practical plans for dealing with personal dilemmas, the name Mentor has been adopted in English as a term meaning “someone who imparts Paul Jones, Senior Director, Global Asset Protection, eBay “No one had more impact on my career than Paul. His drive, knowledge, and attention to detail are remarkable Paul Jones and prepared me for running my own department.” “His mentoring has been invaluable to me and has helped me excel in the areas of strategy, development, and work ethic.”

If your business is

Rhett Asher, Vice President, Industry Relations, Food Marketing Institute “There are many successful people in our industry that I have learned from over the years, but none Rhett Asher as enthusiastic and passionate about our business as Rhett.” “Rhett truly cares about people and takes the time to develop their talents.”

Bob Oberosler, Group Vice President, Loss Prevention, Rite Aid “The things that everyone recognizes instantly about Bob are his infectious energy, his natural Bob Oberosler motivational style, and the amazing ability to establish trust.” “Bob’s unique management style and mentoring foster a group of people that are soon ready to take on other challenges.”

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March - April 2012

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Certification

We Have Some Catching Up to Do A

little over eighteen months ago I wrote an article for LP Magazine about the Loss Prevention Foundation. Maybe you read it, maybe you didn’t, but that doesn’t really matter. The main point of my article was to celebrate the fact that a long overdue need had finally been served—industry-specific certification for loss prevention professionals. Back then the Foundation was in its early stages. A number of dedicated professionals had performed a tremendous amount of work by bringing the vision to life. When I joined the Foundation as a charter member, there were only 800 members and 50 professionals that had achieved LPC certification. Now the Foundation can boast 2,700 members, hundreds of LPQ and LPC certifications completed, and almost 900 currently enrolled! That’s all great, but maybe you’re wondering, “So what’s your point?”

LP professionals finally have something that is valuable, necessary, and affordable, yet only a small percentage of us have taken advantage of certification. My point is this. In just eighteen months hundreds of LP professionals have taken advantage of the opportunity to stand out among their peers. Sure the letters LPQ or LPC look great after someone’s name, but that isn’t why these folks stand out in my mind. They stand out because they have made it clear to us that they believe in personal and professional growth; so much so that they have invested considerable hours in learning, growing, and developing as leaders first and LP professionals second. I certainly wish I could list each and every name here, but suffice to say, “Congratulations!” I am especially proud to state that twenty-three of my LP team are currently enrolled or have been certified.

That Was Easy.

Actually, no it isn’t. Achieving LPQ or LPC certification is just about anything but easy. The six modules that comprise the LPC curriculum—leadership principals, business principals, LP operations, safety and risk management, crisis management, and supply-chain security—may seem benign enough, but allow me to personally assure you, this is no quick read.

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by Dan Provost Provost is vice president of loss prevention for Staples U.S. retail stores and distribution centers. Prior to running the LP team for Staples, Provost held numerous positions within the organization, including vice president of store operations and store systems. His retail career spans nearly three decades, the last of which has been primarily dedicated to LP. Provost can be reached at 508-253-9145 or via email at dan.provost@staples.com.

There are thirty-one sub-modules contained in the LPC curriculum, each worthy of their own module in my opinion. Think about it, there are hundreds of how-to books on these topics alone. Reading, comprehending, and digesting all of this information is hard work. Honestly, you’ve really got to want to learn, grow, and develop to take on this challenge.

I Wish I Had the Time.

I hear that all the time, and by the way it’s a valid statement. We all have way too many things on our plates (I won’t insult you by listing them here), but here’s the thing—if you wait until you have the time, you’ll probably never get around to it regardless of your best intentions. Truth is this is less about having time and far more about having commitment to your future. Once you enroll, you’ll make time.

Will Certification Make a Difference?

Three letters at the end of someone’s name doesn’t make them a better person, it doesn’t make them a better professional, and it certainly doesn’t inherently make them a better leader. But it absolutely does do one thing (at least with me), it opens doors. What do I mean? Here’s the scenario. Let’s say I have a position open on my field team. After a number of interviews, the candidates have been narrowed down to two. Both have great experience and both have a track record of great results. One is certified, and one is not. If I were the hiring manager, and again, all things being equal, I’d give the nod to the certified candidate. Why? Not because they’re certified, but because I see a candidate that values personal and professional growth and development. I see a candidate who isn’t sitting still waiting for their career to happen; they’re making their career happen.

108,000 and Growing

So there you have it. That’s my pitch for growth and development through certification. To be truthful, I wasn’t asked to write this article; I asked if I could submit this article. Why? Because from my perspective, we as LP professionals finally have something that is valuable, necessary, and affordable, yet only a small percentage of us have taken advantage of the offering. My guess is that this has more to do with lack of time than lack of desire…at least that’s my hope. But I guarantee you that you’ll never have the time if you wait for it to happen; you need to make the time. Here’s a fun fact. Did you know that more than 108,000 HR professionals have become certified in their industry? I think we have some catching up to do.

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Profile

Weis Markets 100 Years of Innovation By Adam Paul, Contributing Writer


Weis Markets

I

t’s no small feat to be in business for 100 years, much less thrive and grow, but Weis Markets has done just that. From their humble beginnings in Sunbury, Pennsylvania, Weis was founded by namesakes Harry and Sigmund Weis in 1912 as a single store. Today, Weis Markets operates 161 stores, employing over 18,000 associates with a presence in Pennsylvania, Maryland, New York, New Jersey, and West Virginia. Through its first hundred years, Weis operated during two world wars and the Great Depression, as well as the birth of aviation, the emergence of automobiles and trucks designed to ship goods, and the advent of modern communications that ties it all together. Not only is Weis an East Coast fixture and a part of local history, they are also firm community supporters, purchasing over 20 million pounds of locally grown produce annually in Pennsylvania alone and ultimately helping make their customers as committed to Weis as Weis is to the communities they serve. In loss prevention, much has changed in the last century, and Weis has been around long enough to witness the birth of everything from modern refrigeration to high-tech surveillance equipment, as well as the ups and downs in shrink that invariably accompany expansion. Weis has prospered in part due to its resilience and its ability to roll with the punches. Today it proactively anticipates and plans for a future of growth. In a time when stores are shutting down, cutting staff, and reducing services, Weis is in the enviable position of hiring, expanding, and seeking out new real estate opportunities to build more stores. And their loss prevention efforts are no exception to this amazing growth. Recognizing the need to move their loss prevention efforts into the 21st century, Weis Markets recently hired veteran LP executive Michael Scott Frost, Chief Financial Officer Limauro to step in as vice president of loss prevention. Why Limauro? “We were looking for a leadership quality that would provide a clear direction to the company’s LP efforts and reinvigorate those tools we already had in place. Someone who could prevent shrink-related events rather than wait for them to happen,” says Scott Frost, Weis Markets’ senior vice president and and CFO. Limauro and his team are developing and implementing a new strategic plan that targets the root causes of shrink. It’s a comprehensive approach that focuses on all aspects of the business relating to potential loss. No stranger to the loss prevention industry, Limauro comes to Weis as a career LP executive holding an

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Mike Limauro, Vice President of Loss Prevention

If It Ain’t Broke…

undergraduate degree in criminal justice as well as a master’s degree in private security management, and also has extensive experience in a variety of different retail environments. Limauro’s LP skills were honed on the sales floors of such retail fixtures as Shop Rite, Neiman Marcus, SUPERVALU, and Super Kmart, where he rose to the position of director of asset protection.

Limauro joined a seasoned LP team at Weis. Director of loss prevention Karl Beagle, who ran the LP department before Limauro, oversaw a capable group of professionals. But in recent years, under the leadership of company CEO David Hepfinger, Weis has looked to increase its team’s capabilities. Beagle says, almost introspectively, “We asked ourselves if there were ways to improve our LP program so that it would directly enhance our company’s bottom line. What works today…and what worked yesterday… Karl Beagle, Director may not be the right of Loss Prevention approach for the future.” It’s a very valid question for a hundred-year-old company to ask. Limauro and Frost agreed they needed to expand LP’s core responsibilities. Like many organizations, Weis’s LP efforts were geared primarily to store security and fraud prevention, constantly on the lookout for shoplifters. If a crime or theft occurred, Weis LP personnel would begin an investigation, often reacting to problems and challenges rather than anticipating them. To Weis, loss prevention meant external theft, and its LP workforce was quite simply geared toward that. Dan Dan Koch, Vice President Koch, Weis’s VP of fresh of Fresh Merchandising |

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Weis Markets merchandising adds, “Our LP program was centered on theft rather than shrink control. We spent lots of time overseeing potential thievery, but never generated an actionable dollar amount in savings by having all these LP people on staff.” This isn’t to say that a chain the size of Weis can afford to ignore external theft; preventing it is a permanent part of doing business in a retail environment. Each grocery store carries a host of high-dollar items attractive to shoplifters and organized criminals, including ORC staples such as teeth-whitening strips, razor blades, and baby formula. But external theft was only part of each store’s overall loss. External theft was present and relevant and always needed attention, but there were other things that also needed attention that directly affected shrink, but didn’t fall under the loss prevention umbrella until now. So why shake things up after a hundred years? “Innovation is not new at Weis,” says Limauro. “I believe much of the company’s longevity comes from its ability and willingness to change. Moving forward is relatively easy when you have the support of your entire organization.”

A New Program with Structure

Limauro describes the new LP efforts at Weis like a pyramid of building blocks. At the base of the pyramid are

KEY_002_Final_Outlines.indd 1

Original Weis Pure Food Store circa 1912 – 1913.

physical security, basic controls to prevent shrink, as well as the corporate culture and people required to keep shrink in check. This is the broadest area, the place where much of the company’s resources are focused. A little higher up on the pyramid are corporate policies, the sorts of measures that are supposed to further prevent shrink by means of procedures and directives. The next section emphasizes execution, compliance, and inspection. This segment is designed specifically to ensure all of the elements below are functioning as expected.

LP Magazine | March - April 2012

2/24/11 11:26 AM

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Weis Markets Higher up is accountability—the mechanism that keeps staff accountable for shrink and responsible for preventing it. All the way at the top or cap of the pyramid is a small sliver of resources—the reaction portion. This is where the company places focus on internal and external theft. “If the pyramid is turned upside down, it cannot stand,” explains Limauro. The Weis team wanted to reorient its priorities. Previously, it had a large investigative and external-theft component to its LP organization where most of the LP dollars were spent. While that LP model mirrored other conventional retail organizations, Frost and Limauro wanted to focus on overall store shrink, particularly in perishable departments. “The biggest areas of opportunity were in the deli and produce departments. People aren’t stealing the produce,” Limauro states. Our previous program was having very little impact on this kind of shrink. “Theft and organized retail crime were just a slice of the shrink pie, but one that we were devoting significant resources to,” says Limauro. “Our LP program needed to be much more preventative than reactive,” agrees Frost, the CFO. Limauro and his team developed a bold, yet simple, plan that focused on all the sources of shrink, including the ever-present external theft, but also new areas such as food safety and risk management; in short, all the areas where Weis could lose significant amounts of money. Beagle and Limauro set about revamping the entire LP organization. In the nine short months that Limauro has been with Weis, the LP department has morphed into a versatile team with a more strategic approach. It is focused on the culture of selling at a profit, a culture where the elements of increasing sales and reducing shrink are viewed as one big picture. Beagle and Limauro’s plan set about a massive reorganization of LP resources, and most everyone’s job description was recreated to reflect the change in attitude. Many loss prevention team members were promoted, and paired one-on-one with district operations managers, creating a partnership that enabled them to effect positive change. These new district loss prevention managers were now just as concerned with refrigeration efficiency as they were with boosters, just as careful to control spoilage in produce as they were cognizant of the Rob Wynn, Regional Director of Loss Prevention threat of shoplifters. “Our people are business professionals,” says Limauro, which sums up the corporate culture shift nicely. Limauro refers to Weis’s loss prevention personnel as business professionals who are engaged in reducing shrink through a better understanding of the overall

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business. Weis has targeted resources to teach and train all Weis associates into a culture capable of reducing loss, not simply looking for the next thief. It’s an important change, and one, which on the surface, would seem to be a big leap for a hundred-year-old organization to make. But it’s been a successful transition. Weis’s shrink is beginning to improve, and now there are multiple parties within Weis…not just LP folks…with the common goal of keeping it that way. Weis also has two new LP positions—regional directors of loss prevention. Limauro was committed to hiring top-notch talent and investing in them to ensure the department’s success. Limauro recently appointed industry veterans Chris De Tray and Rob Wynn to fill these critical roles. The impact was immediate. “We’re now spending time and money in the right places,” Limauro says of the new methodical approach to ensuring the right resources are directed to all aspects of the shrink problem. Weis’s LP team has also forged a strong bond with the company’s store operations team. In some companies, LP professionals tend to butt heads with Mike Mignola, Vice President of Operations operations folks simply because they have different goals—operation’s focus on selling more and LP’s focus on losing less. Wars have been fought internally in some companies over LP personnel wanting to lock up high-dollar items, much to the chagrin of operations. It’s not like that at Weis. Mike Mignola, vice president of operations, states, “Mike Limauro and I meet every Monday, and talk about the prior week, as well as our expectations for the next week. We talk about all the issues we’re facing, and Mike is very up front about his needs. If we need to consider doing something like locking up some product, we make that decision as a team so that we don’t send a mixed message to everyone else.” Another operations executive, Dan Koch, VP of fresh merchandising, describes the LP-operations teamwork like this: “I’ve been in the industry for close to thirty-one years and have never seen this kind of Chris De Tray, Regional partnership with LP.” Director of Loss Prevention

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Weis Markets

Old Company, New Technology

If you get the impression that Weis has forgotten about good old-fashioned security and crime prevention, you’d be wrong. Limauro’s effusive about the slew of technological initiatives at Weis, bringing it firmly into the future of LP. Weis marches to its own drum, wary of change simply for change’s sake. LP technology is not something that they buy just because their competitor down the street is using it. Although Weis has undertaken some serious spending in LP technology as of late, Limauro cautions that each purchase was made only after a lengthy evaluation and screening process, as he’s loathe to spend money just to make it look like he’s doing something. CFO Frost is of the same mind. “I don’t like the word spending. We see it as investing,” says Frost as he emphasizes that an extremely thorough study of return on investment is made with each purchase. Key Control. One of Weis’s newest initiatives is the chain-wide roll out of InstaKey, an essential key-control program for managing a retail chain with 161 locations. Limauro carefully considered the competing lock-and-key programs before settling on InstaKey, which few of his major competitors use. Loss prevention collaborated with store operations, building maintenance, and InstaKey to reduce the overall number of

Meat counter circa 1948 – 1950.

keys in use at store level while meeting corporate needs for multiple store-keyed access. Instakey’s technology provides the ability to rekey a lock up to twelve times without removing cores or lock hardware, which means a lost key represents a small problem, not a multi-thousand-dollar episode that could be conceivably repeated over and over again if keys continued to be lost. Additionally, each restricted key is tracked online by a unique serial number, and key holders accept ownership via

LP Magazine | March - April 2012

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Weis Markets signature key receipts, firmly in keeping with Weis’s new culture of accountability. Cash Management. Weis is also in the final stages of testing its new cash management system—the Revolution from Tidel. More than a safe, the Tidel system eliminates the need for cash drawers. It builds the till for the day, and then recounts it when a cashier checks out so that cash shortages can immediately be addressed. It’s about as high tech as a hundred-year-old company can get, complete with biometric scanning and the ability to instantly alert the district manager via email if there is a cash issue in one of the stores. Limauro loves the system since it prevents the sorts of small losses that eventually add up to big losses, while simultaneously saving Weis money on armored car pickups, increasing accountability, and saving labor. Alarms and CCTV. In partnership with Vector Security, the Weis team has revamped their CCTV and alarm strategy, moving to high-resolution IP-based megapixel cameras so each store can instantly be monitored from anywhere. DVRs have been replaced with NVRs (network video recorder), which allows Weis to pump more data around at higher resolutions. The new model allows Vector to remotely monitor the health of Weis’s camera systems in order to provide a proactive service environment. Limauro noted these extra capabilities aren’t just for crime fighting, but for a wide range of business functions like completing safety investigations,

identifying customer traffic patterns for merchandising, and supporting operational interests such as reviewing service at the registers. Regarding intrusion alarms, the Weis team has implemented instant electronic notifications triggered by exception-based events. The process was designed specifically to help enforce store-level execution of corporate alarm standards. Vector also conducts environmental monitoring at store level to minimize the possibility of product loss due to equipment failure. Bottom of Basket. In an effort Family shopping to squash bottom-of-basket (BOB) in 1965. losses, Weis has also implemented the LaneHawk system. With a smart camera placed at each cashier lane, the LaneHawk system identifies items placed at the bottom of the shopping cart that could be missed by cashiers due to either customers who forget to place them on the conveyor or who are intentionally trying to pilfer them. The system seamlessly interfaces with the current POS system—it can detect an item even if it’s mostly obscured—and then feeds that item back to the POS system, alerting the cashier that the item is onboard and prompting them to add it to the bill. It’s a forward-thinking system and crucial to Weis’s commitment to reducing sources of shrink throughout the store. Counterfeit Bills. Fraud Fighter rounds out Weis’s recent LP initiatives. Limauro explains that this system is just another way to deter counterfeiters and show expense line improvements on the P&L statement. Considering counterfeit pens are expensive and don’t work against, for example, $5 bills that have been bleached and reprinted as $100 bills, Fraud Fighter creates an easy-to-use way for cashiers to immediately test the integrity of incoming cash, traveler’s checks, credit cards, and certain forms of identification.

The Next Hundred Years

In case one is under the impression that Weis is simply buying up high-tech gadgets, Limauro points out that several high-profile programs in place at other retailers have been discontinued at Weis. “Sometimes leading the industry can mean discontinuing programs as well,” he says pragmatically. Karl Beagle concurs. “We want to be a leader in loss prevention efforts, but these efforts aren’t just about using new technology,” says Beagle, “it’s also about fully utilizing your people and resources in a way that reduces overall store loss and increases the company’s profits.” The partnership between LP and the rest of the operation is also firmly cemented. “I’ve been in the industry thirty-two years,” says Mike Mignola, VP of operations, “and have seen a lot of LP structures. The big difference here is that we are a Weis store 49 manager Garry Lytle (left) with district operations manager Andy Strevig.

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continued on page 54 |

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Weis Markets continued from page 52

true partnership focused on preventing shrink and driving sales at the same time. They realize the higher we elevate sales, the better we are at the end of the day, and Mike and his team have fully embraced this concept.” Dan Koch, head of fresh merchandising, is also pleased with the new relationship. “Everyone thought of LP as the security ensemble that was engaged in trying to catch thieves,” explains Koch. “Mike and his team have opened up the books on what they are trying to accomplish, which is helping us achieve our gross-margin goals. Mike has also created a new level of respect within the company for LP. He has removed the adversarial nature. Our merchandisers want to work with them and understand that LP helps us deliver a fresher product along with increased sales and profits.” Beagle and Limauro are thrilled with the progress that Weis has been making in reducing shrink, as is Weis’s leadership. CFO Frost notes, “Mike and his team have done an excellent

job thus far.” Today, Weis Markets has a streamlined and holistic approach to LP. This sort of corporate culture change is a testament to the resilience of a company that, despite its age, can easily and fluidly adapt to changing methods, technologies, and markets, and thrive in the process. It’s likely the original Weis brothers would hardly believe where their humble single-location market would be a hundred years in the future…or even if the company would still exist. But Weis’s commitment to innovation and adaptation has brought it to where it is today. And Beagle and Limauro are confident their recent initiatives will help propel Weis onto another very profitable hundred-year journey. ADAM PAUL is a business writer based in Los Angeles, California, and an ongoing contributor to LP Magazine. He can be reached at AdamP@LPportal.com.

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Evidence-Based LP

A Huge Collaborative Effort N

o one person or company can do it all by themselves. And loss prevention or asset protection is no exception. LP professionals must plan for and combat internal and external theft and fraud, gross negligence, unintentional loss and shrinkage, computer attacks, travel and shipping crimes, natural and manmade disasters, injuries, and a host of other contingencies. To do it right means being cutting-edge. Like physicians, LP leaders need to be up-to-date on understanding crime and loss causal mechanisms (how stuff really happens), as well as the latest scientific and financial evidence on preventive measures. Fortunately this magazine and others, as well as associations like the Food Marketing Institute, Retail Industry Leaders Association, National Retail Federation, Retail Council of Canada, and others, including local and regional organized retail crime gatherings, help retailers with common problems meet with their colleagues and solutions partners to share ideas and experiences. It was in that vein that ten leading retail LP senior executives formed the Loss Prevention Research Council (LPRC) back in 2001. As you hopefully know by now, LPRC was designed by these visionary LP professionals to provide real-world innovation and scientific evidence to expand on anecdote and benchmarking. The LPRC’s board of advisors has structured the organization to support its members by sanctioning rigorous, but user-friendly research to be fed out to members in multiple formats.

Basecamp

All LPRC projects, committees, and working groups communicate and post images, video clips, reports, spreadsheets, and documents using their assigned virtual workspace on LPRC’s project website called Basecamp.

Working Groups

A key way many LPRC members collaborate with each other on problems and solutions, while planning needed research, is through participating in standing working groups. These working groups are led by two retail members, and include multiple retailers alongside solutions providers, product manufacturers, and LPRC scientists and project managers. Working groups are formed around a specific, critical asset protection need. The following four current groups are actively working their issues.

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by Read Hayes, Ph.D., CPP Dr. Hayes is director of the Loss Prevention Research Council and coordinator of the Loss Prevention Research Team at the University of Florida. He can be reached at 321-303-6193 or via email at rhayes@lpresearch.org. © 2012 Loss Prevention Research Council

enefit Denial Working Group headed by Best Buy’s B Tim Fisher and Walmart’s Dain Sutherland. ■ Predictive Analytics Working Group headed by Sears Holdings’ Carlos Bacelis and Big Lots’ Kevin Wolfe. ■ Video Analytics Working Group headed by Bloomindale’s Fred Becker, Rite Aid’s Bob Oberosler, and Big Lots’ Richard Thompson. ■ Packaging Innovation Working Group headed by OfficeMax’s John Voytilla and Shannon Hunter along with Jeff Kellogg of MeadWestvaco. Each working group sets its own mission statement, objectives, process, and resources, and holds regular conference calls, meets at locations, uses its Basecamp virtual workspaces, and generally makes things happen via small pilot testing and by sanctioning broader research and development. ■

StoreLab

I’ve discussed LPRC’s virtual innovation program called StoreLab in this column many times, but the program is designed to use working stores and DCs to closely examine, tweak, improve, test, and determine crime and loss control effort strengths and weaknesses. LPRC uses these sites across the U.S. to learn how things work and fail, how shoppers respond, how offenders perceive and react to single and multiple cues, plus how employees use and would improve efforts. We learn basic and advanced things in these “laboratory” sites, and prepare protective interventions for larger-scale evaluation. Key StoreLab successes include the now widespread use of enhanced public-view monitors or ePVMS. LPRC started looking at moving PVMs into merchandise display areas approximately four years ago in our Gainesville, Florida, CVS/pharmacy StoreLab location. Based on feedback from offenders in that store and our Publix Super Market StoreLab store, we began to reduce PVM size to place it closer to high-loss items, and then add lighting and noises to help would-be offenders locate, identify, and “fear” this critical cue—hence these enhancements became known as ePVMs. We have since conducted five collaborative, large-scale randomized controlled trials (RCTs) or field experiments with ePVMs, finding them both efficacious and cost-effective in each case. The shopper intercept data alongside employee and

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offender feedback provides members with credible, actionable white papers to secure funding and deployment support.

Research Projects

Maximize Cash Flow

LPRC has conducted over sixty-five research projects over the last decade, but many of these have been highly collaborative with as many as eight retail chains involved, alongside multiple solutions providers and high-risk product vendors. Projects include: ■ Learning what protective interventions most store managers would need to give them the confidence to openly display high-risk items and how offenders search for vulnerable areas; ■ Whether ePVMs, safers/Keepers, enhanced CCTV domes, secure display fixtures, special peg hooks, and brightly-colored EAS tags are effective at controlling loss, to name just two. Project grant funds have come from several foresighted companies, including Bacardi, Abbott Nutrition, Sears, SUPERVALU, CVS/pharmacy, Publix, Kroger, Advance Auto, and P&G, as well as technology and deployment support from solutions providers, including Alpha, CCI-Cam Connections, Clinton, FFR-DSI, InVue, Medeco, Retailers Advantage, and Rock-Tenn. Collaborative projects continue at LPRC.

Impact Workshop

LPRC has put out research findings and discussed implications at Impact conferences now for over six years, with the next one scheduled to be hosted by the University of Florida this coming October 15 – 17, 2012, in Gainesville. This year’s workshop and conference promises even more collaboration via multiple breakout groups and interactive sessions and case studies.

Upcoming Action Groups

With so many retailers joining LPRC, the board of advisors voted recently to expand to add retailer action groups of like chains, including: ■ Small-box specialty retailers like Kay Jewelers, Jared, T.J.Maxx, and Marshalls; ■ Big-box merchants like Best Buy, Office Depot, Pep Boys, AutoZone, Advance Auto, Lowe’s, Home Depot, Cabela’s, and Dick’s Sporting Goods; ■ Department store chains like Sears, Kmart, Walmart, AAFES, and Bloomingdale’s; and ■ Supermarket/drug store retailers like Walgreens, Rite Aid, CVS, Publix, SUPERVALU, Kroger, and Wegmans. These groups will tackle similar problems, while commissioning StoreLab innovation and rigorous field research alongside their many solutions partners.

Ongoing Collaboration

Making retailing safer and more profitable is a major undertaking requiring real research and a ton of collaboration. Fortunately retail publications, conferences, associations, and executives are stepping up to tie together problem solvers, alongside practitioners and solution developers. At LPRC we are striving to play a key support role to our members and the industry.

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The Right Combination

LP Magazine | March - April 2012

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LEADERSHIP by Krista Osborne, CPP

What Is Your Leadership Brew? W

hatever your chosen profession, regardless of position, title, or rank, you have a unique “Leadership Brew.” Your leadership approach will inevitably be comprised of a lifetime of experiences—the good, the bad, and the ugly. Your approach will be built from bits and pieces of people you admire from your personal and professional life, who you happen to have resonating chemistry with, and how they inspired you or made you feel. Your Leadership Brew is also roasted with the core beliefs of who you are as a person. You cannot separate them from the blend, and they are vital to the recipe. I am one of the fortunate ones. I work for a company that is grounded in a clear mission, with guiding principles to fulfill that mission, and real-life culture that mirrors my own belief in the quality of the human interface. The Starbucks mission states: “To inspire and nurture the human spirit—one person, one cup, and one neighborhood at a time. This is accomplished through principles of how we live that every day.” In my experience the most successful Leadership Brew has passion, consideration, respect, and dignity at its core. As leaders with that foundation, you naturally empower others to lead by connecting with them in a genuine and meaningful way. Throughout my career the most impactful Leadership Brews I have experienced have a few characteristics in common— flexibility, adaptability, consistent delivery, and finally unwavering demonstration of dignity, respect, and honesty. It’s personal.

Adapt

Human beings are fragile, yet resilient, and amazingly flexible. If presented with stressful conditions, depleted resources, and points of deprivation, we can still survive and, in some instances, thrive by adapting. Genuine, consistent leadership in times of transition or change becomes a pivotal point between success, failure, and traction despite times of uncertainty. Leadership structure and delivery is part of an individual’s psychosocial DNA and, by default, his or her Leadership Brew. Attempts to change basic leadership DNA structure often result in failure or dysfunction, much like abnormal chromosome structures within a cell. If a leader tries some minor adjustment to her style and is successful, those new techniques will be incorporated into her DNA. That adjustment can make her Leadership Brew much more impactful because she is willing to adapt. These adjustments are typically minor, yet better suit the current environment.

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Ms. Osborne is currently international director of loss prevention and supply-chain safety for Starbucks Coffee Company. Prior to joining Starbucks, she spent eighteen years in law enforcement in Washington State. Osborne earned both Master’s and Doctorate degrees in administration and management from Columbia Pacific University. She is a member of ASIS International, sits on the steering committee for OSAC’s Pan-Asia Regional Council, graduated from the International Security Management Association’s advanced leadership course at Georgetown University, and earned a certificate in terrorism studies from the University of St. Andrews. Osborne can be reached at 206-318-4639 or kosborne@starbucks.com.

Be Consistent

Generally, an individuals’ leadership delivery will be surprisingly consistent regardless of situation or setting. Just like any other pattern of human behavior, veins of leadership run deep. We often come across those who attempt to emulate a variety of leadership styles that they have read about in the most current publication or witnessed themselves. Most often it seems the attempts at leadership shift through this type of experimentation are not successful, recognized easily by most.

The most successful Leadership Brew has passion, consideration, respect, and dignity at its core. As leaders with that foundation, you naturally empower others to lead by connecting with them in a genuine and meaningful way. A secondary, not necessarily positive, impact to an attempt to significantly modify your internal Leadership Brew is the further dilution of exactly what the leader’s core style, or unique brew consists of. This will be demonstrated by awkward, not genuine, exchanges with those who are to be the recipients of leadership.

Keep It Personal

The most effective leadership styles I have been exposed to have been reflective of who that leader is as a person and are extremely personal to that individual. The way they connect with others creates natural capillary action. People are drawn naturally to them without effort. Their direction and guidance looks and feels natural because it is a mirror of how they are inherently. Each one of us has the unique opportunity to create our own blend, our own unique Leadership Brew, by simply being who we are. Much like a great cup of coffee, you recognize the quality through sensation—the smell, the taste, the experience—at times hard to put into words and impossible to replicate. Soak in the aroma of your own Leadership Brew, and share it with the world.

|

LPportal.com


Feature

How Public-Private Partnerships Are Changing Community Policing By Chief Raymond D. Schultz and Karen G. Fischer


Public and Private

T

he recent economic downturn has had a significant impact on law enforcement nationwide. According to a 2010 publication from the Police Executive Research Forum entitled “Is the Economic Downturn Fundamentally Changing How We Police?” the average budget cut experienced by many police agencies is approximately 7 percent. In spite of cuts in pay, furloughs, layoffs, and the dissolution of specialized units, police agencies are still expected to provide the same level of quality public safety services as they did during times of economic vitality. How can the quality of the law enforcement services provided not be impacted during these hard economic times? For the Albuquerque (NM) Police Department, the answer is that we had to change the way we police. At the Albuquerque Police Department (APD) we have accomplished this by engaging our community.

An Eye-Opening Beginning

When we started down this road in 2006, we were not facing the current economic crisis. We began this journey with the purpose of better serving our community based on the needs defined by our citizenry. We had assembled a Community Policing Steering Committee to provide direction on how we should work with our citizens. While the APD had focused on neighborhood

policing, the committee asked the question, “What about the business community?” Thus, it was our citizens who prompted us to hold a “business summit” in May 2006 where we developed our first public-private partnership that is now known as the Albuquerque Retail Assets Protection Association (ARAPA). In conjunction with some of the loss prevention professionals employed by retailers such as Target, Walgreens, and Smiths, we held our initial ARAPA meeting to exchange information about crime impacting the retail sector. Our law enforcement personnel gathered toward the back of the meeting room with arms crossed, thinking they were at a meeting that would not provide anything new or different. Moments after the meeting started, this all changed. Retailers had brought photos and videos of offenders committing “their” crimes to illustrate their stories of criminal victimization. The very first case discussed was presented by Walgreens and involved an offender who was sweeping product from shelves at an area store, walking out with hundreds of dollars in merchandise. After seeing the photo of the suspect, one of the officers in the back of the room stood up and stated that he had investigated the same guy for an auto burglary the previous week. At this point arms in the back of the room became uncrossed, and the basis of the ARAPA partnership began.

Information Sharing

Members of the Albuquerque Police Department’s Organized Crime Unit include (front row from left) Det. Al Velarde, Sergeant Mizel Garcia, Det. Lawrence Saavedra, (back row from left) Detectives Scott McMurrough, Vicente Alvarado, Jerrod Pelot, and Dakota Moore.

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After establishing the foundation for this public-private partnership, the next hurdle we faced involved improving communication and information sharing between law enforcement and retailers. It was after ARAPA received recognition as a “Best Practices in Community Policing” by the International Association of Chiefs of Police (IACP) in 2008, that Target Corporation provided the initial funding for a web developer to work with us to create the web-based, real-time crime alert system we now call CONNECT, which stands for Community-Oriented Notification Network Enforcement Communication Technology. The philosophy behind CONNECT establishes that in order to improve public safety, we have to employ proactive methods for our private-sector partners to be engaged in addressing community safety needs. In a traditional police response to crime, victims call police when a crime occurs and an officer is dispatched to take a police report. The report is written, filed, and approved via police procedure and, at some point in the coming week or more, the case is assigned to a detective for follow-up. Prior to ARAPA and CONNECT, our detectives and retail personnel would both be investigating the same offender for different crimes and not be working together, thus they would not be linking the offender’s criminal activity. With the public-private partnership model, loss prevention personnel are accepted as crime fighting partners. Through CONNECT’s real-time information-sharing technology, we level the communication platform by recognizing that police can no longer be a community’s sole response to dealing with crime and public safety issues. By allowing our community to be equal partners in APD’s crime-fighting strategy, we expand the resources available to us to fight crime, which becomes a force multiplier in addressing Albuquerque’s public safety needs. |

LPportal.com


Public and Private It is noteworthy that this public-private partnership model has been replicated in over fifteen additional jurisdictions across the United States to include: ■ L AAORCA—Los Angeles Area Organized Retail Crime Association, ■ C CROC—Cook County Regional Organized Crime Taskforce, ■ W SORCA—Washington State Organized Retail Crime Alliance, and ■ H IORCA—Hawaii Organized Retail Crime Association.

Institutions Security Officers Association), CICA (Construction Industry Crime Alliance), and Hospitality partnerships. Each of these partnerships utilize CONNECT via a secure industry-sector communication system, with law enforcement being able to see the overlap of incidents between each industry. By using this system, it quickly became apparent that there was an overlap of criminal activity between each sector partnership, with the same offender linked to incidents in each.

Other Business-Sector Partnerships

Identifying property-crime offenders involved in serial criminal activity has been a focus of the Albuquerque Police Department since 2005. Property crime constitutes 85 to 90 percent of the Part 1 Offenses reported for most communities. However, property crime is often viewed as a victimless crime, making it easier for offenders to re-victimize. The often-cited 80-20 rule for offenders says that 20 percent of offenders commit 80 percent of the crime. By concentrating on property crime and those offenders involved with these crimes, law enforcement is able to identify criminals committing multiple offenses. In receiving the incidents from each of our private-sector partnerships, it quickly became apparent that those offenders victimizing each of our partnerships were the same as those who were stealing cars, breaking into houses, dealing drugs, and committing other crimes impacting Albuquerque’s community.

Because the purpose of ARAPA and CONNECT is built on the foundation of law enforcement and private-sector partnerships, the APD began to consider other business sectors where crime prevention could be enhanced by a shared vision for community public safety. During presentations at business-sector networking meetings, APD representatives would speak about new initiatives the department was implementing with the business community, including the ARAPA partnership and the CONNECT website. Business leaders outside of retail who heard these presentations began asking APD to consider bringing in their business sector into a similar sector-based partnership. Based on these requests, the APD began working to establish public-private partnerships with the financial, hospitality, and construction industries, which have turned into the FISOA (Financial

Identifying Serial Criminals

LP Magazine | March - April 2012

61


Public and Private

“The private-public partnerships that we have created from CCROC have developed unprecedented successes, not just in the Chicago area, but in the Midwest and nationally. We are able to work and share ideas with Albuquerque and Los Angeles. Locally our partnerships combine the resources and expertise of the private corporations with the powers of law enforcement and the prosecutor’s office. These partnerships have allowed us to have long-term investigations and be proactive. The sharing of intelligence and trust in partnerships have brought us light years from where we were before we got organized. Our investigations are better, we have lobbied and passed better ORC laws, and educated the criminal justice system on the expanse and sophistication of these criminal enterprises. Only together can we be as successful as we can be.” - David Williams, Cook County Assistant State’s Attorney and Executive Director of the Cook County Regional Organized Crime Task Force (CCROC)

One case that speaks to serial criminal activity is illustrated by an offender by the name of Brian, who came to the APD’s attention as an unidentified offender linked to separate felony-level shoplifting incidents from Home Depot, Target, Walmart, and Lowe’s. During the same period of time, APD received information and a photo from a hotel partner of an offender who had taken a guest’s laptop from a hotel room while it was being cleaned by housekeeping. Though the follow-up on these incidents, it was determined that the same offender was involved in criminal activity in both the retail and hospitality sectors.

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Without the hospitality-sector partnership, it is unlikely that the offender activity would have been linked to the offenses committed against retailers. However, with the multiple sector partnerships, we could now connect the offender to crimes in more than one business sector. It is also important to note that Brian’s criminal history includes arrests for offenses such as possession of drugs (methamphetamines), drug trafficking, receiving/transferring a stolen vehicle, fraud, commercial burglary, and assault on a police officer.

Organized Crime Unit

At the end of 2010, we could see that Albuquerque’s overall Uniform Crime Report (UCR) Part 1 crimes were down 16.2 percent from 2008. Through a number of departmental efforts, we have seen a positive impact on crime in Albuquerque. [Authors’ Note: Since official 2011 UCR figures were not available at the time of this writing, they cannot be appropriately referenced for this article.] Our public-private partnerships are one of the programs that have influenced the decline of crime in Albuquerque. Additionally, the success of our partnership initiatives is not only linked to crime statistics, but also to participation, awareness, and satisfaction with police services. Prior to the establishment of our partnerships, one of the complaints from our private-sector partners was that they did not know if anything had resulted from their filing a police report. By the summer of 2011, we were able to identify and track increased satisfaction with APD services brought by our partnerships, but still were looking at ways to further improve our commitment to their work. APD already has investigative teams dedicated to follow-up on criminal activity via “traditional” police reporting means and for dispatched calls for service. One “service gap” discussed with our private-sector partners was that existing APD units were too compartmentalized and busy with other assigned tasks to focus on the investigations forwarded by them. We began to consider how APD could improve the coordination and investigation of crimes brought to our attention via our partnerships. The follow-up and linking of offenses illustrated in the case discussed above of Brian was not the type of case follow-up that the APD was able to provide to support the partnerships on an on-going basis. In September 2011 the APD initiated a new investigative unit as a pilot project and created our Economic Crimes Section to include a specialized Organized Crime Unit (OCU) made up of one sergeant and between four and six detectives who work in an undercover capacity. The focus of detectives assigned to this squad is to follow-up and investigate offenses brought to our attention via our private-sector partners. In just the first four months after establishing this pilot project, OCU detectives were able to focus on the criminal activity impacting our public-private partnerships. Through the ensuing investigations, OCU detectives made over fifty arrests for criminal activity resulting from the communication and follow-up enabled by these partnerships. In turn, these continued on page 64 |

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Public and Private

“Gap Inc. has established a best-in-class partnership with the Albuquerque Police Department. Starting with the ARAPA network and now the newly formed Organized Crime Unit, APD and Gap stores in the city of Albuquerque are working together to help keep our customers, employees, and stores safe. APD has worked with lightning speed to close pending organized retail crime cases that we have reported. The OCU hit the ground running and is making a huge, positive impact to the retail community as a whole. This public-private partnership will serve as a template going forward for Gap stores across the U.S.”

continued from page 62

arrests resulted in sixty-seven cases that have been forwarded to our district attorney’s office for felony prosecution. Following are two examples of cases that were developed via investigations by the OCU.

Rodney’s Return Fraud Ring

Since 2007 Home Depot loss prevention personnel were monitoring receipt fraud associated with an offender who would select various types of high-dollar merchandise that was small enough to be pushed under the large gates in the back of the outdoor garden area. This offender has also been linked to other persons who would return the items and in many cases receive a Home Depot gift card with the amount of the store credit. To use these cards, the offenders would also search store parking lots for discarded receipts with items purchased with cash, check, or debit card, knowing that purchases on a credit card could be tracked. They would then use the store credit to purchase items on the receipt, and go to another store to return the items for cash. Via this elaborate theft scheme, it is estimated that the offense ring was stealing thousands of dollars each week. The frustration for Home Depot’s loss prevention personnel was they could identify the illegal activity, but were having a hard time getting law enforcement to do the follow-up investigation because the offenders were hitting the six Home Depot stores in the Albuquerque metropolitan area, two of which were outside APD’s jurisdictional boundaries. It is also important to note that the offenders would often steal items below the $500 felony-theft limit. Thus, this illegal activity was “flying below the radar” for law enforcement to address because it was “just a misdemeanor shoplifting” offense. This activity continued with little follow-up until OCU was developed in 2011. With the creation of OCU, we now had law enforcement personnel dedicated to addressing the serial offenders who came to our attention via our private-sector partnerships. Within the first few weeks of OCU’s deployment, we were able to follow-up on these Home Depot thefts and build a case against an offender named Rodney. OCU found that the other persons linked to this return-fraud scheme were, in fact, homeless individuals that Rodney would pick up at shelters and offer a cut of the money from the thefts. By using different persons when he made the purchases and returns, Rodney was minimizing the ability to link him to his theft scheme. In the six months prior to his arrest, Rodney’s ring was responsible for approximately $11,000 in theft from Home Depot and $14,000 from Lowe’s. In reflecting back to 2007, it is probable that this ring was responsible for over $200,000 in theft. Upon his arrest, Rodney was charged with the following felony crimes—criminal solicitation (22 counts), larceny over $500, and fraud over $2500. This case awaits adjudication. Beyond this arrest, Rodney’s criminal history dates back to 1996, with over forty arrests, including armed robbery, aggravated battery on a household member, false imprisonment, aggravated fleeing from law enforcement, possession of a

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- Nelson Harrah, Director of Organized Retail Crime, Gap Inc.

controlled substance (methamphetamine), and child abuse. Rodney admitted to using the money from these thefts to buy drugs.

Justice for Johnny and Justin

In April 2011 ARAPA partners were notified of an incident at a local freight company where a duo by the names of Johnny and Justin were identified for theft. Both offenders could also be linked to several shoplifting offenses, including attempting to steal 9mm ammunition from a Sportsman Warehouse. Since this time, Johnny and Justin have been tied to offenses at JCPenney, Home Depot, Bed Bath and Beyond, Kmart, and Gap. Johnny’s criminal history includes charges for armed robbery, auto burglary, unlawfully carrying of a weapon, larceny, drug trafficking, drug possession, battery, and numerous arrests for misdemeanor and felony shoplifting. Justin’s criminal history includes more than one charge for auto theft, criminal damage to property, possession of burglary tools, larceny, and a number of charges for felony and misdemeanor shoplifting. continued on page 66 |

LPportal.com



Public and Private continued from page 64

In January 2012 OCU arrested Johnny and Justin for shoplifting at a Kmart store. When this boosting team was approached by loss prevention personnel, they stated to the store associates that they had a gun and would kill them. Upon apprehension, a firearm was not found on either offender. During the follow-up interview, OCU detectives asked the offenders why they committed the crimes and were told that they do the crime to get money to buy drugs. One of the offenders also provided some insight into the word on the street regarding OCU and the investigations this unit is conducting. He said, “Honestly I’m scared to even go out and do this anymore. I’m scared to even steal anything because there is this new unit out there that is just for this stuff. They are finding and taking everybody to jail.”

Beyond the Arrest

Following an arrest, a case has to proceed through the criminal justice system, and, thus, it is imperative for involvement from our area prosecutors. An additional positive effect that has resulted from our partnerships includes increased cooperation and communication between law enforcement, private-sector partners, and prosecutors in the Second Judicial District Attorney’s (DA) Office. This cooperation has increased successful case closure via the court system. The below data reflects the number of felony prosecutions for cases that have been closed by the DA’s office resulting from ARAPA-based cases.

Adult Felony Prosecutions (Cases Closed) for ARAPA-Linked Cases 2006

2007

2008

2009

2010

2011*

471

339

457

471

556

315

*Additional cases will be added when they are through the adjudication process.

The support from our partnerships continues through to the sentencing of offenders. With APD and community members in the courtroom, we have seen significant sentences for these offenders and have even had defense attorneys ask us about the case for which we were in the courtroom, fearing that should we be in court for their client that “their client could be in trouble.” The reason for their worry is the length of sentences given to offenders, with the most significant sentence for a property-crime offender being 70 years, with 50 years suspended, but 20 years in the department of corrections. APD’s public-private partnerships are built on a foundation of community involvement that begins at the point that a crime comes to our attention, through to sentencing of the offender. The fortitude for community public safety that is built through these partnerships is well summarized by ARAPA’s co-chair representing the retail sector, Craig Davis, senior investigator for Target: “At the heart of the ARAPA program is trust and partnership. It goes beyond communicating through a website or once a month at a meeting. It’s a business relationship between the detectives and the retail ORC investigators,

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meeting almost daily in one way or another to exchange ideas, share intelligence, and collaborate on the next steps needed to move a case along. These strong partnerships lead to quick case closures, a better understanding of the scope of activity committed by the offenders, and ultimately a safer community, as a result of the prosecution of hundreds of felony offenses.”

Expanding Crime-Fighting Resources

As mentioned at the beginning of this article, the country’s economic crisis has had a significant impact on both government and business. During this time of budget crisis, how do communities afford to implement initiatives like ARAPA that require additional resources? Our response is, “How can you afford not to engage your community?” With the financial cutbacks in police budgets, law enforcement think tanks assert that it will be decades before we restore our staffing levels…if at all. For APD our private-sector business partners are equal partners in how we fight crime. Whether retail, construction, hospitality, or banking, all of the professionals aligned with these businesses have a vested interest in a safer community. We just have to open the door and let them in. Our community is our eyes and ears for what is happening on our streets, in our parking lots, and at our businesses. Law enforcement will never have enough officers to see and hear what you can help us identify. The partnerships formed by APD have grown as a template for other agencies. “APD has demonstrated itself as a national leader in the fight against retail crimes, and city government officials throughout the country have been watching,” says Joe LaRocca, senior assets protections advisor for the National Retail Federation. “Several major metropolitan areas have taken elements of APD’s strategy. APD has built a successful track record of working with the private sector and area law enforcement agencies to proactively remove threats from their community.” Criminals are opportunists. Whether they steal from a store, break into a car, burglarize a house, or steal copper from a construction site, we can best detect their crime through collaboration. Public-private partnerships provide for a more effective means to solidify public safety. As law enforcement, the challenge is to change the way we engage our community, and to be willing to let you join our crime fighting strategies. For those in the security and loss prevention profession, your challenge is to be leaders in the process and approach law enforcement in your community. We can make our cities and towns safer if we are committed to working together. Our only failure is if we don’t even try. RAYMOND D. SCHULTZ is chief of the Albuquerque Police Department and KAREN G. FISCHER is strategic support division manager in the department. To contact the authors, call 505-768-2419 or email kfischer@cabq.gov.

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Industry News by Robert L. DiLonardo

Demonstrators Block Entrance to

DiLonardo is a well-known authority on the electronic article surveillance business, the cost justification of security products and services, and retail accounting. He is the principal of Retail Consulting Partners, LLC (www.retailconsultingllc.com), a firm that provides strategic and tactical guidance in retail security equipment procurement. DiLonardo can be reached at 727-709-6961 or by email at rdilonar@tampabay.rr.com.

[Enter Your Store Name Here]

T

oward the end of January, a few hundred protesters gathered in front of San Francisco bank entrances in the city’s financial district as part of a daylong, nationwide Occupy Wall Street exercise demanding that banks end evictions and foreclosures. Eleven people were arrested after a group refused to move from their human chain blocking an entrance to Wells Fargo corporate headquarters. Traffic was rerouted around the area, and commerce was disrupted as protesters spilled into the streets. In Greece the populace has rioted on multiple occasions since 2010 causing deaths, store lootings, and wanton destruction in the wake of government-forced austerity measures due to the country’s sovereign debt woes. Billionaire investor George Soros actually predicts in comments given recently to Newsweek that as the U.S. financial system begins to collapse, “riots will hit the streets.” Amid the possibility that these incidents could boil over into more violent situations, we should take the opportunity, thankfully in advance, to get better prepared for large-scale civil unrest here in the U.S.—a phenomenon that hasn’t really occurred here for about forty-five years. Since only those over 60 years of age were on hand for the violent and massive civil rights and anti-war protests of the late 1960s, I thought it would be a good time to look back at the

If you haven’t considered the worst-case scenario, you should do that now. As I discovered first hand, these things can erupt quickly and endanger innocent people. scale of some of those past occurrences and suggest some potential best practices in case the scenario in the U.S. becomes more violent. The objective is to get the current set of retail loss prevention and asset protection professionals to review and update business contingency plans by knowing what the “worst case” has been and could be well before anything really bad happens. Fortunately, so far, the Occupy Wall Street crowd has been tame compared to the perpetrators of two classic large-scale, long-run demonstrations that I had the displeasure of witnessing first hand.

1968 Washington, D.C., Race Riots

Five days of riots erupted in Washington, D.C., after the April 4, 1968, assassination of Dr. Martin Luther King. Civil unrest affected

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Baltimore, Chicago, and at least 110 other U.S. cities. In Washington crowds gathered in the predominantly African-American sections of the city where activist Stokely Carmichael threatened violence and incited the crowd, which began rioting in earnest that night. By the next afternoon crowds exceeding 20,000 overwhelmed the D.C. police force, forcing Vice President Hubert Humphrey to dispatch federal troops and mobilize the D.C. National Guard. By April 8 twelve people had been killed, over 1,000 wounded, and over 6,000 arrested. Additionally, about 1,200 buildings were burned, including 900 retail stores. I was a frightened sophomore in a D.C. college at the time and vividly remember the orange tint of the nighttime sky as we hurriedly evacuated the campus and tried to find a safe way out of town. The college had no contingency plan. It simply closed up shop and was vacated as soon as possible.

1969 Vietnam War Moratorium

Between mid-October and mid-November 1969, large-scale anti-war demonstrations took place nationwide. The two largest were in D.C. where 500,000 demonstrators gathered in protest to the Vietnam War. The history books say that it was generally peaceful, but there were clashes with the police, a significant disruption of commerce for an extended period of time, and a high degree of tension between the demonstrators and the authorities. I was deployed for the month, rifle in hand, on the streets of Washington as a member of the D.C. National Guard’s military police battalion. Uniformed military weren’t particularly well thought of by the crowd, but incidents of large-scale violence were rare.

What to Do?

I queried some knowledgeable retail LP professionals, who provided some useful information. While these respondents wished to remain anonymous, I provide their suggestions here to stimulate thought about your preparations for these types of situations. This information will also appear on the magazine website, LPportal.com, where you can add other suggestions. Flash Mobs ■ Keep your video system up-to-date and operating. The recordings may be valuable evidence after the fact. ■ Call the police. Notify the proper management authorities. ■ Stay away from the flash-mob participants. Do not confront, challenge, or attempt to apprehend participants. continued on page 70 |

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People on the move Mark Stinde was promoted to VP of AP for 7-Eleven.

Kirby Sabey was promoted to National LP Manager for North America and Australia for Fossil Corporation.

Tim Lapinski, CFI was appointed Director of LP for Abercrombie and Fitch.

Gap Inc./Old Navy announced the following changes: Joseph Carteret and Chad Sweigert appointed Market LP Managers and Jodie Murphy, CFI promoted to Director of Corporate Security.

Stuart Rosenthal was promoted to Director of North American Sales for Alpha. Dayna Howard was appointed LP Manager at Amazon.

Genesco announced the following changes: Anson Aflague, Rediar Mallard, Gary Grudzielanek, and Keith Landschoot were promoted to LP Managers; Ben Graves, LPQ was promoted to LP Analyst/Security; Bill Carleson, LPQ and Phil Dutto, LPQ were named Regional LP Managers; Michael Molthen was promoted to Senior LP Analyst; and Paul Weathers was promoted to VP of LP.

Christopher Perry, CFI was named LP Operations Manager for Anna’s Linens. Aaron Rogers was appointed Manager of Risk Services at Axcess Financial. William Penn was named District LP Manager at Banana Republic. Chris Farnan was promoted to LP Field Support Manager at Barnes & Noble.

Chris McGourty was appointed Multi-Unit LP Manager at Genuine Parts—Napa Auto Parts.

Bed, Bath & Beyond promoted Rich Neuman to Regional LP Manager and John Roaix to Regional Director of LP.

Chad Lancaster, CFI was named LP Consultant at HS Brands International.

Chris Holbert was appointed District LP Manager at Big Lots.

Malcolm Gaspard was appointed Territory VP LP at Kohl’s Department Stores.

Ken Scheirer was named LP Manager at Bloomingdale’s.

Don Morisette was promoted to Division LP Manager at Kroger’s.

Mark Turner was appointed Director of LP for Body Central.

Robert Walsh was appointed Security Manager at Macy’s Logistics and Operations Center.

Central Parking Systems promoted Leo Anguiano to Chief Risk Officer and named Jill Johnson Risk Management and LP Analyst.

Chris Barkis, CFI was promoted to Regional LP Manager at Marshalls.

Bill Nichols was promoted to Director of LP for Christmas Tree Shops.

National Stores named Jay Lapierre District LP Manager and Chris Nichols Regional Director of LP.

Raymond Sosa, CFI was appointed Regional LP Manager at CVS Caremark.

Dave Roberts was named Regional LP Manager at New York & Company.

Tommy Conaway, CFI was promoted to Regional Director of LP at Dick’s Sporting Goods.

Nike has announced the appointment of Joe Nekic to Director of Global LP and the promotion of Jason Shaw, LPC, CFI to Manager of LP Programs, North America.

Gus Castano, CFI was appointed Regional LP Manager at Dollar General. Jeffrey Housman was named District LP Manager at Duane Reade.

Darian Griffin was appointed Division LP Manager at Ralph’s Grocery.

Don Cummins was appointed Regional LP Manager at Forever 21.

continued from page 68 ■

ollect all associates and customers into a C group in a secure part of the store.

Picketing, Occupation, Or Rioting Revisit your company’s business continuity plan, and complete a risk assessment on each of these types of incidents. ■ If an incident occurs in the area, notify management, who, in turn, should alert the company’s emergency response team. ■

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Rent-A-Center has named Tim LePelley Divisional LP Manager and Hart Brown International Security and Crisis Manager.

ave on-site management coordinate H with local police. Monitor the situation and provide periodic updates to headquarters. ■ Review any on-site store evacuation plans, and identify rallying points. If the store is blocked, call the police. Notify the proper management authorities. Don’t engage the picketers on their “issue.” Report the number of picketers and their issue to management. ■

March - April 2012

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Stephen O’Keefe was named VP of Operations for Retail Council of Canada. Dr. Daniel Downs was appointed Statistical Criminologist at The Retail Equation. Daniel Davies, CFI was promoted to LP District Manager at Rite Aid. Kyndra Walker was appointed Division LP Specialist at Sherwin-Williams Paints. Charley Pfeiffer was named District AP Manager at The Sports Authority. Michael Karis was appointed Regional LP Manager at T-Mobile. Shane Davis was promoted to Store Team Leader at Target. Tiffany & Co has announced the following changes: Paul Hertz was promoted to NYC Retail Security, Brian Krisel, CFI was appointed Director of Regional Security, Americas, and Steven Palumbo, CFI, LPC was named Director of Operations. Steve Mick was promoted to Director of AP and Operations for Toys“R”Us. Kevin Hutcherson was appointed National Accounts Manager at Universal Surveillance Systems. Jason Jones was promoted to Director of LP and Risk Management for Vans / 7 for all mankind / Splendid / Ella Moss. Ray Masavage was appointed Senior Network Sales Engineer at Vector Security. Wes Bank, LPC was appointed Director of LP for Velocity Express. John Brea was promoted to VP of LP, Risk Management, and Aviation for Walmart Canada. Michael Burnett was appointed Senior Investigator at WellPoint.

Information for the People on the Move section is provided in part by the Loss Prevention Foundation, Loss Prevention Recruiters, and Jennings Executive Recruiting. Send information on promotions and new hires for this listing to peopleonthemove@LPportal.com.

I f picketers enter the store, ask them to leave and call the police. If your company has a set of guidelines covering these types of incident, dust them off and revisit them in the context of a much larger and more serious situation. It is important to recommunicate them to the appropriate personnel. If you haven’t considered the worst-case scenario, you should do that now. As I discovered first hand, these things can erupt quickly and endanger innocent people.


51 The # of CFIs Promoted to Vice President or Director in 2011!

Do Something To Make That List.

Visit www.iaCFI.com to find more information about the CFI Program.

CFIs attending the RILA event should stop By booth 109 to obtain their CFI Badges


ADVERTISERS 3VR................................................................54 www.3vr.com/retailguide Acadian Monitoring Services.........................23 www.acadianmonitoringservices.com ADT................................................................76 www.adt.com/video-services Alpha...................................................... 19, 21 www.alphaworld.com American Dynamics.........................................7 www.americandynamics.net ASIS International..........................................67 www.asis2012.org Axis Communications......................................9 www.axis.com/retail Checkpoint.............................................. 33, 35 www.checkpointsystems.com CISA...............................................................71 www.iacfi.com ClickIt Inc.......................................................53 www.clickitinc.com Contact..........................................................55 www.contactinc.com Corporate Safe Specialists.............................57 www.remotecashcapture.net Detex.............................................................45 www.detex.com Enabl-u Technologies.....................................36 www.enabl-u.com Epicor.............................................................43 retailinfo@epicor.com Evolution Robotics Retail...............................51 www.evoretail.com Gulfcoast Software Solutions...........................3 www.gulfcoastsoftware.com i3 International...............................................25 www.i3international.com InstaKey.........................................................49 www.instakey.com Intelligent Loss Prevention.............................37 www.intelligentlossprevention.com LERPnet2.0.....................................................61 www.lerpnet2.com LockUp...........................................................65 www.lockup.com LPC................................................................26 www.losspreventionfoundation.org Milestone.......................................................29 www.milestonesys.com Nat’l Food Service Security Council...............42 www.nfssc.com National Retail Federation..............................69 www.nrf.com/lp12 NuTech National.............................................15 www.nutechnational.com Palmer, Reifler and Associates.........................2 www.palmerreiflerlaw.com Protection1....................................................39 800-494-2197 The Retail Equation..........................................5 www.theretailequation.com Retail Industry Leaders Association...............46 www.rila.org/lp Security Resources........................................75 www.securityresources.biz Universal Surveillance Systems.....................41 www.universaleas.com Verint.............................................................63 www.verint.com/know-now WG Security..................................................16 www.wgspi.com

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Vendor Sponsors

High Theft Solutions

Vendor Advisory board 3VR Pete Schmidt Senior Director, Retail Solutions

Checkpoint Carlos Perez Senior Director, Global Marketing

Evolution Robotics Colleen Lindsey Marketing Director

Milestone Systems Trenton Thoms Retail Sales Manager

ADT Retail Solutions Kevin E. Lynch, LPC Executive Director

ClickIt Inc. Jim Paul Director of Sales

Gulfcoast Software Solutions Tim Lindblom Executive Vice President

Palmer, Reifler & Associates Jeff Welch Executive Director

Alpha Diane Wise Global Marketing Manager

Corporate Safe Specialists Ed McGunn President/CEO

InstaKey Security Systems Cita Doyle Director of Sales & Marketing

The Retail Equation Tom Rittman Vice President, Marketing

American Dynamics Carol Vardaro Marketing Specialist

LockUp Emma Mann Marketing Director

Intelligent Loss Prevention Joerg Niederhuefner Director of Business Development

Security Resources, Inc. Kris Vece Business Development

Axis Communications Jackie Andersen Business Development Manager, Retail

Enabl-u Technologies Division ISO Crime Analytics Kevin McMenimen, LPC President

LP Magazine | March - April 2012

73


Parting Words

Mentors, Vendors, and Friends

Jim Lee Executive Editor

Mentors, vendors, and friends—now there is a group you don’t often see having dinner together. But they do. More on them later, but first let me reminisce. Not long ago I was driving through rural Indiana back to my hometown. Perhaps some of you have heard of Marion, Indiana. We are known for automotive plants, high school basketball, breaded tenderloin sandwiches, and not making many changes. As I was driving into Marion I saw the General Motors plant that’s been there fifty years. Then I drove past the basketball gym, but don’t call it a “gym” to anyone in Marion. It is “the arena” and seats 7,200 and always sold out…not bad for a town of 35,000. Driving down the city streets there are plenty of bars and all of them have the infamous breaded tenderloin, fries, and a drink. I saw a few buildings that have been there for many, many years, a few new buildings, a few houses that were empty, and both old and new retail stores.

Everyone wants the same thing—a job, a future, and a fair shake. Forget the material changes in the LP business. Go find a mentor, a vendor, and a friend. They can help you get that fair shake. I parked at a drive-in restaurant that is owned by one of my high school classmates and went inside for a tenderloin and conversation. I asked my old chum, “What’s new?” His answer, “Nothing much has changed.” Sure, he mentioned changes in some material things, like a new this and an empty that. But the people, young or old, he said, all want the same things we did when we left high school—a job, a future, and a fair shake in life. Those words had been echoing in my head for weeks before they became crystal clear recently at dinner in New Orleans at the FMI conference. We were talking about changes in loss prevention over the years. The discussion was all about material changes until someone said, “Not much has changed. People want a good job, a future, and a fair shake from the company.” I was sitting at the dinner table with a few mentors, a few vendors, and some friends. That’s just the group that helps others

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with their job, their future, and helps others get a fair shake. So, I ask each of you reading this article, do you have a mentor? This issue of the magazine has a really outstanding interview with a really outstanding retail executive—Bob Oberosler from Rite Aid (see page 31). Set aside all of his personal and career accomplishments; the major contribution that Bob has made to the world of LP has been as a mentor to others. Some of those who call Bob their mentor are included in the article, but there are many others. Bob doesn’t necessarily think of himself as a mentor. He just gives people a chance at a good job, with a good company, and a fair shake at a career. We also have featured two other outstanding executives and made mention of their roles as mentors—Paul Jones of eBay and Rhett Asher of FMI (see page 42). There are many who refer to each of them as their mentors. Both Paul and Rhett have something in common—they have always had time for others. So, do you have a mentor, and do you mentor others? As I said, a couple of vendors were at that dinner table. It is my personal opinion that there are two kinds of vendors. There are those who are primarily interested in selling retailers something and wear earmuffs while trying to do so. The other kind of vendor listens and hears, and more often sells a better solution. These kind of vendor partners can be wonderful mentors, too. Lastly, around the dinner table were some friends. No one would argue that friends can be very helpful in our careers as well as mentors to us. Here is my main point on friendships in this wonderful world of LP—grow old in this profession with them. The friends you make today can be your professional friends for a lifetime. One of those friends who had his boss with him, told me later that his boss told him he was envious that my friend had maintained his friendships for years. You’ve probably heard the saying, “Keep your friends close and your enemies closer.” Forget about your enemies; just keep your friends close. So, there was my high school friend in little Marion, Indiana, telling me that everyone wants the same thing—a job, a future, and a fair shake. Forget the material changes in the LP business. Go find a mentor, a vendor, and a friend. They can help you get that fair shake.

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