May - June 2015 by Loss Prevention Magazine

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LOSS PREVENTION

MAGAZINE THE VOICE OF LOSS PREVENTION

FROM ALARM MONITORING TO CRISIS MANAGEMENT THE EVOLUTION OF WALGREENS’ SECURITY OPERATIONS CENTER

THE ATTITUDE OF SUCCESS OF MELISSA MITCHELL THE IMPACT OF MOBILE PAYMENTS ON LOSS PREVENTION ATTACKS ON POS SYSTEMS ARE HURTING RETAILERS

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CONTENTS 6 PUBLISHER’S LETTER Tweeting in Orlando By Jack Trlica

From Alarm Monitoring to Crisis Management

8 10

ON THE WEB RETAIL SPONSORS

12 INTERVIEWING It’s All about Context By David E. Zulawski, CFI, CFE and Shane G. Sturman, CFI, CPP

The evolution of Walgreens’ Security Operations Center

By Bill Turner, LPC, The Loss Prevention Foundation

28 PARTNERING WITH RETAILERS Joint ORC Investigations By Dave DiSilva, Hawken Averett, and Christian Hardman 40 CERTIFICATION An Early Education With Andrew Radak, LPC, Rite Aid

The Attitude of Success

54 DIGITAL DIALOGUE What’s the Right Path? By Jacque Brittain, LPC

A conversation with Melissa Mitchell, LifeWay Christian Stores

66 STRATEGIES Remote Connectivity: Easier, Faster, Better LP By Gerald Becker, USS

By James Lee, LPC, Executive Editor

68 EVIDENCE-BASED LP Focusing on What Offenders Think By Read Hayes, PhD, CPP 72 MY TURN One Question to Improve Your Store Visits By Walter Palmer, CFI, CPP, CFE

Mobile Payments

74 INDUSTRY NEWS Perspective on the Cost of Fraud in Retail By Robert L. DiLonardo The Fight for $15: What Does It Mean for Our Workforce? By Jacque Brittain, LPC

The new retail revolution and its impact on LP

By Lee A. Pernice, LPC, Contributing Writer

PRODUCT SHOWCASE

PEOPLE ON THE MOVE

CALENDAR

ADVERTISER DIRECTORY

VENDOR SPONSORS

82 PARTING WORDS Making a Difference By Jim Lee, LPC

Attacks on POS Systems

Hitting retailers where it hurts By JD Sherry, Cavirin Systems

MAY - JUNE 2015

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PUBLISHER’S LETTER

MAGAZINE

Tweeting in Orlando

In another executive panel, the participants ILA’s Asset Protection Conference was were asked about the value of centralized versus recently convened in Orlando. I sat decentralized LP organizations. One panelist through all the general sessions and as summarized his preference for decentralization many breakout sessions as possible. As the by saying, “Local decisions are better decisions.” magazine’s official “tweeter,” I was on the This panel also advocated for communicating and lookout for content to share with our industry training that fits the corporate culture offering followers. Here’s a sample of some of what I Lululemon as an example (see “Asteya and the thought interesting, expanded here without the Attitude of Gratittude” in the January-February restriction of 140 characters. 2013 edition). The opening keynote was from Charles In a follow-up to last year’s presentation Baldwin, chief administrative officer @Cabelas, on active shooter, Jeremiah Hart led a panel who spoke about the growing role of LP in discussion of active-shooter training videos retail. “The value that AP professionals bring produced by several retailers in the past year. One to cybersecurity is partnership, preparation, and a different mindset than IT.” On leadership of the interesting topics centered on the theme “Run. Hide. Fight.” Giving employees “permission he succinctly said, “When put in charge, to defend themselves as a last resort” generated take charge.” a good dealing of discussion. Hart’s expertise on Jamie Clarke, a professional adventurer as well as outdoor equipment retailer from Calgary this subject was the subject of our article in the July-August 2014 edition titled “Active Shooter: Is @JC_Climbs, gave an energetic, humorous talk Having a Plan Enough?” about the lessons learned from both failed and Finally, it was great to hear US Army Brigadier successful trips to the summit of Mt. Everest that he now applies to his business. “A simple elegant General (retired) Becky Halstead present her thoughts on what she calls “Steadfast Leadership” solution becomes magical with the collective (see “The First Person You Must Lead Is You” execution of the team.” And “The other side of in the September-October 2014 issue). She fear is freedom.” Speaking on the future of consumerism, Doug made numerous memorable points, including “Leadership is the fusion of heart and mind, Stephens @RetailProphet, offered his insights character, and competence. It’s okay to show into the challenge of our rapidly changing retail landscape. He said, “Retail is becoming phy-igital emotion, just don’t be emotional.” And “Effective leaders get out from behind their desks and with the combination of customers’ in-store experience with their mobile devices.” He believes circulate, communicate, and connect.” The magazine’s EyeOnLP team was the that brick-and-mortar stores are not going away, exclusive video provider for daily recaps of the but changing to meet consumer demands. In a panel discussion on the future of LP, three sessions and activities. Go to EyeOnLP.com to see the recaps as well as videos featuring many seasoned executives offered some interesting of the individuals mentioned above. You can also thoughts. One said, “Plant seeds. Don’t be afraid search #RILAap on Twitter to see tweets about to offer your ideas. Go for the yes, but expect the conference. the no. No may simply mean not now.” Another Next stop is the NRF Protect! Conference in encouraged the audience to “Embrace change. Long Beach, California, June 23 – 26 (see page Learn about new technologies. Tap into people 39). I hope to see you there. who know. Jump all in and have fun with it.” And, “Expand your sphere of influence. Go talk to those in your organization you never talk to.” I especially liked this analogy: “LP executives tend to focus on the black and white. Don’t remain Jack Trlica black and white, but create the gray.” Editor and Publisher LossPrevention, LP Magazine, and LP Magazine EU 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.

MAY - JUNE 2015

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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 EXECUTIVE EDITOR James Lee, LPC JimL@LPportal.com EDITORIAL DIRECTOR, DIGITAL Jacque Brittain, LPC JacB@LPportal.com CONTRIBUTORS Robert L. DiLonardo Dave DiSilva Read Hayes, Ph.D., CPP Richard C. Hollinger, PhD Walter Palmer, CFI, CPP, CFE Gene Smith, LPC Shane G. Sturman, CFI, CPP David E. Zulawski, CFI, CFE CHIEF OPERATING OFFICER Kevin McMenimen, LPC KevinM@LPportal.com DIRECTOR OF MARKETING Merek Bigelow MerekB@LPportal.com DIRECTOR OF DIGITAL OPERATIONS John Selevitch JohnS@LPportal.com SPECIAL PROJECTS MANAGERS Kat Houston, LPQ Justin Kemp, LPQ Karen Rondeau DESIGN & PRODUCTION SPARK Publications info@SPARKpublications.com 704-844-6080 CREATIVE DIRECTOR Larry Preslar ADVERTISING

ADVERTISING MANAGER Ben Skidmore 972-587-9064 office 972-692-8138 fax BenS@LPportal.com EAST COAST REP Kristie Thymes 972-782-9841 office 972-692-8138 fax KristieT@LPportal.com SUBSCRIPTION SERVICES

NEW OR CHANGE OF ADDRESS myLPmag.com POSTMASTER Send change of address forms to Loss Prevention Magazine P.O. Box 92558 Long Beach, CA 90809-2558 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 or call 888-881-5861. Periodicals postage paid at Matthews, NC, and additional mailing offices.

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ON THE WEB

EDITORIAL BOARD

There is a lot going on in the magazine’s digital space. Everything from original articles from LP practitioners to videos to archived webinars. Visit LPportal.com often to see the latest. 2015 Product Showcase and Resource Guide Online Our latest guide to loss prevention products and services is available throughout the year online at digital.lpportal.com/i/427973 or via the link on our homepage. Solutions providers offering everything from alarm monitoring to civil recovery to video surveillance are featured in this 16-page catalog.

2015 Product Showcase and Resource Guide

NOVEMBER - DECEMBER 2014

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LPM 1114 Book.indb 1

Leo Anguiano, LPC Senior Director, Asset Protection, Rite Aid

Karl Langhorst, CPP, CFI Corporate Director, Loss Prevention, The Kroger Co.

Jim Carr, CFI Senior Director, Global Loss Prevention, Rent-A-Center

Bob MacLea Senior Vice President, Loss Prevention, TJX

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

John Matas Vice President, Asset Protection, Investigations, & ORC, Macy’s

Charles Delgado, LPC Vice President, Asset Protection, Meijer

11/24/14 3:36 PM

RILA Asset Protection Conference Creates a Buzz in Orlando

Patti Felz Corporate Vice President, Internal Audit and Asset Protection, Polo Ralph Lauren

EyeOnLP was the official video provider for the 2015 edition of RILA’s Asset Protection Conference. If you want to see what took place May 3 – 6, visit EyeOnLP.com to view the video recaps.

Scott Glenn Chief Security Officer, Sears Holdings Tim Gorman Divisional Vice President, Loss Prevention, Asset Protection and Business Continuity, Walgreens

EYEONLP Powered by LP Magazine

Barry Grant Chief Operating Officer, Canadian Images

Download Version 2.0 of the Magazine App

Bill Heine Senior Director, Global Security, Brinker International

The newest version of the LP Magazine app includes in-app videos, podcasts, bookmarking, more news categories, and links to the latest association conferences and events across the industry. It’s our way to get more relevant LP news to you—when you want it. The new version is available on both iPhone and Android devices. If you already have the app, it’s a quick update. If you don’t have the app, well then, what are you waiting for? Catch up! Scan the QR code here to find links to the version you need.

Frank Johns, LPC Chairman, The Loss Prevention Foundation Gary Johnson Vice President, Loss Prevention, The Vitamin Shoppe

LP101—New Series Focused on Basic LP Fundamentals

Paul Jones, LPC Senior Director, Global Asset Protection, eBay

In partnership with the Loss Prevention Foundation, we are publishing a series of articles focused on baseline skills and information important to every LP professional. Visit the Columns page at LPportal.com. Establishing an Environment of Accountability Commitment to Training and Development Employee Counseling Leadership Principles The Succession Planning Process Evaluating and Retaining Talent

MAY - JUNE 2015

Mike Lamb, LPC Vice President, Asset Protection & Safety, Walmart Stores U.S.

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Chris McDonald Senior Vice President, Loss Prevention, Compass Group NA Randy Meadows Senior Vice President, Loss Prevention, Kohl’s Melissa Mitchell Director of Loss Prevention, LifeWay Christian Stores Dan Provost, LPC Vice President, Global Loss Prevention, Staples Tina Sellers Director of Loss Prevention, Delhaize America Mark Stinde Vice President, Asset Protection, 7-Eleven Paul Stone, LPC Vice President, Loss Prevention and Risk Management, Best Buy Claude Verville, LPC Vice President, Loss Prevention, Safety & Hazmat, Lowe's Stanley Welch, LPC Vice President, Director of Loss Prevention, JCPenney Keith White, LPC Senior Vice President, Loss Prevention and Corporate Administration, Gap Inc.

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

It’s All about Context

that if an investigator has a sufficiently serious case, he or she might invest the time and energy to drill the subject’s story down into minute details. But, here again, that seriousness provides a context that requires the investigator to use the in-depth detailed interviewing required for the case.

hat a wonderful thing to hear “I love you” from a longtime partner, but disquieting to have it said in the middle of a first date. It is comforting to hear “I love you” in a long-time relationship because it confirms what both have known for so long. But, during a first date, an “I love you” brings to mind things like stalker, insane, or serial killer. It’s really about the context isn’t it? As children we learned that much of the communication between people was as much about the context of the situation as it was about the words used to define the real meaning of the exchange. What makes learning a new language so difficult is the nebulous and seemingly inexplicable nuances that go far beyond the words chosen by the speakers.

Truthful vs. Untruthful Individuals

Let’s consider the context under which a truthful and untruthful individual decides to lie. First and foremost is the deceptive individual’s fear of detection. The fear of detection alters the person’s physiological and psychological perception of the world. Physiologically the body prepares to either fight or flee the apparently threatening situation. Psychologically, the individual explodes, becoming a mass of conflicting emotions, panic, and unreasoned impulses. The truthful individual is not under physiological and psychological pressure having only to retrieve his memory of the situation. While there may be some elements of nervousness, these dissipate over time as the individual becomes more comfortable speaking with the investigator. To prepare for the interview, the truthful person simply thinks about the circumstances surrounding the event and attempts to retrieve details prior to his conversation. The deceptive individual is more worried about being detected and may attempt to prepare some form of a story that will help him conceal his involvement in the incident. While the deceptive individual may go to some lengths in preparing his story, most liars do not do this. Most deceptive individuals prepare a bare-bones narrative lacking the detail, emotion, and general realism of a truthful story. The bare-bones story told by the deceptive individual is easier to remember if asked to repeat it at a later time and also affords them an opportunity to alter the story should evidence be presented contradicting some aspect of it. Unfortunately for them, this requires them to invent details and answers on the spur of the moment during the investigator’s questioning. Open-ended questions provide a perfect avenue for the investigator to increase pressure, or what researchers call cognitive load, without appearing confrontational. Simply saying, “Tell me more about that,” forces the deceptive person to have to expand detail that may conflict with other parts of the story. Instead, in response to the open-ended question

The Open-Ended Question

During this year’s International Association of Interviewers’ Elite Training Day, we had an opportunity to sit with several academics who shared the current research relating to behavior and interviewing. It was interesting to hear their perspective from a research standpoint as compared with that of the practitioner. At one point during the discussion one of the academics asked why we don’t begin an interview with an open-ended question. She seemed surprised that this was not universally done, but since she was heavily influenced by the research on the PEACE model of the United Kingdom, it wasn’t necessarily surprising. The PEACE model is similar to the cognitive interview used here in the US to develop information from victims and witnesses. More recently it is also being used to identify the deceptive suspect in an investigation. The answer here lies in the context of what the investigator is actually doing. The Cognitive Interview and the PEACE model of interviewing rely heavily on the open-ended question that encourages a narrative response from the subject, which hopefully provides more extensive detail to the investigator. Unfortunately, one of the byproducts of the open-ended question is it takes longer to complete an interview. Dr. Edward Geiselman, one of the developers of the cognitive interview, said that using the cognitive interview to adequately develop a victim or witness’s story could take as much is two-and-a-half hours. Now, there is no question

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Zulawski and Sturman are executives in the investigative and training firm of Wicklander-Zulawski & Associates (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.

continued on page 14 |

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While the deceptive individual may go to some lengths in preparing his story, most liars do not do this. Most deceptive individuals prepare a barebones narrative lacking the detail, emotion, and general realism of a truthful story. The bare-bones story told by the deceptive individual is easier to remember if asked to repeat it at a later time and also affords them an opportunity to alter the story should evidence be presented contradicting some aspect of it.

the deceptive individual may talk off-topic or not provide any additional details about that particular area of inquiry. The investigator may simply use extended pauses or silence to encourage the individual to keep talking even though he is not providing any additional relevant content. When this is done with the truthful individual, they continue adding detail and explanations relevant to what was being discussed. Using open-ended questions and long pauses to elicit additional information from both the truthful and untruthful is an excellent way to conduct an interview. Unfortunately, some contexts don’t allow this tactic to be used.

The Effect of Time Limits

One simple example in many organizations is where a company has an internal policy that limits the amount of time an employee may be interviewed. For most of the companies we are familiar with, this time limit ranges somewhere between forty and ninety minutes. If the dishonest employee has not made an admission during this timeframe, the interviewer is required to back out and close the interview. Unfortunately, spending a lot of time using open-ended questions will eat this precious time up as the employee rambles from one point to the next. We also pointed out to the academics that there are a number of other contexts where the open-ended question does not fit with the time constraints imposed. Another example is an officer’s questioning technique in a field setting. These unexpected and spontaneous discussions may begin with an open-ended question designed to elicit an untainted response from the subject, but it is then followed with a series of closed-ended questions to quickly drill down to the meat of the issue. The questioning might look like the following: “What are you doing here?” “I…ah…well…he’s supposed to pick me up.” “Who’s he?” “My brother.” “What’s his name?” “Ah…Mike.” “You have any ID?” “Yeah…ah there it is.” “What time is he supposed to pick you up?” “Just about now.” “Where is he coming from? Where is he taking you? How did you get here? Who are you visiting? Where do they live?” And so on. The first open-ended question used by the officer provides the untainted story from the subject. However, because the encounter is limited by the courts, the officer can only freeze the situation for a short period of time before he must either release the individual or make a formal arrest. The closed-ended questions work as effectively as the open-ended question in the short encounter because the individual could not anticipate the need to lie or the need to prepare a story for his presence at the location. As the officer asks the closed-ended question, the subject has to invent a plausible excuse on-the-fly, which increases the likelihood of his deception being detected by the suspicious officer.

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For example, if the subject said, “My brother is taking me to the airport to catch a flight.” Now in the context of the stop, the officer might inquire about the lack of luggage, airline ticket, or specific knowledge of the flight, which seemingly contradict the supposed trip. Each contradiction will require the invention of additional details, another explanation, or possibly even an admission of deception. Shoplifting investigators may also find questioning a suspected shoplifter is a much more focused inquiry as the individual is questioned about the particular item they’ve concealed. Not expecting to be detained, the individual has to invent information and conceal others.

How Context Evolves

There are so many areas where the context of the conversation alters the questioning style of the investigator that the one-size-fits-all, open-ended question may not be the best way to proceed. It was interesting to have an opportunity to discuss questioning styles with academics that have minimal real-world experience in interviewing. Their perspective has evolved from the body of work on deception and its detection, plus research into retrieval of memories and the reaction of the guilty to being question. In our next column we will discuss how the context evolves for both subject and investigator during the questioning and identification of the guilty. What on the surface might seem to be an inappropriate question actually fits the context of the situation exactly and thus is perfectly suited for use during the admission-seeking interview. |

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COVER FEATURE

FROM ALARM MONITORING TO CRISIS MANAGEMENT THE EVOLUTION OF WALGREENS’ SECURITY OPERATIONS CENTER By Bill Turner, LPC

EVOLUTION OF WALGREENS’ SECURITY OPERATIONS CENTER

ivil protest by day became decidedly uncivil by night in Ferguson, Missouri, following the grand jury decision not to indict the police officer involved in the Michael Brown shooting. Pharmaceutical retail giant Walgreens boasts being on street corners all across America, so in November 2014, when the National Guard was called in to support local public safety efforts in Ferguson, that included protecting Walgreens stores in the area, so they could continue serving the community. When all was said and done, eleven Walgreens stores were temporarily closed during the unrest with damage varying from broken glass to the near-leveling of a store from a fire started by rioters. Whether natural or man-made, Walgreens’ priorities in an emergency are to provide for the safety of customers and team members, minimize business disruption, prevent losses, and restore full services to the community as quickly as possible. Fortunately, Walgreens’ Asset Protection Solutions (APS) team was, like their mantra, “well prepared.” The preparation, response, and recovery all began in Walgreens’ Security Operations Center (SOC). To initiate preparation efforts, their SOC identified their potential impact zone by creating a radius around protest routes in Ferguson. They then familiarized themselves with each element of the security systems in those forty-five stores. They also coordinated with APS field resources to support store preparedness by encouraging team members to review procedures for civil disturbances, flash mobs, looting, and early store closings. To improve their own preparedness, Walgreens’ SOC increased their staffing levels, expanded their social media monitoring capabilities by adding a Ferguson-specific situational awareness desk, and created a protest assessment guide for SOC specialists to monitor news reports, gather intelligence, assess risk, and control rumors. By the time the grand jury decision was announced, Walgreens stores were prepared to close, if necessary, as a precautionary measure. Their SOC was able to respond without missing a beat. While official planning for the unrest in Ferguson started in August of 2014, true preparation had been underway since the development of Walgreens’ Security Operations Center in 2012.

Loss prevention has played an important role at Walgreens for more than fifty years. However, since the division expanded and rebranded to become Asset Protection Solutions and built a Security Operations Center, their impact and approach to risk mitigation have grown rapidly.

Growth of Loss Prevention

Loss prevention has played an important role at Walgreens for more than fifty years. However, since the division expanded and rebranded to become APS and built a SOC, their impact and approach to risk mitigation have grown rapidly. Since its inception, Walgreens’ SOC has been leveraged to develop a robust Emergency Operations Center (EOC) and support other key functions, and it continues to evolve. Before Walgreens built their state-of-the-art SOC, their IT service desk monitored store burglar alarms and outsourced fire-alarm monitoring to third parties. When a

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EVOLUTION OF WALGREENS’SECURITY OPERATIONS CENTER natural disaster or a widespread product recall struck, team members from across the country put their day jobs on hold to manage the corporation’s response. If a crime trend swept across the country, field team members from LP were left to manage the situation locally. This decentralized approach to resource allocation is still used by many companies today, but not by Walgreens. In 2012 Walgreens Divisional Vice President Tim Gorman saw an opportunity. “I had a vison of bringing all the resources needed to best support our enterprise under one roof, and I knew APS was Tim Gorman the right group to build it,” said Gorman.

Building an SOC

A hard look at the numbers was enough to build a business case for the development of an operations center. By converting to in-house monitoring of all alarms, projections indicated that the SOC would pay for itself in the first year and result in millions in savings in subsequent years. With APS team members already involved in the enterprise’s security functions, the development of a formal operations center proved to be an opportunity to

relieve corporate and field team members of additional responsibilities, centralize incident and emergency response, and continue developing APS’ scope and capabilities. The APS team took the lead on designing Walgreens’ operations center by leveraging institutional knowledge, visiting other public- and private-sector operations centers, and incorporating Gorman’s vision to create a scalable solution. The finished product is a 24/7 Security Operations Center that monitors burglar alarms, fire alarms, and power outages and also provides situational awareness to the Walgreens enterprise. Even with lofty goals and expectations, no one could have predicted how quickly Walgreens’ SOC would develop to support the preparation for and response to incidents like civil unrest in Ferguson.

Creating a Model of Resiliency

While designing Walgreens’ SOC, the potential benefit of streamlining communication and related escalation processes was clear. It was also evident that their SOC’s initial and continued success would hinge upon resiliency and redundancy. Walgreens decided to store their technology in the cloud when possible, so even if physical infrastructure is challenged, the technological systems needed for daily

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EVOLUTION OF WALGREENS’ SECURITY OPERATIONS CENTER

Activating the EOC

operations could still be accessed. The technologies that are not cloud-based offer redundancies through multiple physical servers stored in strategically placed data centers. A back-up SOC facility and “go kit” with mobile technology are also available in the event that team members need to quickly relocate. Both the technology and processes for relocating are tested on a regular basis. To ensure adequate staffing coverage should a large-scale incident require additional SOC support, a group of APS staff trained in SOC roles works immediately outside of the facility. As the single point of contact for the safety and security of more than 8,000 locations, Walgreens’ SOC responds to incidents of every size and scope. This provides opportunities for SOC team members to improve their skills and put response procedures to the test on a daily basis. “We learned very quickly that our response procedures need to be specific enough to address our top security challenges and also broad enough to apply to the unexpected,” explained Gorman. “When a store called and asked what to do when a nest of snakes appeared in their store’s ceiling tiles, we had to be prepared. And we were.”

A formal, physically adjoined Emergency Operations Center was developed in conjunction with the Walgreens SOC. Should the SOC report a dramatic increase in call volume, a significant level of disruption to business operations, or the need to maintain accurate site status information for a large number of stores, an EOC activation is considered. With the EOC activation decision criteria flowing through APS’ SOC, it was a natural fit for APS to build out their business continuity function to oversee the EOC by making activation decisions, managing emergency response, and hosting other corporate representatives as needed. When Hurricane Sandy hit the Northeast in 2012, Walgreens had more than 600 sites impacted. Determining the status of each store and specific needs of each community could have taken a significant amount of time. Instead, Walgreens reaped immediate benefits of their new SOC and activated their EOC. Once their EOC was activated, Walgreens APS team invited the corporate support team to share their voices in the EOC, all while receiving instant location and situational awareness updates from the SOC. The corporate support team comprises representatives from key functions critical to business resumption, including facilities, IT, pharmacy, store operations,

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EVOLUTION OF WALGREENS’ SECURITY OPERATIONS CENTER community affairs, government relations, media relations, internal corporate communications, legal, compliance, and human resources. EOC activations also include location-specific attendees who participate by phone, which typically include representatives from distribution centers, transportation, and retail operations. By using the same agenda and reporting structure for every activation, the EOC is able to maximize its effectiveness regardless of incident type. By leveraging the consolidation of information through their SOC and activating their EOC to bring representatives from various divisions together, Walgreens was able to begin their targeted response to Hurricane Sandy almost instantly. They set up pharmacy trailers in the parking lots of their destroyed stores to ensure medications were available to the community, deployed electric power generators, reopened the front end of stores that were only partially damaged, routed deliveries of daily essentials to these stores, assisted team members with getting to work, and even offered free cell phone charging stations at stores in communities without power. This immediate response was imperative for upholding APS’ strategic mission of safety, security, profitability, and resiliency. “Our EOC was activated for two weeks straight with representatives from facilities to community affairs

present. Through our partnered efforts, we were able to ensure our team members and communities in the Northeast were well taken care of, and we were able to resume operations in a dramatically reduced period of time,” explained Gorman. Walgreens’ efforts and Gorman’s leadership around Hurricane Sandy were recognized by the Department of Homeland Security with the 2013 Rick Rescorla National Award for Resilience. To keep their skills sharp for leading EOC activations, APS’ business continuity team members regularly lead and participate in exercises and drills. Internal tabletop exercises provide refresher opportunities for APS support functions, and external exercise participation provides business continuity with opportunities to develop relationships with various emergency management agencies as well as public- and private-sector partners.

Leveraging the SOC

Early on, infrequent events were more likely to require additional corporate support and lead to an EOC activation. Walgreens stores have since become more familiar with reporting incidents to their SOC, and the SOC’s capabilities have greatly expanded. These developments equip APS with more proactive

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EVOLUTION OF WALGREENS’ SECURITY OPERATIONS CENTER

Walgreens decided to store their technology in the cloud when possible, so even if physical infrastructure is challenged, the technological systems needed for daily operations could still be accessed. The technologies that are not cloud-based offer redundancies through multiple physical servers stored in strategically placed data centers. The benefits of the centralization of Walgreens’ SOC were mirrored in this command center. Every time their SOC would have sent a notification to a local store team member for an alarm activation, act of vandalism, or other incident, they instead provided updates to the St. Louis command center, so repair efforts could be coordinated locally once the scene was deemed safe. Jim Wilson, an APS director in St. Louis, worked in the temporary command center and led local preparation and recovery efforts. “The process that we used significantly affected the safety of our store personnel because good decisions were made with good Jim Wilson data,” said Wilson, “and I think

information and enable them to manage most large-scale incidents without the need to fully activate their EOC. In advance of the grand jury decision in Ferguson, the Walgreens SOC sent preparation guidelines to stores in the expected impact zone, and stores reciprocated by sharing their anticipated needs, plans for early closures, and information received from local law enforcement. The advance notifications proved valuable to stores and APS for implementing appropriate risk mitigation strategies. Typically, when a store is broken into or vandalized, a Walgreens team member is dispatched to meet law enforcement at the location. Recognizing the inherent risk this would pose to team members during the expected unrest in Ferguson, APS worked with field resources to set up a temporary, small-scale command center in the St. Louis area.

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continued on page 22 |

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EVOLUTION OF WALGREENS’ SECURITY OPERATIONS CENTER continued from page 20

to verify the root cause of alarm activations and thereby reduce instances of unnecessary dispatch, offer physical descriptions of suspected lawbreakers to responding law enforcement, and provide APS’ business continuity function with footage for performing initial site damage assessments when a store is physically inaccessible. Video footage was especially beneficial to Walgreens during the unrest in Ferguson. Monitoring screens rotated through video clips from store cameras in the potential impact zone. This enabled their SOC to provide real-time information to law enforcement, which helped officers to arrive at a Walgreens store while crimes were still in progress. The area growing most rapidly within Walgreens’ SOC is situational awareness. A combination of social media tools, numerous third-party intelligence sources, and details from stores helps them cast a wide net for

it significantly enhanced our ability to recover. The synergy after the event just continued.” Gorman added, “The SOC was in their element during the unrest in Ferguson. Despite having a store set on fire, they worked calmly and diligently each night like a well-oiled machine.”

Developing Key Functions

In addition to supporting more than 8,000 locations and presenting intelligence to their EOC, Walgreens’ SOC continues to develop its scope. The role of their SOC has also expanded to support key functions across the enterprise, including corporate campus security, international travel, and consumer relations. Last year they responded to more than 10,000 incidents. An added benefit of centralization is evident through the video capabilities of Walgreens’ SOC. Access to real-time video footage for their locations enables them

continued on page 24

When Hurricane Sandy hit the Northeast in 2012, Walgreens had more than 600 sites impacted. Determining the status of each store and specific needs of each community could have taken a significant amount of time. Instead, Walgreens reaped immediate benefits of their new SOC and activated their EOC. 22

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The area growing most rapidly within Walgreens’ SOC is situational awareness. A combination of social media tools, numerous third-party intelligence sources, and details from stores helps them cast a wide net for learning of potential impacts to assets, from supply chain disruptions to personal safety threats. valuable UL certification, while also growing to better meet the needs of key functions across our division and the enterprise,” reflected Gorman. “During Ferguson, using situational awareness information was paramount in significantly mitigating loss and reducing potential risk to team members.”

continued from page 22

learning of potential impacts to assets, from supply chain disruptions to personal safety threats. Various social media aggregators with carefully designed search strings are particularly useful for providing proactive information to executives and stores. By leveraging various social media platforms during the unrest in Ferguson, they gleaned significantly more information than was offered by 24/7 news reports. Live-stream social media video feeds from protesters were particularly helpful for gaining details on the sentiment of the area and learning of upcoming protest routes. This additional information enabled their SOC to provide details to the APS St. Louis command center and to key areas across the enterprise to ensure the stores likely to be impacted were secured and closed early. “It’s incredible how the SOC is able to stay true to its roots with alarm monitoring and maintaining its

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Lessons Learned

Through the development of an SOC and EOC and an evolution of key functions, Walgreens learned many lessons that may be of interest to others developing their own operations centers. Maintain Up-to-Date Contact Information. Walgreens recognized the importance of this before they opened the doors to their SOC, but like many organizations, they were faced with the challenge of keeping up with an ever-changing stream of contact details. The solution was integrating their continued on page 26 |

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EVOLUTION OF WALGREENS’ SECURITY OPERATIONS CENTER continued from page 24

our stores and focus communications accordingly. We also leveraged our notification capabilities to provide preparation guidelines and reiterate the message that team member safety is more important than property.” Speaking to the importance of effective communication, Dospoy said, “The sheer amount of information and number of notifications the SOC sent to all necessary stakeholders shows just how vital a streamlined process of communication between the field and the SOC is. This is true for all widespread events.” Preparation Is Essential. Planning and preparation were of cardinal significance to Walgreens’ successful response and recovery to the chaos that transpired in Ferguson and at numerous Walgreens stores. “Our SOC and field team members recognized the importance of using the time leading up to the grand jury decision wisely,” shared Gorman. “They coordinated efforts to ensure plans were in place, and everyone was prepared to execute them. For example, practicing closing 24-hour stores that had never closed before saved valuable time when team members needed to exit the store before the situation escalated.” APS field team members liaised with local law enforcement and reviewed response plans, including how the stores would be notified of the release of the grand jury decision and which rally points to use. “I can’t emphasize enough what a combined effort it was between the field asset protection managers, the region operations team, and the SOC. It was a collaborative effort, and we were in lockstep the whole way,” said Wilson. “We had outstanding support from the SOC. They were there for everything that we needed.” For their successful implementation of a recovery plan that resulted in no injuries to team members and the restoration of services to the area, Walgreens was recently recognized by the Business Continuity Institute with the Most Effective Recovery Award.

communication matrix with an enterprise system that updates personnel details and contact phone numbers regularly. This further streamlines their SOC’s communication and expedites the notification process. Limit the EOC to Essential Participants. Early on Walgreens struggled to accommodate all interested parties on their call bridge during an activation. They quickly learned that many team members joined the EOC out of curiosity rather than need. By limiting the attendee list to divisions essential for response functions and asking only one person per division to participate in the EOC, discussions remain relevant, and everyone has a seat at the table, whether physical or virtual. Expand Intelligence Sources as Much as Possible. Walgreens is continually adding to its resource repertoire. By following social media, the effectiveness of their SOC is improved. For instance, information about criminal activity in a store is often reported on social media much earlier than by traditional means. Using aggregators with fine-tuned search strings offers increased efficiency by allowing their SOC to monitor countless sources simultaneously.

Ferguson Successes

Many lessons Walgreens’ SOC learned in previous situations were valuable preparation points for Ferguson and were reaffirmed as the unrest unfolded. Training Additional Staff Pays Off. By having additional APS team members trained to support the SOC’s daily needs, SOC team members were prepared to focus their attention specifically on Ferguson. Effective Communication Is Key. The media coverage leading up to the grand jury decision in Ferguson incited fear in Walgreens team members in Ferguson, across the country, and at the corporate campus. Equipped with facts, their SOC communicated realistic expectations and actionable recommendations. Walgreens SOC Lead Sean Dospoy explained: “The reality is that there were hundreds of protests throughout the country following the grand jury decision, but only a small percentage turned violent. Through our diligent research and methods of investigation, the SOC was able to determine which Sean Dospoy protests posed a potential threat to

Looking Forward

There is no doubt that Walgreens’ SOC has grown rapidly to exceed all expectations. Yet APS continues to keep their ear to the ground for more ways to leverage their capabilities to support the entire Walgreens enterprise. “We are always learning of needs that other areas have, and we know that we have the tools and reach to meet them,” said Gorman.

BILL TURNER, LPC, is recently retired from Nike, Inc. where he held senior director positions in loss prevention and retail operations. He currently serves as treasurer of the Loss Prevention Foundation. Turner’s career has included security, LP, operations, and distribution leadership at Federated Department Stores, Lorimar Productions, and Walt Disney World. Crisis management has been both a recurring responsibility and passion throughout his career. Turner can be reached at bill.turner@losspreventionfoundation.org.

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PARTNERING WITH RETAILERS

Joint ORC Investigations

By Dave DiSilva, Hawken Averett, and Christian Hardman DiSilva is senior manager of global asset protection for eBay where he oversees eBay’s tools and PROACT teams. He can be reached at 408-332-8666 or dadisilva@ebay.com. Averett is PROACT senior investigator, and Hardman is PROACT investigator. The eBay PROACT investigations team can be reached at PROACT@ebay.com.

perpetrators are not brand loyal and typically sell on many online sites and physical locations. Businesses of this type will often try to hide behind willful negligence, meaning they don’t feel it’s their responsibility to verify sources on all the items they buy from others. Following are some of the specific red flags we look for to identify fences: ■ Pricing is typically significantly below retail or other eBay sellers. ■ Savvy fences may mix in small amounts of stolen goods with legitimate products, such as combining stolen electronics with their antiques business to offset profit margins. ■ They frequently will start auction prices at $0.99 with no reserve because they don’t care about the final price. ■ High conversion rates and/or sales ramps are common depending on frequency of listings. ■ Immediate access of funds through ATM withdrawals is typical. ■ Fraudsters often provide great customer service and fast shipping. ■ Public records often show a criminal history, large liens, and association with known criminals. ■ Social media may show life events or issues that lend to the behavior, such as frivolous spending, gambling, or drug use. ■ Shill bidding is a common tactic used to inflate the price of merchandise and prevent items from selling too low.

rganized retail crime (ORC) investigations are an important focus for eBay’s collaboration with retailers for the following reasons: ■ Trust is eBay’s top priority. Without trust our marketplace could not function. ■ Stolen goods create an unfair and untrustworthy marketplace that drives away honest sellers because they are unable to compete. Retailers are a force multiplier that help eBay remove criminals and keep stolen goods off our site, thus creating a more trustworthy marketplace. Collaboration is a two-way street with retailers’ investigative findings shared with eBay and law enforcement. PROACT retailers are required to: ■ Conduct a thorough investigation before contacting eBay, ■ Limit investigative requests to criminal activity that have a nexus to eBay, and ■ Communicate investigative findings and resolutions to eBay. The types of investigations we are involved in vary greatly. Below are some of the scams and red flags we proactively search for.

Retailers are a force multiplier that help eBay remove criminals and keep stolen goods off our site, thus creating a more trustworthy marketplace. Collaboration is a two-way street with retailers’ investigative findings shared with eBay and law enforcement.

The Triangle Scam

The triangle or triangulation fraud begins with a seller listing items they do not have on hand at prices far below normal pricing. The scammer often lists the same product on multiple sites to move large amounts of product quickly. Once the seller completes a sale with a buyer, the inventory is purchased with stolen credit card credentials from retailers, manufacturers, and other online sellers. The seller provides the buyer’s shipping information to the retailer who then ships the product directly to the unsuspecting buyer. The low pricing results in quick inventory turn and dramatic sales increases. Following are some of the specific red flags that help identify triangle fraud: ■ Little or no sales history ■ Pricing significantly below retail or other eBay sellers ■ High demand or limited availability hot products ■ Copy-and-paste listings using stock photos and descriptions ■ High conversion rates and extreme sales ramps in short periods ■ Refunds or extra dollars for positive feedback ■ Sales proceeds received in foreign accounts ■ Newly registered accounts with immediate high volume sales ■ Feedback comments stating no response from seller These are just a few of the criminal activities we investigate in collaboration with retailers. To learn more about these investigations and other eBay asset protection programs, contact PROACT@ebay.com.

Organized Retail Crime Fencing

Perhaps the most widely known criminal on our radar is the fence. A fence is an individual who knowingly buys stolen property for later resale, normally in a legitimate marketplace. Simply defined, a fence markets known stolen items obtained from their own theft, booster crews, or other fences. Pawn shops, check-cashing businesses, and flea-market locations are common in this activity. Although any item could be at risk, there are typical “hot items” we look for. The items preferred are almost always in high demand and relatively accessible to booster crews and individual shoplifters. Investigators questioning a suspect will find that receipts and documentation for items are sparse, fake, and are rarely provided. The proceeds of their illegal actions are turned over quickly and used to obtain additional stolen goods to resell. These

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LPPORTAL.COM

INTERVIEW

THE ATTITUDE OF SUCCESS THAT MARKS THE CAREER OF MELISSA MITCHELL

By James Lee, LPC, Executive Editor

INTERVIEW

EDITOR’S NOTE: Melissa Mitchell, CFI, is director of loss prevention at LifeWay Christian Stores. She joined the company in 2001 after holding various LP roles at Service Merchandise, Cato, Rose’s Stores, Revco Drug, and TJ Maxx. Mitchell is a longtime member of the National Retail Federation loss prevention advisory council and recently joined the editorial board of LP Magazine. She also serves on the International Association of Interviewers advisory board and sits on the LP memorial fund committee for the LP Foundation.

In order to be effective today, we must have an in-depth knowledge of all components of the business. We are business partners with a special expertise in loss prevention. I think that shift is a reflection of our business partners having a greater understanding of our skill set as well as those in the LP industry constantly upping their game. during WWII. He would talk about the great debt that you have to this country and that you don’t understand what it is we have in this country until you have been elsewhere. Military service was never framed up as an expectation; rather it was talked about as an honor to be able to serve. Serving in the military was typically thought of more as an option for males in those days, but my dad was very consistent about encouraging me not to see anything as a limitation. He would say, “You could be an astronaut.” I would ask, “Well, are there girl astronauts?” He’d say, “Even better, you could be the first.” So nothing seemed impossible. Another factor that led me to the Air Force was that I had attended a private military academy for the last three years of high school. I was in the first class of full-time female cadets in this historic, previously all-male military school. It had just opened up to women, and I was really fortunate to get a scholarship. When I graduated high school, I attended SUNY Fredonia. After one year I missed the military atmosphere, so I went into the Air Force.

EDITOR: Five years ago we profiled LifeWay Christian Stores and talked to you about loss prevention in this unique retail environment [see “Thou Shall Not Steal” May-June 2010]. This interview will focus instead on your career over the past thirty years. So let’s start back in high school. Did you imagine then that you would have a career in loss prevention? MITCHELL: No. I grew up in Portland, New York, which is

a rural farming community in western New York. We had a small farm growing Concord grapes for jelly. There was a small locally owned grocery store and not much else, so I had no idea of what loss prevention was. My concept for what I wanted to do was centered around my dad. I would work next to him in the grape vineyard, and as he talked about the things he had wanted to be when he was growing up, like a state trooper or a pilot, those became the things that I wanted to be. So, no, I did not have a career in loss prevention in my mind until I fell into it. EDITOR: After high school you joined the Air Force. What led you to that decision? MITCHELL: The majority of my family, including cousins and

EDITOR: Did you do anything in the Air Force that prepared you for a career in loss prevention? MITCHELL: I think that there are many leadership traits that

uncles going back several generations, served in the military. It was just what you did. My dad was in the Marine Corps

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you develop in the military that translate very well into loss

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INTERVIEW

was having conflict with. Since the longest class we taught lasted three days, I realized that I could not have a big impact on the attitude of the individuals coming through our facility for training. Instead, I decided to affect change by having a positive influence on the individuals in my unit. To do that, I had to acclimate to the existing culture so that I could best understand what type of leadership would be the most effective. That is exactly what we do in loss prevention every day. We constantly rework and up our game in order to succeed. We find a way to get into the room so that we can have a voice. We create change through positive influence. We are adaptable as leaders due to the often-changing environment.

prevention. When I went into the military, it was only about 8 percent female with the vast majority being administrative assistants or nurses. I initially went in to be a translator. I was going to go to the Language Institute in San Diego for two years, which coming from western New York sounded pretty good. But while I was in basic training, Congress redefined what constituted a “combat position,” opening up additional jobs to females that had previously been out of reach. There was an intentional push to get female recruits with a demonstrated history of leadership into these positions immediately. Based on my attendance at the military academy, I was asked to change jobs and train to be an aerospace physiological training instructor, which is training pilots and crews in the physiological aspects of high-altitude flying. It was a huge culture change for pilots and crews to see a female instructor, as well as for the instructors in the unit. The result was a lot of conflict in the first two years. There were certainly some people who wanted to see me fail, but that forced me to constantly up my game. When a door was closed in my face, it trained me to find another way into the room. It was made clear to me early on at my first base that the playing field was set for my defeat, and there was nobody on my team but me. It taught me how to succeed on my own when I needed to and to deal with conflict, even while living in the same barracks with some of the people I

EDITOR: How did you get into LP after leaving the Air Force? MITCHELL: About a day after leaving the Air Force, I

realized that you can’t really teach aerospace physiology as a civilian. It’s not a skill that is used outside of the military. So I just went through ads in the newspaper and ended up getting an interview at Belk-Leggett. The loss prevention manager there looked at the application and said, “You have no LP experience.” But I made my plea. “Listen, if the military can teach me to be an aerospace physiology instructor, I am confident you can teach me to do this.” I talked her into giving me a shot, which was a relief because

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INTERVIEW

the least qualified person that I’ve interviewed for this position. Tell me why I should even consider you.” I figured I had nothing to lose, that all I could do was give him a bold comeback because, really, he was right. I wasn’t going to say that, but he was right. I said, “Here’s the deal. The Air Force wanted female recruits who could make it in what they knew would be difficult waters. They were right; it wasn’t easy. They selected me because I made it in the first class of female cadets in an all-male military academy, and that wasn’t easy. I succeeded in those environments for a reason. I think it’s really about being adaptable, teachable, and having leadership skills. You’re going to make a decision for this job based on the factors that you see, and not all of them fit neatly onto that application and that resume. If you don’t hire me for this position, fair enough, but I’m betting that

I was thinking I was about to be living in my car. I was there for about six months as a store detective. EDITOR: Talk about some of the firsts that happened for you as a store detective, like the first time you apprehended a shoplifter by yourself. MITCHELL: I thought my heart was going to fall right out

of my chest. I knew this woman had taken a sweater and had put it in her bag. I saw her come in, pick it up, and put it in the bag. I literally had not lost eye contact, but I was scared to death because just by virtue of stopping someone, you’re making an accusation about someone’s integrity, and I anticipated a strong reaction to that. I was wrong about her potential concern for her integrity—she was a professional with a string of arrests—but right on target in terms of the strong reaction to being stopped.

For me, being in several different companies gave me a very broad range of retail experience—specialty, drug store, big box, jewelry, and apparel. It also gave me an opportunity to learn to adapt to many different corporate cultures and find solutions to a variety of problems from many different vantage points tailored to the business I was in at the time.

EDITOR: How did you get promoted above store detective? MITCHELL: It was literally luck. I left Leggett and went

to work for TJ Maxx. The regional LP manager, Audrey Edwards, was doing store visits. I was new, so she took some time to get to know me. She asked about my background. I told her about my short time at Leggett and my military experience. She asked me what I did in the military, and I told her I taught aerospace physiology. She said, “You’re underemployed. You need to get a resume together.” A couple days later, my boss called me in and told me that Audrey had submitted my name as a candidate for a DLPM-in-training position. A few days later I went to the corporate office and sat down with the VP of LP, Bill Titus, for an interview. He looked at my resume and said, “You’re

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LPPORTAL.COM

INTERVIEW

you’re going to spend money flying me back up here in six months when you start rethinking it.” I gave it my best shot, and sure enough, he gave me a chance. EDITOR: And from there you went where? MITCHELL: After about three years with TJ Maxx, I went

to Revco Drug, Roses Stores, and Cato, all in regional LP manager positions over a ten-year span. When I had my youngest son, I decided to leave the workforce and stay home with him. EDITOR: But obviously you came back. MITCHELL: When I was ready to reenter the workforce,

we were living in Nashville, so I looked for opportunities locally. Service Merchandise was headquartered in Nashville, so I applied there. I thought, “What would put me over the top besides experience?” Having never been in a Service Merchandise store before, I decided it would be good to go in with some knowledge of their business. So I visited every store in a 100-mile radius. I just walked in, walked around, looked them over, and took some notes. When I sat down in an interview with the VP of LP, Jeff Cochran, he asked, “Are you familiar with our stores?” I said, “Well, I visited all the stores in a 100-mile radius.” He literally put my resume down and asked, “What? You’re kidding. Name those stores.” I had the list and named them off. He later told me the interview was over right then. He felt that if I was willing to invest in their company before I had the job, I would invest as an employee. I worked for them until they went out of business. EDITOR: So in the span of about fourteen years, you worked for six different companies. When you see that on a resume today, do you get nervous about someone with that many jobs, or do you think, “Well, that’s what I did?” MITCHELL: It depends on the specific situation. For me,

being in several different companies gave me a very broad range of retail experience—specialty, drug store, big box, jewelry, and apparel. It also gave me an opportunity to learn to adapt to many different corporate cultures and find solutions to a variety of problems from many different vantage points tailored to the business I was in at the time. All of that is experience that I draw from in resolving issues and facing challenges, and I think it has been an advantage for me. EDITOR: Did you ever think that LP wasn’t the career for you? MITCHELL: No. I remember thinking during the first few

months of being in loss prevention that, like any job, there are going to be parts you love and parts you hate. I kept waiting for the part that I hated. Loss prevention was literally the biggest stroke of luck anyone could have had. continued on page 34

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INTERVIEW

more preventative in my opinion. I think we have a platform to influence direction and decisions on many levels of the overall business. The advancement of technology has created amazing opportunities, both good and bad. We have data available at our fingertips today that we could not have imagined in 1985, but at the same time the technology that gives us that benefit can also be used to do damage on a greater scale than was possible before. As an industry we have had to develop the skills to identify exposures resulting from the rapidly developing technology world, as well as learn to anticipate what might be coming in order to protect the assets of our companies. Additionally, the scope of what we do has changed. Where our responsibility in the past might have been limited to a defined list of “LP responsibilities,” in order to be effective today, we must have an in-depth knowledge of all components of the business. We are business partners with a special expertise in loss prevention. I think that shift is a reflection of our business partners having a greater understanding of our skill set as well as those in the LP industry constantly upping their game.

continued from page 33

EDITOR: You joined LifeWay in 2001 and became a director. What is your favorite part of the job? MITCHELL: I love the interaction with people, whether it’s

at the corporate office, in our stores, or at LP conferences. Some of the greatest learning opportunities of my professional life have been at LP conferences, just listening to and interacting with peers. I love to pick their brains. I normally have a list of questions I want to ask as many people as I can at LP conferences and events. What are you guys doing about this issue? What do you see when you look at this? What do you think is the next big thing coming down the pipe? What do you think is old news? I’m fascinated by everybody’s individual take on questions like these. These are also the same questions I ask our associates because they have frontline insight into issues that can be so different than the perspective we have at the corporate level. EDITOR: Over the years, what have you seen change in loss prevention? MITCHELL: The job today is much more broad and deep

than it was thirty years ago. We are less reactionary and

EDITOR: You think that the industry is no longer about catching the bad guy? MITCHELL: I think it is about executing at all levels, which

will no doubt always include catching the bad guy. Our real contribution has changed to be centered on helping to move the whole business forward, as opposed to just addressing the singular issue of shrink. EDITOR: Why do you think LP professionals’ jobs have changed? MITCHELL: Any business that has survived over time has

had to change with the changing world around it. As continued on page 36

I never think of myself as a “female LP executive,” I just think of myself as an “LP executive.” I don’t separate one from the other. I can’t tell anyone how to succeed as a female in loss prevention because I only know how to succeed as a person. Part of succeeding in roles in the military was to understand that we were all soldiers with a common goal. 34

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The ring of excellence is a great chance for us to honor people who have shaped the industry, who have provided opportunities for the rest of us by virtue of their accomplishments. I view the ring of excellence winners’ contributions as the steps that I was able to walk up to get to the goal I wanted. continued from page 34

LP professionals, we are no different. In order to survive, we have had to change to meet the needs of our customers—our employees, our stores, and our business partners. We have had to leverage our ability to solve problems across the business and become more agile to allow us to meet the ever-changing needs of the customer. I think our job has expanded because retail executives have come to realize that we have a skill set that’s transferrable to all segments of the business, built on leadership, problem solving, business acumen, and a strong desire to help the overall business succeed. EDITOR: What are some of the traits of good bosses that you’ve had? MITCHELL: I have been really fortunate in that I have had

great bosses. The first person that comes to mind is Max Arenas at Cato. He shared something with me that I thought was incredibly profound. I was running up against a brick wall with a key business partner. I kept trying different approaches, but I just couldn’t get a foot in the door. I was at the end of my rope, and I was starting to talk myself into thinking it was just a lost cause. I finally called Max and expressed my frustration with the situation. He told me to think of myself as the owner of a loss prevention consulting business. “Now, you are having a problem interacting with a client; a customer that represents one-third of your business. How do you like them now?” Great point. What would I do if it was my business? Would I really ditch a third of my customer base because they were hard to deal with? No. I would absolutely find a way to make it work. That completely changed my approach going forward. I thought that was a fantastic way to look at it.

EDITOR: Are there other mentors who come to mind? MITCHELL: I already mentioned Audrey Edwards. She was

Early in my career, when I had my first apartment, she stopped by and noticed that I was on a ground floor unit with no security that backed up to a wooded area. Coming from a small farming community, it never occurred to me to be concerned. She increased my living allowance and made me move into a different unit that would be safe for a single woman living alone. Alan Tague at Gander Mountain is someone else who’s been a major influence. As we have talked about the different paths our careers could take over the years, Alan pointed out to me that you can have a big LP career by being in the senior slot at a huge company or by being in a mid-size company, but having influence on the industry by taking on leadership roles sitting on advisory councils like the NRF, IAI, LP Magazine, and others. I also make an intentional effort to gain perspective on my own program by inviting my peers, like Alan, to do a store walk with me when we are at conferences, and I will do one with them. We have a good group of senior

a great influence to me both professionally and personally.

continued on page 38

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INTERVIEW goal” and feel overwhelmed. I look at it and think, “Ten? Excellent. I was thinking it would be twenty.” If it’s not a really bumpy road, it makes me think maybe I’m on the wrong road.

continued from page 36

LP executives here in Nashville who are great about collaborating with each other. Joe Hardman from Cracker Barrel and I speak often to get each other’s opinion or work on a common issue. He has regularly invited other LP executives in to speak to his LP team, which I think is a great way to expand their view of the LP industry. Steve Scott from Tractor Supply is someone else in Nashville I can count on. Cheryl Blake at Verisk has been an example for me of someone who is constantly moving forward in her career in different ways. I recall her presenting at the 2000 NRF conference on telephone interviewing. I remember sitting in that session thinking, “This is crazy; nobody is going to confess on the phone.” But I was expecting with my youngest son at the time, and when I had to stop traveling, I tried interviewing by telephone. And it worked. She had to know when she agreed to teach that class that lots of folks were going to have the same reaction I did initially, but she stepped up and showed leadership in this area for our industry. She has gone on to be a great example of the possibilities beyond a traditional LP career by blazing a new path as a solution provider. By far the best advice I ever got though was from my dad, who told me that as I tried new things, I might decide at some point that it was not what I wanted or thought it would be, and there was no shame in walking away. He went on to say that some of the things I wanted to do were going to be extremely challenging, and people might try to discourage me. So while it is okay to walk away, nobody gets to run away.

EDITOR: For years you have been involved in the NRF LP steering committee. What initiatives have been special for you in your involvement with that organization? MITCHELL: I’m chair of the awards committee, and probably

the two things that are nearest and dearest to my heart is the ring of excellence, which you are a recipient of, Mr. Lee, and the volunteers in action video presentation. One of the best days I will have each year is the day that we make the call to the new ring of excellence recipient. We try to set it up so that they don’t know why we’re calling so that we can surprise them with the award. I wish I had recorded peoples’ responses because it has been fascinating. These individuals, who are regarded as titans of our industry, are usually speechless, a bit unnerved, and choked up. The ring of excellence is a great chance for us to honor people who have shaped the industry, who have provided opportunities for the rest of us by virtue of their accomplishments. I view the ring of excellence winners’ contributions as the steps that I was able to walk up to get to the goal I wanted. Their hard work helped to create the industry I enjoy today, and I am grateful to the NRF for providing the chance to thank them publicly by way of the NRF ring of excellence award each year. EDITOR: Tell us about the volunteers in action program. MITCHELL: The idea was really the brainchild of Mike

Keenan, who said that we ought to have an award for people who go above and beyond in the interest of helping others. I completely agreed and thought that a PowerPoint set to music would be a great way to showcase these activities. This developed into the NRF volunteers in action video presentation that you see at the NRF LP conference each year. I could have never imagined the stories we would be privileged to tell. The things that individuals in the LP community have accomplished for the good of others are truly astonishing. The leaders who have provided an LP team approach to raising funds for the homeless, reading to kids, painting rundown schools, or sprucing up local parks have truly leveraged their teams for the greater good. The consistency with which they all tell me that they don’t do it to be recognized is predictable. The depth of the willingness to give of their time and resources is incredible. [To read more about volunteers in action, see “LP Professionals Giving Back” in the May-June 2012 edition or on the LPportal. com website.]

EDITOR: You are a woman in the loss prevention industry. Why is it we don’t have more women in this business at your level? MITCHELL: I never think of myself as a “female LP

executive,” I just think of myself as an “LP executive.” I don’t separate one from the other. I can’t tell anyone how to succeed as a female in loss prevention because I only know how to succeed as a person. Part of succeeding in roles in the military was to understand that we were all soldiers with a common goal. Focusing on the differences between us like gender seemed to give that negative argument credibility, so I focused on our common goals instead. Also, it never occurred to me that I didn’t get an invitation to have a seat at the table. I always just assumed my invitation was lost in the mail. So I pulled up a chair anyway. I did not think in terms of being intentionally excluded. I sat right down, and nobody in the room said no. A big part of whatever success I have had was learning that I was going to fall down a lot on the way to wherever it was I wanted to be. Some people look at a long road and think, “There are ten barriers between me and my

MAY - JUNE 2015

EDITOR: Thank you, Melissa, for sharing your day with us and sharing your thoughts with our readers. We look forward to seeing you in Long Beach, California, at the NRF conference in June. |

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CERTIFICATION Interview with Andrew Radak, LPC Andrew Radak, LPC, is starting his second year in his career as an asset protection agent for Rite Aid. Before that, he spent seven years with CVS Health. An Ohio Army National Guard veteran, Radak holds a bachelors of arts degree in criminology from John Carroll University.

An Early Education T

directors and managers above me now that I better understand all that they are responsible for.

his is another in a series of interviews with working LP professionals who have earned their LPQ or LPC certifications from the Loss Prevention Foundation (LPF) to hear in their own words why they pursued certification, and how it benefited their careers.

How has going through the certification process influenced the way that you approach your job? I’ve had to take a step back and see how my role fits in with the operations of the store. I take the time to work more closely with store management and have found that it makes for greater impact and much smoother operations within the store. My coworkers also seem to appreciate this approach and understand better when I relate my responsibilities with their own.

When did you get certified? I earned my LPQ certification on November 21, 2014, and LPC on February 23, 2015. Why did you decide to pursue certification? Was there something specific that influenced your decision? I originally became interested in becoming certified when I read about two other associates becoming LPQ certified in our company newsletter. After researching the certification process, I noticed that several of Rite Aid’s asset protection directors were either LPC or somehow involved in the Loss Prevention Foundation. That’s when I knew I needed to become certified myself.

Looking at your own personal development, what information within the course helped you the most? The segments covering mentoring, networking, and communication have helped a lot. It’s far too easy to stay focused in our own department and routine, so much so that we end up ignoring other departments and other colleagues. I’ve always understood communication to be important, but I hadn’t considered reaching out nearly as far until I took the course.

It’s never too early to become certified. The information provided in the course is clearly helping those at the highest levels, but this isn’t only for executives. Store detectives and agents can learn a great deal that can be applied in their work as well as prepare them to grow further in our field.

Do you think certification offers a professional advantage over those that have not been certified? Yes. While the courses themselves are very informative, earning the certification shows others not only that you have a desire to learn, but also that you take your work seriously and that you’re willing and able to push yourself to higher levels. The certification reinforces that knowledge and expertise and gives not only our industry—but also each individual—additional credibility as specialized business professionals. If you could offer one key takeaway to someone currently considering getting certified, what would it be? It’s never too early to become certified. The information provided in the course is clearly helping those at the highest levels, but this isn’t only for executives. Store detectives and agents can learn a great deal that can be applied in their work as well as prepare them to grow further in our field.

What was the most eye-opening information that was part of the curriculum? The majority of the LPC coursework was very eye opening. As an agent, I was not aware of the scope of business functions included in loss prevention. I have an even greater respect for loss prevention

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Newly Certified

Following are individuals who recently earned their certifications.

Recent LPC Recipients

Martin Angeles, LPC, Rush Enterprises James Bishop, LPC, Cracker Barrel Old Country Store Charles Bowers, LPC, 7-Eleven Kenneth Carlson, LPC, Lowe’s Brian Clifton, LPC, Navy Exchange Service Command James Collins, LPC, Lowe’s James Cosseboom, LPC, Ahold USA Zuzana Crawford, LPC, eBay Terry Drivas, LPC, 7-Eleven Nikki Esguerra, LPC, Rite Aid Chad Fischer, LPC, TJX Companies William Macaluso, LPC, 7-Eleven Daniel May, LPC, Lowe’s Michael McCollum, LPC, DICK’S Sporting Goods Charles McMenamin, LPC, DICK’S Sporting Goods Laurie Miller, LPC, Walmart Russell Missmer, LPC, Rite Aid Daniel Modglin, LPC Norris Moore, LPC, Walmart Donna Mundis, LPC, HomeGoods Jon Newell, LPC, Lowe’s Michael Peters, LPC, Rite Aid Andrew Phipps, LPC, The Sports Authority John Quinn, Jr., LPC, Lowe’s Mark Rachmaciej, LPC, Yankee Candle Andrew Radak, LPC, Rite Aid Jason Reiber, LPC, Lowe’s Theresa Rolle, LPC, Walgreens Mathew Schriner, LPC, Lowe’s Jennifer Sleeter, LPC, Bowlmor AMF Lee Sorsoleil, LPC, Lowe’s Michael Suppe, LPC, 7-Eleven Katie Wade, LPC, Dress Barn

Recent LPQ Recipients

Jacob Aubin, LPQ, HomeGoods Jimmy Burns, LPQ, Lowe’s Elizabeth Candelaria, LPQ, Office Depot Emylie Cernak, LPQ, American Eagle Outfitters Henry Choi, LPQ Michael Desrochers, LPQ, NYPD (retired) Kenneth Doerksen, LPQ, Federated Co-operatives Heather Dudman, LPQ, Publix Super Markets Douglas Ginter, LPQ, Lowe’s Jonason Hawkins, LPQ, Navy Exchange Service Command Nicholas Hilger, LPQ Elisavet Kostara, LPQ, PUMA David Kuhns, LPQ Matthew Morin, LPQ, Bed, Bath & Beyond Jodi Musto, LPQ, Price Chopper Supermarkets Michael Ring, LPQ Irma Salcido, LPQ, NorthGate Market Glenn Skinner, LPQ, TJ Maxx Kevin Whiteacre, LPQ, University of Indianapolis Gerardo Zamarripa, LPQ, PETCO

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FEATURE

MOBILE PAYMENTS THE NEW RETAIL REVOLUTION AND ITS IMPACT ON LP By Lee A. Pernice, LPC

MOBILE PAYMENTS

here has been much written over the past several years about the new connected consumer. Pressure on retailers may never be greater to deliver on demands to provide better service, more educated sales associates, and merchandise available anytime, anywhere. The way customers choose to shop is evolving as well. Showrooming is transitioning to web-rooming, but the one constant that will continue to grow is the use of mobile devices to keep the consumer connected wherever they happen to be. A part of the new retail revolution includes how and where people pay

like near-field communication (NFC) or bar and QR codes, SMS, mobile web payments, and direct mobile billing are also included in its broader definition. Mobile Payment Acceptance. Unlike the broader term of mobile payment, mobile payment acceptance signifies the ability to accept payments on a mobile device, whether it is a smartphone or tablet. The typical set-up includes a free or low-cost attachment that allows for the swiping of traditional credit and debit cards. The device is connected, through the smartphone or tablet, to a credit- and debit-card processing application.

they are much more robust in terms of features and reliability. These new devices will include the ability to accept mobile gift, NFC, QR/bar code, and include integrated loyalty and reward. Tablet POS. In today’s marketplace more and more point-of-sale developers are focused on iPad and tablet development versus traditional systems. These new platforms afford developers with more options, more capabilities, and a lower-cost alternative while retailers receive parallel benefits in terms of features and functionality, portability, and

Preventing mobile payment fraud will take on a bigger role in the lives of many loss prevention executives with the upcoming shift in liability. But the good news in all of this is the fact that with proper planning, open dialogue with all key stakeholders, advancements in technology, and a comprehensive communication strategy, retailers are in a good position to meet the challenges head-on. for their merchandise. According to EKN Research, seven in ten millennials indicated that mobile payments were an influencing factor for their in-store purchases.

Mobile, Mobile Everywhere, but What Does It All Mean?

Mobile payments, mobile commerce, and mobile POS are three commonly used terms today. For the purposes of this article, we will define the various mobile methods based on descriptions provided by MerchantWarehouse.com. Mobile Payment. In their most simplistic definition, mobile payment is the payment for an item or service from or via a mobile device. While many today associate mobile payments primarily with “contactless” payments

Mobile Commerce. While some interchange the terms mobile payment and mobile commerce, the latter has its own, distinctive definition. Mobile commerce encompasses mobile payment, but also includes a variety of mobile-based activities including content purchase and delivery, money transfer, auctions, browsing, marketing and advertising, and location based-services. Mobile POS. Mobile point-of-sale (POS) is predicted to be the future standard, even among tier-one retailers. Many leaders are investing in mobile POS—hand-held checkout devices that serve as a payment extension to the company’s larger POS system. While these new mobile POS devices have some of the same characteristics as mobile payment acceptance devices, MAY - JUNE 2015

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reduced cost. In fact, tablet-based POS systems open up a new opportunity for smaller retailers that, due to high cost, were not able to leverage POS in the past for their business. As mobile payments continue to gain favor with consumers, the market is almost guaranteed to get more crowded with service provider options. Apple Pay, along with future Apple Watch applications, announced last year is purportedly the fastest-growing app for mobile payments. Samsung’s recent acquisition of LoopPay is another reach into the mobile market through Android phones. And as recently reported by The Wall Street Journal, Google has shown renewed interest in Softcard, formerly called ISIS, the mobile payments company

MOBILE PAYMENTS

that was formed out of a consortium of AT&T, Verizon, and T-Mobile. There is also ConnectC, PayPal, and the Starbucks’ approach with QR codes to name just a few additional options or potential options. With the growing number of mobile payment applications available to the consumer, associated challenges will also grow for retailers to accommodate the various forms of payments while remaining transparent to the customer experience. There is a real possibility that a consumer might tap their device on a terminal in one store, use a

QR code in another, and complete a transaction via a mobile application in another. There will be plenty of room for confusion from both the consumer and front-line employees at retail locations.

And the Research Says…

According to recently released research from J. Gold Associates titled Mobile E-Commerce: Friend or Foe – Cyber Security Survey, over the next two to three years interactions attributed to mobile devices and mobile applications are expected to surpass

standard browser transactions. As a result, companies not properly securing mobile transactions face significant risk of fraud incidents overwhelming their businesses. The research was sponsored by RSA and TeleSign and included companies from a number of different industries with retail being the largest segment surveyed. RSA specializes in providing solutions that give its customers improved visibility into their digital environments and the ability to detect, investigate, and respond to advanced threats; confirm and manage identities; and ultimately, help prevent IP theft, fraud, and cybercrime. RSA’s partner, TeleSign, provides mobile optimization authentication. The online survey covered 250 organizations with average revenues of $2.54 billion. Of those surveyed, ■ 35 percent indicated that they lost as much as 5 percent of revenues due to fraudulent activity over the past twelve months,

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MOBILE PAYMENTS

“In the end this journey into alterative payment forms is consumer driven and really not an option for most merchants if they want to continue to achieve a high level of customer service and satisfaction. But along the way, it helped us create a heightened sense of awareness for PCI compliance and payment best practices for our organization.” - John Guenther, Heinen’s

14 percent attributed 10 percent of revenues lost, and ■ 15 percent reported as much as 25 percent of revenues lost. On average across all organizations, 3 percent of lost revenue was attributed to their mobile channel, which equated to roughly $92 million in annual revenue drain. The participants in the survey also indicated that mobile transactions were ■

expected to grow on average 47 percent over the next five years. Assuming that the percentage of loss attributed to the mobile channel remains the same, the overall losses could have the potential to grow by the same 47 percent over that time period. Seemingly at odds with the significant losses these companies are experiencing from the mobile channel, nearly two-thirds of the respondents

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felt that they could easily detect this form of fraud and remediate it. “Many organizations have a false sense of security based on what they have done in the past as it relates to typical fraud prevention,” said Angel Grant, senior manager at RSA. “All too often they are focused on the user experience first and look at security as a secondary priority. We commissioned this report to help educate the market

MOBILE PAYMENTS

Joe LaRocca

on the inherent risks that are emerging as this channel grows and to help our customers understand how they can build more secure online and mobile environments.” The survey also found that future measures currently being considered to improve the security of online and mobile transactions include advanced analytical tools, with more than 73 percent of participants indicating that they would be adopting the technology for mobile-optimized authentication techniques. This can be attributed to the maturity of the tools and the ability

to deploy them more easily, including cloud-based services as well as reduced costs of employing them. While the initial focus of the research was on online transaction through mobile applications and websites, there are correlations that could be made to mobile payments and mobile POS risks.

One More Consideration…

In October of 2015, the United States will begin the transition to EMV or chip-and-PIN or chip-and-signature technologies. EMV stands for Europay, MasterCard, and Visa and has been

a standard form of payments outside the US for several years. This shift is being driven by the fact that the US has emerged as the global capital for credit- and debit-card fraud, with a predicted $10 billion losses in 2015 alone. Chip-and-PIN technology reportedly provides more secure transactions particularly as it relates to card-present, in-store sales. The jury is still out on what its benefits will be as it relates to online transactions. When the technology was introduced in Europe, there were cases where online fraud rose as much as 150 percent.

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MOBILE PAYMENTS The biggest change to retailers with the transition to chip-and-PIN card technology will be the assignment of liability from any fraudulent transactions taking place in stores. For retailers that do not upgrade their POS infrastructure to accommodate this new payment form, the liability would shift to the retailer from the card issuer as it has been in the past. Most loss prevention executives have focused on theft as the biggest contributor to lost profits to their organizations as it can be measured in hard dollars. With the shift in liability, fraud will go from a balance sheet line item to a real drain on retailers’ operations. “Many retailers have not yet figured out how to handle this new way of thinking about fraud and its impact on their stores once the changes to credit and debit cards take effect, especially for those who cannot afford to immediately comply,” said Joseph LaRocca, vice president and senior advisor on loss prevention for RetaiLPartners and formerly with

Bill Inzeo

The Good News

Because widespread adoption of these new forms of payments is still in the early stages, there is the opportunity to plan accordingly. Walgreens. The nation’s largest drug retailing chain with over 8,000 locations, Walgreens has been accepting various types of mobile payments for several years. Walgreens’ acceptance of NFC payments across the chain enabled its first adoption of Google Wallet and the expansion of Apple Pay. Since rolling out the new payment form, Walgreens has seen little to no impact on fraud levels. The retailer credits it proactive approach to adopting new technology

also helps the transition process to proceed more smoothly. Walgreens’ asset protection solutions team actively participates in weekly meetings with its IT partners so that any changes being considered or made to the POS systems take into consideration the need for proactive protection against fraud. These proactive measures are then designed into the back-end processes and are systematically included. It also proactively educates its front-end cashiers on how to handle mobile payments. The same basic principles apply to mobile payments as to traditional credit- and debit-card

Walgreens, the nation’s largest drug retailing chain with over 8,000 locations, has been accepting various types of mobile payments for several years. Walgreens’ acceptance of NFC payments across the chain enabled its first adoption of Google Wallet and the expansion of Apple Pay. Since rolling out the new payment form, Walgreens has seen little to no impact on fraud levels.

the National Retail Federation. “The way we handle fraud incidents will change dramatically, not only from a liability standpoint, but also from the way those incidents will be processed through the legal system. Today card issuers can upload their cases in bulk, a process that is not yet in play for the retail community.”

to a successful implementation. For mobile payments that included a comprehensive communication strategy and partnering with key stakeholders within the organization as well as third-party providers, including its credit- and debit-card processor. Setting clear expectations and finding alignment and agreement at the start

transactions—the card must be present or the mobile phone must be present. One of the challenges Walgreens faced in rolling out mobile payments was the misperception on the part of the field organization that fraud would be more prevalent. The company put together a comprehensive communication strategy to educate the continued on page 50

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MOBILE PAYMENTS

The biggest change to retailers with the transition to chip-andPIN card technology will be the assignment of liability from any fraudulent transactions taking place in stores. For retailers that do not upgrade their POS infrastructure to accommodate this new payment form, the liability would shift to the retailer from the card issuer as it has been in the past. continued from page 48

field to help them overcome this misperception. “The biggest challenge we faced was the misperception that the risk of fraud would be greater with mobile payments than with the traditional credit- and debit-card swipe,” said Bill Inzeo, who is director, insights and intelligence, asset protection solutions for Walgreens. “We went to great lengths to educate our field organization that, if accepted according to policy, the risk factor does not go up with mobile payments.” When asked about the coming changes as it relates to EMV chip technology, Inzeo feels that the benefits far outweigh the challenges. Walgreens upgraded its POS systems a couple of years ago with an eye to future requirements. It made sure that all of its hardware was capable of accepting the new cards. They are now working with their programmers to develop code that will make accepting the new smart cards seamless to the customer and the associate. “When it comes to adopting new technology like mobile payments or chip-and-PIN cards, you need to approach it from a business and financial perspective without the emotional ties to fraud and loss,” said Inzeo. “We bring an objective point of view, evaluate the risk, and provide recommendations that protect our customers and the company, while delivering the shopping experience

this point with their mobile payment service provider, whomever they may be. Along with designing the interface for maximum ease-of-use for the consumer, retailers need to put network security at the forefront of the process. Echoing Walgreens advice, loss prevention teams need to be Paul Jones John Guenther involved from the beginning of any new project that has the potential to disrupt our customers and patients deserve business through loss or fraud. and expect.” “You need to be present from the start eBay. Online retail giant eBay has to be effective in the end,” stated Jones. perhaps the most experience with Heinen’s Grocery Stores. Regional mobile payments through its PayPal supermarket chain Heinen’s, based application. PayPal processed $46 out of Cleveland, Ohio, currently billion in mobile payment volume in accepts mobile payments in the form 2014, up 68 percent over 2013. of Apple Pay and Google Wallet at “Surprisingly, we have seen its twenty-two retail locations. The very little in the form of fraud company is also in the planning and attributed to mobile payments,” implementation stages of converting its stated Paul Jones, senior director payment terminals to accommodate the of global asset protection for eBay new EMV CHIP technology. and PayPal. “We attribute much According to John Guenther, director of that to a well-thought out and of risk management and information well-executed plan.” security for the merchant, the security When asked what retailers should challenges that exists between near-field consider when entering the realm of communications (NCF) technologies like mobile payments in their stores, Jones those found in mobile payment devices emphasized the need for structured and EMV chip-and-PIN technologies are agreements. Like his counterparts at quite different. Walgreens, he stresses the need for “NFC devices concentrate on expectations to be set up front along masking the consumer credit- and with alignment and agreement on debit-card information from the implementation. eBay offers its retail retailer point-of-sale terminals through partners protection against fraud by tokenization, while chip-and-PIN focuses assuming the risk and liability should on a more secure payment transaction by a fraudulent transaction occur with requiring a higher level of authenticating its service. He urges others to address continued on page 52 MAY - JUNE 2015

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MOBILE PAYMENTS continued from page 50

when using the card,” explained Guenther. “Both forms of payment still have the potential to be breached— mobile payments through loading fraudulent cards into the device and chip-and-PIN for online transactions.” Not unlike other retailers who have transitioned to the new payment technologies, Guenther’s advice is to develop a comprehensive plan and to be able to clearly articulate the goals and objectives behind making the proposed changes to the company’s payment systems. He recommends formalizing the project with a dedicated team, appointing a project manager to oversee all aspects of the conversion, engaging key stakeholders and third-party vendors, and asking the right questions from the start, such as: ■ What middleware applications will be affected? ■ What reporting functions will change and how? ■ Will this be a standalone, integrated, or semi-integrated process? These are just a few of the questions that will need to asked, answered, and understood for successful implementation. “In the end, this journey into alterative payment forms is consumer driven and really not an option for most merchants if they want to continue to achieve a high level of customer service and satisfaction,” said Guenther. “But along the way, it helped us create a heightened sense of awareness for PCI compliance and payment best practices for our organization.”

Prepare for the Future

While the type of mobile payments that consumers will ultimately adopt and the number of options available to them will continue to grow, one thing is certain—mobile payments are here to stay and will only become more prevalent in the years to come. In order to remain competitive, retailers will need to find ways to accommodate mobile payments and provide a seamless shopping environment for their customers while accepting a whole

host of mobile payments from a variety of devices. “Retailers will need to follow the emerging mobile market closely so that they can deliver on consumer demands,” concluded LaRocca. “At the end of the day, if a customer cannot conduct business in the manner that suits their individual needs, they will take their dollars elsewhere.” Preventing mobile payment fraud will take on a bigger role in the lives of many loss prevention executives with the upcoming shift in liability. But the good news in all of this is the fact that with proper planning, open dialogue with all key stakeholders,

advancements in technology, and a comprehensive communication strategy, retailers are in a good position to meet the challenges head-on. Those who have already ventured into the world of mobile payments have so far seen little to no disruption to their businesses and feel that the goodwill generated among their customer base is well worth the time and efforts invested. “Technology in the retail environment is always changing,” said Inzeo. “By being proactive, you can adjust to anything. If you are involved from the beginning of the process, you can find success.”

LEE A. PERNICE, LPC is a freelance writer with more than twenty years’ experience in the retail loss prevention industry. She has held director-level positions with leading high-tech and security solutions providers specializing in the areas of communications and marketing. Pernice is LPC certified and has a thorough understanding of the technologies used to reduce shrink and improve profits for retailers. She can be reached by email at leepernice@gmail.com or 954-682-8551.

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DIGITAL DIALOGUE By Jacque Brittain, LPC Brittain is editorial director, digital, for LP Magazine. Formerly a director of learning design and certification, Brittain managed the development of the LPC and LPQ certification programs in collaboration with the Loss Prevention Foundation. Prior to that he was vice president of operations for the industry’s largest executive search and consulting firm. In his thirty-plus years in the LP industry, he has helped build and enhance many learning initiatives and provided career counseling for thousands of industry professionals. Brittain can be reached at jacb@lpportal.com or by phone at 704-246-3143.

What’s the Right Path? E

xploring career options and determining the best way to reach our career goals is a journey that all of us have spent many sleepless nights pondering at different times in our lives and at different stages of our professional development. This is especially true in a field such as loss prevention, which for most of us wasn’t the path that we expected to be traveling when donning our high school caps and gowns right around this time of year a few…and for some of us more than a few…years back. This common query was a subject of recent discussion as part of a digital posting: “I have question for the group… I’ve been trying to find a multi-store leadership role in the LP field. The current company I work for does not offer any special certification or any local position above single store. What steps should I follow to make myself a more stand-out candidate?” This particular candidate has five years’ experience in LP, all while attending college. He has earned two degrees—a bachelor of science in biochemistry and a bachelor of business administration in finance. So what advice can we offer him? As one might guess, the suggestions offered were both diverse and plentiful: “I would strongly suggest that you follow your degree in business to find your answers.” “Get as much certification training in loss prevention/e-commerce as you can afford.” “Contact some of the recruiters in our field.” “Diversify. Today’s leaders in loss prevention need to bring the whole package to the table.” “Take a deeper look at your current employer.” “Get out of this dead-end job and find a company that offers you what you’re looking for.” “Take a one- to five-year detour into operations.” “Be patient. I spent several years working and learning before the right opportunity came along.” “Look at other areas of the company, such as safety or supply chain/distribution to gain additional management experience.” “Look into interview training such as W-Z’s CFI.” “Reach out to the LP Foundation to get your LPQ or LPC certification.” “Get out now and don’t waste your time. I’m now in law school wishing I did this years ago.”

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“Have you tried government positions? There are positions in Homeland Security and others you would probably qualify for since you have a BS.” “There are vendors that offer scholarships every year that can help you stand out. That is an option.” “The company I work for is always looking for great people if you’re looking for a new opportunity.” “Get involved in as many LP organizations as you can. Go to conferences and soak up all the knowledge possible. There are so many people willing to help, LP is a very tight community.” It was great to see the effort that so many put into providing career guidance to a fellow LP professional. Several offered personal assistance and additional support simply because the young man asked for it, which is what we’ve come to expect from the LP community.

Professional growth requires commitment, effort, flexibility, and patience. There are many companies out there that can provide you with a wealth of opportunities—and sometimes the program that you’re looking for carries the name currently appearing on your paycheck. Making the Journey

But what is the right path? All of us have heard many of the same suggestions that were provided by these discussion partners at different points in our professional careers. Having many years experience in executive search in my past life, I have heard all of these and many more. But as is so often true, making the right choice isn’t as simple as pulling a name out of a hat. continued on page 56 |

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name currently appearing on your paycheck. They have good leadership and a strong program. They provide guidance and mentorship. They offer the prospects for continuing growth and development. Rather than simply knocking on other doors, sometimes it’s best to start at home first. The key is finding the best path for you, based on what you want—as well as what you need from a professional standpoint—and showing the patience to allow the opportunities to unfold. For those that don’t find the answers in LP, I suspect that most knew from the beginning that this wasn’t the fit or the career that they wanted or had in mind. This can cause us to question our choices and fail to make the commitment necessary to find success. Eventually, most make decisions that will put them back on the right path. That’s the right decision for them and can prove to be a great decision based on what they want out of a career. But that doesn’t mean that you can’t or shouldn’t make a different decision for yourself. Staying current with developing trends and the need for continuing training and education is critical in order to remain relevant and a key aspect of moving forward at every level. Certifications such as LPQ, LPC, CFI, and similar areas of study provide exceptional opportunities for growth. Some, like LPQ and LPC, are eligible for college credits as well at both the bachelor’s and master’s levels. All of these programs also have online opportunities. Many companies also provide tuition reimbursement as long as the field of study is related to your career field. There are actually different solution providers that will offer scholarships for these programs as well. Check with your HR department to see if that’s a viable option.

Advice is typically given based on our own personal journeys. We look at our own experiences, our familiarity with similar situations, and our knowledge and understanding of the subject coupled with the information that’s been provided in order to form an opinion and offer potential solutions. As a result, any of these suggestions may be correct. All of them may be correct, or none of them may provide the best possible outcome. That’s because what’s missing—and must always be considered—is personal perspective. That part of the equation is a critical factor when making these life-changing decisions. It’s up to each of us to chose our own path, and then carry the commitment that brings it to fruition. Loss prevention is an evolving industry to be sure, and a profession that requires those that are willing to grow with it. But growth can take place in many different ways. Sometimes it may involve considering a different program with a different company and an alternative approach to loss prevention, asset protection, or profit protection—the many names for our profession. Sometimes it may mean looking at growth through other areas like operations, safety, or supply chain, as these are important aspects of becoming a well-rounded LP professional that are frequently overlooked. But just as often, the simplest solution can provide the best answer.

Growth can take place in many different ways. Sometimes it may involve considering a different program with a different company. Sometimes it may mean looking at growth through other areas like operations, safety, or supply chain, as these are important aspects of becoming a wellrounded LP professional that are frequently overlooked. But just as often, the simplest solution can provide the best answer.

Take the Steps

A simple and easy place to start is to stay informed. College is a great option, as are the industry certifications. But there are also other resources like LP Magazine that offer additional opportunities to stay current on the latest industry news and trends. That’s a great place to start and a convenient source of information. You can even get an app for your phone if you want. But it’s still up to you to make the first move. It’s your future. Most importantly, you have to start by looking at yourself first. Are you doing everything you can to get where you want to go, or are you waiting for the world to fall at your doorstep? Responsibility starts with the person staring back at you in the mirror. No one and no company is going to make those decisions for you, regardless of whose name is above the door at the store. As for our colleague that started this discussion, we have an ambitious professional that worked his way through five years of school to earn two college degrees in two very different fields of study. With his education just recently completed, he’s already asking, “How do I make the best possible decisions to help me get ahead? What do I need to do to help make myself successful?” These are the right questions, and will likely lead to the best possible outcomes. Standing up is the first step towards standing out. Patience friend—you’ll get there.

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FEATURE

ATTACKS ON POS SYSTEMS HITTING RETAILERS WHERE IT HURTS By JD Sherry

ATTACKS ON POS SYSTEMS

yberattacks and data theft are making headlines like never before, with some of the largest and most well-known brands—Target, Home Depot, Sony, Anthem—falling victim. With the frequency and pervasiveness of these attacks, executives in companies of all sizes and across industries are left asking, “If these businesses can be compromised, are we next?” But rather than being consumed by FUD (fear, uncertainty, and doubt), it’s time to be constructive and proactive to address these attacks. The new reality is when, not if, a data compromise will occur. Embracing the fact that these criminal acts

are lucrative and very difficult to prosecute has created a new paradigm in the retail landscape. As long as computers and the Internet serve a central role in commerce, these attacks are not going away.

POS: A Major Target

Over the last eighteen months, we have seen a tremendous amount of data leakage from retailers that have had their payment-card systems compromised. This not only includes credit card information stolen from the point-of-sale (POS) registers or terminals, but other sensitive customer information as well, such

as address, date of birth, telephone number, email addresses, and more. Statistics show that 50 percent of the readers of this article have had to replace one or more credit cards in the last eighteen months due to a point-of-sale hack. This is of great concern, to say the least. Last year, the FBI issued an alert to retailers indicating that we had seen just the tip of the iceberg as far as the emergence of malware designed to penetrate and capture our sensitive data. True to this warning, more and more infections and security breaches regarding POS systems have been reported since then. The good news is that the situation isn’t hopeless. However, it does require proper planning and investment in new approaches to skill development and technology implementation. It also requires innovative ways to deconstruct and analyze how these targeted attacks evolve within your networks.

Payment-Card Data Theft

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Stealing payment-card data has become an everyday crime that yields quick monetary gains. The goal is to steal the data stored in the magnetic stripe of payment cards, (optionally) clone the cards, and run charges on the accounts associated with them. Criminals have been physically skimming payment cards, including both debit and credit cards, for years now. Common techniques for skimming payment cards include: ■ Making a rub of the card, ■ Rigging ATMs or gas pumps with fake panels that steal data, ■ Modifying store POS terminals, and ■ Using off-the-shelf hardware keyloggers on cash registers. These techniques all require physical access to the cards or the devices used to process them. This introduces a high risk of getting apprehended. Plus, skimmers cannot be readily mass deployed for maximum effectiveness. Therefore, criminals have begun changing their focus to using malicious software to steal payment-card data—primarily credit card data.

ATTACKS ON POS SYSTEMS

Soraya

Dexter

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JackPOS

Alina

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2009

2010 2011

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2012

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2013

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2014

2015

History of POS RAM Scraping

The earliest evidence of POS RAM scraping was in the Visa Data Security Alert issued on October 2, 2008. Back then, cybercriminals attempted to install debugging tools on POS systems to copy credit card data from RAM. POS RAM scrapers have quickly evolved since then to use multiple components and exfiltration techniques. To get a better perspective of the evolution of POS RAM scraper malware families, see the timeline diagram above, organized by year of discovery. Note that a malware variant may have existed long before it was discovered, so it is difficult to track exact dates. Although most people may not have heard of these malware variants, this diagram will still show you how the frequency has continued to increase over the last several years. A couple of notes regarding the timeline diagram: ■S even unique POS RAM scraper families were discovered between 2009 and 2013. ■N ine unique POS RAM scraper families were discovered in 2014 alone. ■T he arrows connecting the bubbles indicate either a direct evolution or technology reuse.

Credit Card Hacking 2.0

POS RAM scraping is a software methodology for stealing credit card data. After the merchant swipes the credit card, the data on the card temporarily resides in plain-text format in the POS software’s process memory space in random access memory (RAM). The magnetic stripe on the back of the credit card contains three data tracks. Credit cards use the first two. When the credit card is swiped, data from

these tracks are read into the POS software’s process memory. POS RAM scraper malware retrieves a list of running processes on the victim machine, loads each process’s memory space in RAM, and searches for the credit card data residing there. The malware scrapes the payment-card data from RAM and exfiltrates it to the cybercriminals. The stolen tracks’ data can be used to physically clone the credit card or can be used in fraudulent LP MAGAZINE | MAY - JUNE 2015

card-not-present transactions, meaning online purchases.

Promoting Security beyond Compliance

POS security can no longer be a checkmark on an audit to-do list. It has become a business driver—an integral component of business operations. Proactivity is a must because every business that possesses or processes credit card payments is a target for POS data theft.

ATTACKS ON POS SYSTEMS To effectively protect against POS RAM scraper attacks, businesses need to protect all aspects of their operating environments, not just the POS systems. Attackers can gain initial entry into the corporate network using compromised credentials or via phishing emails. From there, they can locate the POS systems and infiltrate them. The key to setting up a strong defense is to understand the nature of the threat. In the case of POS RAM scrapers, this means understanding the malware’s attack chain. Through countless hours of research, security analysts have been able to see trends and patterns on how these attacks persist and, ultimately, the success that they have in stealing sensitive data. As companies formulate defense strategies, they should keep in mind the following: ■S ize of the organization—Large organizations have complex networks with thousands of

The new reality is when, not if, a data compromise will occur. Embracing the fact that these criminal acts are lucrative and very difficult to prosecute has created a new paradigm in the retail landscape. As long as computers and the Internet serve a central role in commerce, these attacks are not going away.

continued on page 62

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ATTACKS ON POS SYSTEMS

How Do Hackers Infiltrate?

Retailers and other businesses that process credit cards, irrespective of their size, are data-theft targets. The most convenient place to steal credit card data is from the RAM of POS systems where the data temporarily resides in plain-text format during transaction processing. The challenge for the cybercriminals is to find a reliable method to infect POS systems. Some of the common infection methods are described below. Inside Jobs. The “inside job” is the most difficult infection vector to prevent, since it involves people that businesses trust or those who can abuse their privileges to commit crimes. These could include disgruntled or disillusioned employees out to take revenge or even just unscrupulous individuals out to make some quick cash by victimizing their employers. Phishing and “Social Engineering.” POS RAM scrapers are never spammed out to millions of potential victims. Instead, they are sent to a chosen few targets via phishing emails with effective social-engineering lures. Small businesses often use their POS servers to browse the Internet and check email, thus making them easy targets of phishing attacks. It’s not a bad idea for loss prevention professionals to look into developing company policy against using POS servers this way. Read “Techniques, Lures, and Tactics to Counter Social Engineering Attacks” to learn more about this type of attack at the Dark Reading website (darkreading.com). Vulnerability Exploitation. New software vulnerabilities are disclosed and patched every month by their respective vendors. Only a handful of these are successfully “weaponized.” Once weaponized, the vulnerabilities will be used in cyberattacks for years. These exploits are able to successfully compromise systems when IT has not rigorously applied these vendor patches. The reality is that many POS servers are still running outmoded, unsupported operating systems. PCI-DSS Non-compliance Abuse. Payment Card Industry Data Security Standard (PCI-DSS) refers to a set of requirements designed to ensure that companies that process, store, or transmit credit card information maintain a secure environment. PCI-DSS does not offer new secure technologies to protect electronic payment systems. It does provide requirements to build up additional layers of security controls around controls that already exist. Hardening systems and networks (making them more secure) is not a trivial task. Companies that lack expertise or resources often incorrectly configure their POS environments, making them susceptible to malware attacks. Targeted Cyberattacks. Targeted POS RAM scraper attacks are attacks aimed at large businesses with millions of credit cards. There are six different stages of these attacks, from ensnaring a victim to exfiltrating stolen data to the black market. Some of the most malevolent attacks of all, these targeted assaults are meticulously planned and well executed, making them notoriously difficult to detect.

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connected devices, multiple locations, and so on. Security solutions must be scalable, should be able to defend complex networks, and must be centrally managed. ■ Costs—Security solutions can become expensive, especially when the organization requires multi-tiered defenses. Businesses should factor in the costs of in-house and/ or externally contracted IT services required to manage the deployed security solutions. ■ Multi-platform support—Many businesses support several major operating system (OS) platforms in their operating environments, so security solutions must be able to protect all of them and provide centralized management of the protected devices. ■ Bring your own device (BYOD)—Organizations are LP Round 2 Final.pdfcontinued 1 5/7/2015on 9:28:37 pageAM64

Target, P.F. Chang’s, UPS, Home Depot…the list continued to grow and hasn’t stopped yet. Dozens of other organizations that process payments have fallen victim to targeted attacks. It’s time to be forward-thinking about where this market is going and spend money on the right payment platform that will scale for the masses for the foreseeable future.

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increasingly moving toward implementing BYOD policies as a means of cutting costs and giving employees flexibility. BYOD policies introduce new challenges regarding securing employee-owned devices that are accessing the organization’s resources. ■ Consumers and end users will also have to adopt a “shared-security” attitude—This includes taking steps to ensure that their BYOD devices are protected. As we move to a more frictionless form of payment capability, we must ensure that the devices that we enable to carry out these payment transactions are pristine. We will also have to embrace multi-factor and biometric capabilities to help thwart future attacks.

Time for Forward Thinking

Implementation of EMV (Europay, Mastercard, Visa) chip-and-PIN technology as well as next-generation payment platforms and e-wallet capabilities will certainly help reduce the aforementioned POS attacks, but won’t guarantee the complete elimination of payment attacks. Retailers and financial institutions need to work diligently to determine the possible failure modes of their own systems [see “Mobile Payments—The New Retail Revolution and Its Impact on LP” on page 43]. Retailers should be spending money on creating rich POS payment applications that are securely tied to our mobile devices and that can leverage cheap technology to process and transmit transactions. In my opinion, this is preferable to spending hundreds of millions or billions of dollars implementing chip-and-PIN technology that will be cumbersome for consumers to leverage in two to three years (if not sooner). At the rate that this technology is advancing, this form of payment will be outmoded quickly. The cost of implementing the chip-and-PIN technology for the card issuers and

The “inside job” is the most difficult infection vector to prevent, since it involves people that businesses trust or those who can abuse their privileges to commit crimes. These could include disgruntled or disillusioned employees out to take revenge or even just unscrupulous individuals out to make some quick cash by victimizing their employers. retailers will be exorbitant. We should demand more from our companies and challenge them think much bigger. In January 2014, the FBI warned that we hadn’t seen the end of the POS breaches. The agency was correct. Target, P.F. Chang’s, UPS, Home Depot…the list continued to grow and hasn’t stopped yet. Dozens of other organizations that process payments have fallen victim to targeted attacks. It’s time to be forward thinking about where this market is going and spend money on the right payment platform that will scale for the masses for the foreseeable future.

It is crucial for retailers to implement breach-detection capability to deconstruct and analyze suspicious campaigns. Finding out about a breach sooner rather than later means maximizing the chances for damage control. Knowing is 90 percent of the battle in stopping exfiltration in your organization. As a loss prevention professional, it’s not beyond your scope to ask your IT department hard questions about what they are doing to prevent these thefts. In fact, every employee should feel comfortable asking these questions. In today’s climate, we truly are all risk managers.

JD SHERRY is a cybersecurity expert and CEO of cloud-security provider Cavirin Systems. He is frequently interviewed by television and industry press on topics related to cybersecurity and cybercrime prevention. Before coming to Cavirin, Sherry spent a decade in senior IT leadership roles for notable software companies. He can be reached at jdsherry@cavirin.com.

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Remote Connectivity: Easier, Faster, Better LP T

Gerald Becker is vice president of physical security at USS. He is known industry-wide for his expertise in deploying digital video management solutions on a large scale in both private and public sector. Becker holds multiple patents for physical security innovations that he has developed. He holds an MBA in information systems from the University of Redlands and a BS degree in technical management from DeVry University.

Faster Training. The second big benefit of remote connectivity is faster training. Old-school installers typically didn’t do any training; they just installed. Here is one recent example. A large retail chain did a pilot with two companies, with each doing video installations in six locations. The installs were completed, and then the retailer waited and waited for the training. After three weeks of no training, the retailer’s LP team finally went out to each location and trained the employees themselves. Who has time for this, especially when opening a large number of stores? A true integrator will take full advantage of remote connectivity and train the retailer’s employees quickly and efficiently. Why? Let’s face it—until the employees can use the system to its full potential, the ROI cannot be fully realized. The training can take shape in many different ways, from the quick start guides and training videos to live online training sessions to logging into the system together with key personnel and walking them step-by-step on how to operate it. Cheaper Maintenance and Service. Finally—and this is a huge cost-saving benefit—having remote connectivity means quicker and cheaper maintenance and service. What happens with old-school systems when a camera goes down? You place the call. The service company rolls the truck. The technician gets on site, climbs on the ladder, tries to figure out what’s wrong, realizes he doesn’t have the part he needs, goes back, and orders the part. A week or two later he comes back with the part and installs it. All the while the retailer’s camera is down, and the retailer’s service charges are piling up. On the other hand, an IP system with remote connectivity allows the service company to do marvelous things, such as remote system configuration, tuning, troubleshooting, and even repair. In our experience, we’ve found that 70 percent of common problems can be repaired remotely in a matter of minutes, saving the customer unnecessary expense of dispatching the truck. And in the 30 percent of cases where on-site visit is required, the remote diagnostics means the technician knows ahead of time what the problem is, has necessary parts, and can complete the repair in the minimum amount of time. The age of analog is slowly coming to a close, and the new age of IP is bringing exciting new possibilities. Remember to not just look at the most dazzling aspects of new technology, but also look for the huge benefits hiding in unexpected details. Talk to your technology integrator about using remote connectivity for installation, training, and service. Every detail counts when trying to stay competitive, and every part of your investment should make your LP operations run easier, smarter, and better.

he basic notion behind IP technology is that video and other security systems are now on a network. This allows LP teams to access these systems remotely from anywhere, and get things done with incredible efficiency. But while almost everyone is familiar with the most popular benefits of IP systems—viewing high definition video remotely, expanded reporting capabilities, and integration with other platforms—there are three huge benefits that don’t get much discussion. These are more efficient installation, faster training, and cheaper maintenance and service. Let’s review them one by one.

The age of analog is slowly coming to a close, and the new age of IP is bringing exciting new possibilities. Remember to not just look at the most dazzling aspects of new technology, but also look for the huge benefits hiding in unexpected details. Efficient Installation. In the olden days of CCTV systems, installations were really simple. Almost anyone who could install lighting could also put up a camera and run cable to connect it. This is not the case with new IP systems. You now need people who understand computer networking and have the capability to troubleshoot these systems beyond just connecting the cable to an edge device and turning on the lights. These people are not cheap, and dispatching them for on-site installations is not cheap either. This is where remote connectivity comes into play. The systems integrator can still dispatch a basic installer who will hang the cameras and run the cable, and then the network expert dials into the system remotely, configures it, tunes it, and brings it online. By doing this, two objectives are accomplished—costs are kept down, and the quality of installation is kept high.

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EVIDENCE-BASED LP

Focusing on What Offenders Think R

by Read Hayes, PhD, 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. © 2015 Loss Prevention Research Council

Our research team is now working with executives from forty-five retail chains, over forty LP solution partners, and multiple product manufacturers to further refine prevention. Our three primary prevention tools include: ■ Making a crime more difficult to pull off (increase effort), ■ Making a crime seem way too risky (increase perceived detection/response risk), or ■ Helping the offender recognize their crime won’t get them what they want, that it won’t be rewarding enough (benefit denial). As I’ve discussed before, we’ve also learned to deter offenders. ■ See—They need to know what deterrent measures we’ve deployed. ■ Get—They need to understand what these measures will do to them. ■ Fear—And they need to believe that these measures are a very real clear and present danger to their criminal plan. By breaking our efforts down to these simple components, we can make incremental improvements in our processes and technologies. We aren’t flying blindly. We are focused on offender perceptions and responses, and we’re further dialing in our efforts on what all has to happen to deter someone. Hence, evidence-based LP practice is our protocol and our best hope. In future columns I will strive to keep you informed of some of the strides we’re making in real stores, real distribution centers, and real parking lots.

eally, it’s not us; it’s them. Hopefully, you and I are not the target audience of our crime and loss prevention efforts. So as I’m prone to say a lot, our main focus should be on what offenders think and not on what we think or believe. It’s all about what an offender perceives and how they respond.

The Psychology of Deterrence

We should all work together to gain a much deeper understanding of what drives individuals to seek or seize a crime opportunity. What are they looking to get or attack? Why? What are they thinking? What are they looking for? What do they notice? How do they perceive our environments? How do they tend to respond to protective cues?

Evidence-based LP is tough and requires expertise, resources, patience, and time. But most of us have learned the right way to do things is usually the toughest way. A commitment by LP and industry leaders to moving our discipline from anecdote to fact-based practice will pay off.

Leadership

Relationships and leadership make the world go round. Or at least they help us set and stay on the right path. And the retailer-driven Loss Prevention Research Council (LPRC) is no different. Far-sighted LP leaders realized fifteen years ago that protecting people and places needed more science and better process to improve their organizations’ goals. That leadership continues today at the LPRC. Innovative LP practitioners are leading the council’s ten working groups and setting the direction and actionable research results for these groups. Likewise, the LPRC’s board of advisors (BOA) is leading the overall group’s vision, strategy, and priorities. To that end, the BOA members were hosted by Tractor Supply Company in April at their beautiful Nashville-area headquarters. The BOA reviewed 2014 to 2015 research efforts and results to date, and the LPRC process, and set upcoming priorities. The current LPRC board of advisors is shown in the box on page 70.

People are all a little different. We all come from different genetic pools, home environments, experiences, and peer groups. And that does make a difference in noticing and responding to protective items or people. But we need to continue enhancing our anti-crime investments. There is still a ton of improvement opportunity. Stressed, distracted, and even impaired offenders are still largely missing or dissing our crime deterrent measures. That’s why US retailers continue losing billions of dollars and are still experiencing weekly violence and fraud.

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LPRC Board of Advisors

Impact Conference 2015

Brian Bazer, dressbarn Bobby Bull, Cam Connections Erik Buttlar, Best Buy Tim Fisher, T-Mobile Dan Geiger, Target Chris Gillen, Toys“R”Us Scott Glenn, Sears Holdings Mike Lamb, LPC, Walmart Kevin Larson, Kroger Steve Longo, CAP Index Chad McIntosh, Bloomingdale’s Barry Poole, Mead Johnson Scott Pronger, Meijer Linda Reiring, Proctor & Gamble Steve Scott, Tractor Supply Byron Smith, 7-Eleven Bill Titus, PricewaterhouseCoopers Jack Trlica, LP Magazine Kevin Valentine, LPC, Sterling Jewelers Claude Verville, LPC, Lowe’s John Voytilla, Office Depot/OfficeMax Dennis Wamsley, Publix Super Markets

It will be tough to match—much less beat—the amazing 2014 Impact experience, but Toys“R”Us Vice President Chris Gillen and his Impact conference planning team are working hard to do just that. Last year’s conference participation doubled from the usual 100 executives to 200, so Toys“R”Us' Gillen and Josh Machtinger, Bloomingdales’ Fred Becker, and Walmart’s Carlos Bacelis are busy planning the event hosted by the University of Florida to be even more engaging and informative. I invite you to learn more about the annual Impact conference and to consider joining us in Gainesville on October 5–7.

Recommended Reading

Criminal Behavior: A Psychosocial Approach, 7th or 8th edition by Bartol and Bartol discusses offenders from a social, biological, and psychological perspective. The book shows how modern theory and research indicates criminal offenders are products of biological makeups, as well as being embedded in and continually influenced by the social and built environments they grew up and move around in. This book should provide further illumination for LP professionals since we must better understand why employees and visitors alike break rules and hurt people.

industry leaders to moving our discipline from anecdote to fact-based practice will pay off. LP effectiveness, efficiency, and financial impact increases. The respect and ability to communicate and “sell” LP programs is enhanced. And we have evidence to back this claim up.

Wrap Up

Evidence-based LP is tough and requires expertise, resources, patience, and time. But most of us have learned the right way to do things is usually the toughest way. A commitment by LP and

The Spring Issue of LP Magazine EU Feature articles include: ■ How Superdry Brand Became Focused on Counterfeit Merchandise ■ Why Europe Is Bidding for the BID Movement ■ ECR Europe: The Power of Partnerships ■ Dutch Supermarket Giant Albert Heijn’s Waste Journey Reduces Costs and Carbon ■ Plus much more

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MY TURN By Walter Palmer, CFI, CPP, CFE

One Question to Improve Your Store Visits F

Walter Palmer, CFI, CPP, CFE, is president of PCG Solutions, a loss prevention training and consulting firm. Prior to moving to the vendor side, he spent sixteen years as an LP executive with Babies“R”Us and Kay Bee Toys. Palmer is cofounder of LP Magazine and LPjobs.com and remains a contributing editor to the magazine. He is very active in the LP industry as a frequent speaker at industry events both in the US and internationally. Palmer can be reached at 859-963-3517 or via email at wpalmer@pcgsolutions.com.

you just one question that will immediately improve your interactions, your relationships with store management, and the success of your audit program: “Before we review these audit results, can you please tell me some of the successes you’ve had and progress you have made since I was last here?” That’s it—an open-ended question that invites the manager to talk about what they believe is going well. This accomplishes a number of things: ■ Builds rapport with the manager, ■ Allows for positive recognition, where appropriate, ■ Gives you a sense of where their priorities are based on how they respond, ■ Checks to see if their perception matches your perception of reality, and ■ Distinguishes whether problems are because they don’t know they exist or because they haven’t gotten to them.

or market, district, and regional-based loss prevention personnel, store visits are a key component of their responsibilities. Of course, there are many reasons for store visits, ranging from an investigation to a special event to a physical inventory. But none is more common, more routine, and more important for many programs than the audit where LP checks for compliance, monitors progress since a previous visit, and talks with store staff about what is going on in their store.

Non-Productive Visits

Having observed hundreds of inspections over the years, it has been my experience that the most effective field LP people are those who excel at the people aspect of the store visit. Almost any person can learn to audit for compliance. It is simply a matter of knowing what to check and what the current protocol or procedure is for the organization. However, because audits are usually measured against a standard, this is often where the focus lies. One standard they are measured against is how many audits each staff member makes in a week, month, year, or per store. Another standard they are measured against is average audit score by district, region, or LPM, often against an organizational standard that has been set by corporate. Alternatively, the measuring stick might be the amount of improvement that the stores achieve from one audit to the next. While the motivations for all of the above are correct and necessary, they can sometimes lead to non-productive behavior where the focus of all efforts is to audit as quickly as possible, document the findings, give the store management team a congratulations or scolding, and move on to the next task, investigation, or store visit as quickly as possible.

The best LP managers are the ones who take quality time with the store staff—both management and front-line associates—to solicit input, share progress, and do one-on-one training. This is just a short list of what you can determine with this question. For instance, you may have a manager respond with something like, “Well, really, there isn’t much to brag about. We’ve really been struggling operationally because...” And, then they will give you their perception of why they haven’t made progress. You already know they have not based on your audit, but now we start to get the reasons why. We all get in a rush with all that is on our plates, but try using this simple question to make sure you have a meaningful interaction with the store team every time you are in the store.

Quality Time with Store Staff

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INDUSTRY NEWS by Robert L. DiLonardo

Perspective on the Cost of Fraud in Retail

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 (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.

fraudulent transactions per month as compared to the number of successful fraudulent transactions per month. The bad news is that the number of successful fraudulent transactions has risen over the past four years, jumping from an average of 91 per month last year to 133 per month this year—an increase of over 46 percent. The good news is that the number of prevented fraudulent transactions has also increased over the four-year time period, jumping from an average of 94 per month last year to 165 this year—an increase of over 75 percent. So if we compare the number of prevented fraud transactions to the number of successful fraud transactions, we find that the fraud prevention batting average is rising. Last year merchants prevented 94 per month, and the crooks were successful 91 times per month —a ratio of 1.03 (anything over 1.0 is considered “good”). This year merchants prevented 165 per month, but lost 133—a ratio of 1.24. Thus, the tide seems to be turning in favor of the good guys.

ecurity issues surrounding e-commerce and m-commerce (mobile) have earned quite a bit of attention from the press during the past year and rightly so. LexisNexis recently published its sixth annual study that values the actual cost of fraud borne by US retailers. Entitled “The True Cost of Fraud 2014” (lexisnexis.com), the study’s objectives are to present key findings and specific guidance to retailers for mitigating these costs. Researchers from Javelin Strategy and Research surveyed 1,142 risk and fraud decision makers and influencers from retailers of all sizes, markets, channels, and payment methods. Respondents included executives from a very wide range of retail classifications, including automotive, housewares, computers, hardware, restaurants, drug/health, gasoline stations, textiles, sporting goods, general merchandise stores, non-store retailers, and miscellaneous. The research covers so-called “consumer-facing” retail fraud methods listed below, but does not include information on fraudulent activity or theft by employees. ■ Fraudulent and/or unauthorized transactions ■ Fraudulent requests for a refund/return ■ Bounced checks ■ Lost or stolen merchandise, as well as redistribution costs associated with redelivering purchased items (including carrier fraud)

The Cost of Fraud

Merchants lost an average of 0.68 percent of sales to consumer-facing fraud, which is 33 percent more than the previous year’s rate of 0.51 percent. The increase in losses is the result of a higher volume of fraudulent transactions this year. The study subdivides the fraud losses by segment. While the average of all merchants lost 0.68 percent of sales, m-commerce merchants lost 1.36 percent, international merchants lost 1.21 percent, and large e-commerce merchants lost 0.85 percent of sales. Merchants also incurred more ancillary costs in addition to fraud losses. Each dollar of fraud cost them $3.08, compared to $2.79 last year, according to the LexisNexis® Fraud Multiplier™. Ancillary costs include charge backs for merchandise, the fees and interest to financial institutions and payment processors, as well as any replacement, redistribution, or restocking fees incurred by a merchant. The rise in costs is associated with an increase in m-commerce fraud, as more retailers begin to accept mobile payments.

Recommendations

The report suggests that the best way to get a handle on fraud and its related costs is tracking incidents by channel and payment method. Every payment method and channel shows a unique risk profile and may require different steps for mitigation. Tracking helps merchants assess the need for investment in fraud prevention solutions. The available solutions may need to be tailored to the type of channel and payment method. The analysts also recommend that m-commerce merchants and those considering accepting payments from this channel should

Fraud Prevention Batting Average

Since we are in the business of loss prevention, I was fascinated by the data showing the number of prevented

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Launched November 2012, the Fight for $15 movement was founded in an attempt to raise the minimum wage to $15 an hour. With the current federal minimum wage standing at $7.25 per hour, this would more than double that wage rate. The movement began with a walkout of quick-casual restaurant workers in New York and has gained momentum ever since. In early December 2014, workers staged one-day demonstrations in over 190 cities, creating what has been called “the largest labor protests in the nation in years.”

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implement fraud prevention solutions that specifically address the unique threats. Mobile is a growing fraud channel that carries the same fraud liabilities as other “card not present” transactions, except contactless NFC payments. As m-commerce expands beyond the digital-goods realm, the costs associated with this fraud type increase. Solutions such as device fingerprinting and geolocation are among the options best suited for mobile transactions. It doesn’t take a genius to understand that we will be continually chasing the criminal element involved in retail payment transaction fraud, and all other retail frauds for that matter. What matters is our relentless pursuit of countermeasures that keep us steps ahead, instead of behind. To read more about the challenges associated with mobile payments, see “Mobile Payments—The New Retail Revolution and Its Impact on LP” on page 43 in this issue.

The Cost of Doing Business

The Fight for $15: What Does It Mean for our Workforce? By Jacque Brittain, LPC

“Hard working men and women deserve the opportunity to earn a wage that they can live on. They should be able to put food on the table, have a roof over their heads, and provide for a family without having to work three jobs and seventy-plus hours a week to make it happen. They should be able to support themselves, their families, and their neighborhoods. They should be treated with dignity and respect. They shouldn’t be forced to rely on public assistance to provide for basic necessities like food, rent, transportation, and healthcare for their children.” There are very few people with any level of human compassion that could or would disagree with statements like these, which are commonly used as rallying remarks tied to the “Fight for $15” campaign. But what’s the best way to get there? How do we distinguish between providing the opportunity to earn a living wage and mandating that every position provides that wage? What expectations are then attached? Should a young person assuming their first job working at a quick casual restaurant be entitled to a starting wage that could support a family? Should an adult working that very same job assume that they should then earn a wage that can support a family? Where’s the balance? There are many difficult questions and far fewer answers. According to National Retail Federation statistics, retail is the nation’s largest private-sector employer, supporting one in four US jobs—42 million working Americans that add trillions of dollars to the nation’s economy. Quick-casual restaurants are a $200 billion a year industry that employs approximately 4.5 million, according to the Bureau of Labor Statistics. Many of those that hold these positions begin at an entry level as they learn the business and develop the skills and experience to contribute to the success of the organization. Training and development opportunities and performance-based incentives typically provide the means for advancement and higher wages. Yet many of those that continue to hold entry-level positions can struggle to make ends meet. Many of those that remain at these entry level wages must find other ways to complement their income.

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Outside of the cost of goods, payroll remains one of the highest expenses for most retail and related businesses, often accounting for 20 to 35 percent of gross income, according to many typical business models. These numbers can rise substantially in service-related industries where payroll may account for up to and exceeding 50 percent of gross income. performance raises and other associated programs and incentives. How would an initiative that calls for an increase that more than doubles the minimum wage impact the operation of these businesses? Other than the potentially devastating impact of the increased costs, how will this affect the overall management of payroll dollars? Especially for those businesses that operate primarily with employees that earn wages on the lower end of the pay scale, such as quick-casual businesses and similar operations, this type of increase could ultimately threaten the viability of many operations. Most businesses simply can’t—or won’t—absorb all of these costs. Fundamental principles of economics tell us that costs won’t simply be absorbed by the business owner, as some have suggested. These expenses would be largely addressed in other ways. “Businesses would first look for ways to reduce their payroll expenses, and for many this would mean significant staff eliminations,” claimed a high-level representative for a quick-casual restaurant. “Companies will also explore new ways to increase automation and reduce payroll. Additional responsibilities will |

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have to be linked to certain staff positions as a result. Benefits could be further impacted. Raises could be highly moderated and substantially cut back. Significant changes will come as companies look for ways to reduce costs and remain profitable, and many of those changes will directly impact the workforce. “And what about employees that have worked hard to earn increases based on service and performance? It’s highly unlikely—virtually impossible—to expect that they would receive proportional increases. In fact, it could likely have a negative impact by lowering performance increases and other opportunities as companies react to the situation. How will our employees respond when non-skilled, entry-level workers are coming in with little or no experience making the same wage?” the representative asked. Another quick-casual restaurant executive stated, “Some smaller operations simply won’t be able to absorb the costs and will have to shutter their businesses. Larger operations will redefine the business model, eliminate jobs, and pass on many of the costs to the consumer. It’s not as simple as just giving everyone a raise. There would be consequences, and those consequences would be shared.”

Muddying the Waters

Looking at many of the websites and articles that promote the “Fight for $15” campaign, you’ll find that the push isn’t simply to raise wages for the employees that work in these establishments or to simply improve the quality of life for hard-working individuals. In fact, if you look at most of these campaigns closely, a secondary motive stands out very clearly. The actual campaign slogan used by the official Fight for $15 reads, “The Fight for $15 campaign is seeking a $15-per-hour

From a loss prevention perspective our primarily responsibility is to ensure that appropriate steps are taken to ensure the safety and security of our employees, customers, and facilities if and when incidents occur at our locations. This is best accomplished by taking proactive measures through planning, training, awareness, and strategic action. living wage and the right to form a union without retaliation.” Union movements are deeply entrenched in the Fight for $15 campaign. There is a strong push by several labor organizations to attach union representation to these efforts and to use the campaign to compel workers to form labor unions in restaurants and other retail establishments. For instance, many of the recent protests were backed largely by the Service Employees International Union (SEIU). “The Fight for $15 movement is growing as more Americans living on the brink decide to stick together to fight for better pay and an economy that works for all of us, not just the wealthy few,” said Mary Kay Henry, president of the SEIU in a recent interview.

According to The New York Times, the SEIU has supplied more than $10 million to help finance the organizing operations. This is a strong message and a powerful reminder that a power-in-numbers approach to workforce issues still carries tremendous value and relevance. Unions remain an active and influential force in the business world, commanding our continued attention and respect. Historically, they have provided a strong resource and a powerful voice for the American worker. But is this what the employees are looking for? Are these workers looking to improve their wages and quality of life, or are they looking to create a union? Is that what the workforce wants, or is this a situation where there are other motives or interests muddying the waters? While it’s very easy to see how these movements can be tied together, we are really addressing two very different issues. As a result, multiple agendas can cloud the message, question motives, raise additional concerns, and ultimately impede both progress and outcomes. LP Magazine did reach out to the Fight for $15 campaign and the SEIU for comment and additional clarification, but have not received any response regarding our requests at this time.

Safety and Security Concerns

Does every man and woman deserve the opportunity to earn a wage that they can live on? Is there a difference between having that opportunity and requiring that every potential employment prospect provide that opportunity? Should the minimum wage be increased to $15 an hour? How do we define “fair pay?” Will such increases have harmful and lasting impacts on many business operations? Will this lead to loss of jobs and employee unrest? Is the introduction of additional labor unions part of the answer? When it comes to matters of this nature, passion and emotion are often tied to our responses. When coupled with large groups, public space, and conflicting opinions, this clearly has the potential to lead to safety and security concerns in locations where demonstrations are held. While many demonstrations are peaceful, some situations have escalated with protesters taking a more aggressive approach to share their message. “There have been incidents of vandalism, violence, and intimidation,” revealed a representative from a national food chain. “Protesters will enter our locations and take over the restaurant. There have been times when we’ve had to lock the doors to protect our customers and our staff.” Ironically, many of these incidents are allegedly carried out by individuals who aren’t employees and have no direct connection to the businesses being targeted. According to one high-level representative for a quick-casual restaurant, “When we look at most of the protests that have taken place in our restaurants, the overwhelming majority of those participating aren’t actual employees, but rather union demonstrators and others with no ties to the company. Several white fourteen-passenger vans will show up at our sites with protesters quickly moving in to disrupt our business, berate our customers, and taunt our employees. Conversations quickly shift from employee rights to union organizing. Employees have even been followed to their homes and aggressively pressured to sign union cards,” he stated. So what steps are taking place to protect the customers, the employees, and the locations? In response to these potential

LP MAGAZINE | MAY - JUNE 2015

issues, many organizations have devoted additional resources and put protocols and practices in place to help mitigate potential incidents if and when they occur. “Our primary goal is to keep everyone safe,” stated a representative for a fast-food company. “We’ve strengthened our security resources, developed action plans in the event of an incident in the stores, and held training sessions with our management teams on how to respond. Safety is paramount, and it begins by treating everyone with dignity and respect. We will not tolerate physical or verbal altercations in our locations. We will shelter in-store and lock the doors if necessary or simply close the location to protect our employees and customers.” Additional steps may include developing closer relationships with law enforcement agencies in high-risk areas, cooperative action plans, monitoring social media, postings prohibiting loitering and solicitation, and similar strategies to limit incidents and improve safety. Companies must also remain aware of and in compliance with relevant

labor laws and similar regulations whenever there is any potential for these directives to apply to the situation.

Next Steps

As is true in response to many complex issues, balance and compromise is likely part of the solution. “We feel that overall we have a very good relationship with our employees, and we certainly want that to continue,” stated a high-level representative for one quick-casual restaurant. “We want to be transparent and treat our employees fairly and with the utmost respect. We want our employees to have options and be content with their jobs. But there has to be balance.” When such calls for change occur, balance is a key word. While our nation’s economy has gone through some harsh times over the past several years, it’s been six years since the federal minimum wage has increased. Despite President Obama’s push last year to raise the federal minimum wage to $10.10 an hour, Congress has yet to make any moves in that direction.

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The federal minimum wage is applicable nationwide and overrides any state laws that provide a lower minimum wage rate. However, while states can’t impose a lower minimum rate, they can enforce a higher wage rate. This year a majority of states have boosted their minimum wage above the federal minimum wage, which may put pressure on Congress to move toward increasing the federal minimum wage for the first time since 2009. Some companies are taking their own steps to improve employee salaries. For example, Walmart recently announced that 500,000 full- and part-time associates—more than a third of its work force—will receive pay raises to at least $9 an hour, which is $1.75 above the federal minimum wage. By February of 2016 that increase will be raised to at least $10 an hour. The company further vowed to invest more in training to give entry-level workers greater chance for promotion and other career advancement. In a recent statement, McDonald’s said, “At McDonald’s we respect everyone’s right to peacefully protest. The topic of minimum wage goes well beyond McDonald’s—it affects our country’s entire workforce. McDonald’s and our independent franchisees support paying our valued employees fair wages aligned with a competitive marketplace.” The company also said that any minimum wage increase should be implemented over time to reduce the impact on business owners. From a loss prevention perspective our primarily responsibility is to ensure that appropriate steps are taken to ensure the safety and security of our employees, customers, and facilities if and when incidents occur at our locations. This is best accomplished by taking proactive measures through planning, training, awareness, and strategic action as necessary and appropriate based upon the specific situation at hand. Contemplating the message behind these efforts, most of us want the same thing for those that work hard to make a living and support our businesses and our economy, even if we don’t always agree on the best way to get there. As these efforts move forward, we should also be able to agree that prudence and common sense should guide our decision making, helping us to find the best and safest solutions for all concerned.

PEOPLE ON THE MOVE David Bunch is now a Senior Regional LP Manager for 24 Hour Fitness. Nathan Bandaries is now an AP Manager, ORC, for Albertsons-Safeway. Jeff Manni is a new AP Manager for American Girl. Sha Kusuman was appointed Regional LP Director, East Coast, for Barneys New York. Tony Seidita is now Area LP Manager for Bed Bath & Beyond. Chris Scheutzow, LPC and Everett Pascual are now Area AP Managers for Big Lots. Steven Pace was appointed Operations Vice President, LP and Risk Management, for Bloomingdale’s. Jamie Bailey, CFI is now a Regional LP Manager for The Children’s Place. Rudy Vidal is now a Regional LP Manager, and Mark McDermott is now the Market Investigator Program Manager for CVS. Sonya Richey was made LP Manager, Distribution Center, for DICK’S Sporting Goods. Dollar General announced that Jennifer Walker Dotson, CFI and Ken English, LPC are now Regional AP Managers; Brian Morrison was appointed Director of AP, Distribution Centers; and Tim Bartkowiak, LPC was appointed Divisional Director of AP. Julie Saitta was made a Regional LP Investigator for DSW. Brad Reeves was appointed Manager of AP for Five Below. Mike George was appointed Regional LP Investigator for Floor and Décor. Nicholas Mitchell was made a Regional LP Manager for L Brands. Gabriel Levit, CFI is now a Regional AP Manager for Luxottica Group. Todd Scott was made a Regional LP Manager for National Stores. Shawn Zehel is now National Investigations Manager for Newgistics.

Sal Miele was appointed Director of LP for NPC International. Sean Galli, LPC is now a Regional LP Manager for PETCO. Michael Mata was appointed Director of LP for Roger Dunn Golf Shops. Kersonder Williams and Valerie Laschen are now Area LP Managers for Ross Stores. Earnest Stewart was made Senior LP Specialist for Santikos Theatres. Johnny Custer, CFI, LPC was appointed Director of Asset and Profit Protection Analytics for Sears Holdings. Michael Burch, CFI was appointed Divisional Vice President of LP and Risk Management, and Bill Lehman was appointed Regional LP Manager for Tilly’s. Angelo Chavez was appointed West Coast Regional LP Manager for True Religion Brand Jeans. Christine Mullins was made Regional LP Manager for Tuesday Morning. Johnathan Owad is now LP and Safety Manager, Distribution/Fulfillment Centers, and Mark Woodrick is now Regional LP Manager for Urban Outfitters. Lauren Danchick was made Senior Manager of Recovery Client Services for The Zellman Group. Cody Anderson is now an AP Manager, and Anthony Williams was appointed Director of AP, Northeast Division for Walmart. To stay up-to-date on the latest career moves as they happen, sign up for LP Insider, the magazine’s weekly e-newsletter, or visit the People on the Move page on the magazine’s website, LPportal.com. Information for People on the Move is provided by the Loss Prevention Foundation, Loss Prevention Recruiters, Jennings Executive Recruiting, and readers like you. To inform us of a promotion or new hire, email us at peopleonthemove@LPportal.com.

LP MAGAZINE | MAY - JUNE 2015

CALENDAR May 3 – 6, 2015 Retail Industry Leaders Association Asset Protection Conference Gaylord Palms Resort & Convention Center Orlando, FL rila.org May 13, 2015 National Law Enforcement Officers Memorial Fund 27th Annual Candlelight Vigil National Law Enforcement Officers Memorial Washington, DC nleomf.org June 16 – 17, 2015 Australia Retail Loss Prevention Summit 2nd Annual Retail LP Conference & Expo Bayview Eden, Melbourne, Victoria, Australia retail-lossprevention.com.au June 23 – 25, 2015 National Retail Federation NRF PROTECT Conference & EXPO Long Beach (CA) Convention Center nrfprotect15.nrf.com August 2 – 5, 2015 Restaurant Loss Prevention & Security Association 2015 Annual Conference M Resort Spa and Casino, Las Vegas, NV rlpsa.com August 3 – 4, 2015 Twin Cities ORC Association TCORCA Training & Conference 2015 Crowne Plaza Minneapolis West Plymouth, MN tcorca.org August 19, 2015 Georgia Retail Association 5th Annual GRAORCA Retail Crime Conference AmericasMart Atlanta (GA) graorca.org August 31 – September 2, 2015 Security100Summits Security100 Retail Scottsdale (AZ) Marriott at McDowell Mountains security100summits.com/retail September 8 – 9, 2015 International Supply Chain Protection Organization 2015 Conference Scottish Rite Children’s Hospital Conference Center Dallas, TX iscpo.org September 28 – October 1, 2015 ASIS International 61st Annual Seminar and Exhibits Anaheim (CA) Convention Center asisonline.org

ADVERTISERS Agilence...................................................................... 23 agilenceinc.com/retail-2020 Alpha............................................................................ 18 alphaworld.com American Public University...................................... 42 studyatapu.com/lp-mag Axis Communications................................................ 49 axis.com/lovehate Cambridge Security................................................... 41 cambridgesecurityservices.com CAP Index.................................................................... 17 capindex.com/outsmart CEC............................................................................... 21 correctiveeducation.com Checkpoint.................................................................. 19 checkpointsystems.com ClickIt Inc.................................................................... 25 clickitinc.com Contact, Inc................................................................. 71 contactinc.com Detex............................................................................ 13 detex.com Diebold Security......................................................... 55 diebold.com/lpmagazine FireKing Security Group............................................ 21 fireking.com Ganz Security Systems............................................. 63 ganzsecurity.com Industrial Security Solutions.................................... 46 isscorpus.com InstaKey Security Systems...................................... 31 instakey.com Intelligent Loss Prevention....................................... 45 intelligentlossprevention.com International Assoc. of Interviewers...................... 73 certifiedinterviewer.com ISCON.......................................................................... 62 isconimaging.com Kenwood..................................................................... 61 kenwoodusa.com/protalkinfo LockUp by Digilock.................................................... 53 lockup.com Loss Prevention Foundation..................................... 67 losspreventionfoundation.org LNL Systems............................................................... 35 lnlsystems.com LPI................................................................................. 78 lpinnovations.com LPjobs.......................................................................... 69 lpjobs.com LP Software................................................................ 37 lpguys.com March Networks........................................................ 27 marchnetworks.com/lp NAVCO........................................................................... 7 navco.com NRF PROTECT............................................................. 39 nrfprotect.com/register NuTech National........................................................ 51 nutechnational.com Palmer, Reifler and Associates................................. 2 palmerreiflerlaw.com Protos Security............................................................. 3 protossecurity.com The Retail Equation...................................................... 5 theretailequation.com/success RLPSA.......................................................................... 75 rlpsa.com Salient Systems.......................................................... 60 salientsys.com Securitech..................................................................... 9 securitech.com/simplythebest Security Resources................................................... 83 securityresources.net S-TRON........................................................................ 33 stronbi.com Turning Point Justice................................................ 47 turningpointjustice.com Tyco Integrated Security.......................................... 84. tycois.com/retail USS................................................................................. 1 universaleas.com/ip Verisk Retail................................................................ 65 veriskretail.com

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LP MAGAZINE | MAY - JUNE 2015

Verisk Retail David Duhaime President Verisk Crime Analytics

PARTING WORDS

Making a Difference

Jim Lee, LPC Executive Editor

If someone has made a difference in your life, seek them out and say, “Thank you.”

aking a difference in someone else’s life can be as simple as a smile, lifting a hand to help, or lending an ear to listen, especially when it might be easier to ignore the opportunity. Each day is a new day and a new chance to use what you’ve worked for and been given to lighten someone else’s load. It’s never too late to choose to move beyond success to significance. Those are the thoughts of Becky Halstead, retired US Army Brigadier General and author of The First Person You Must Lead Is You. I had the chance to hear her for my third time at the RILA Asset Protection Conference, and it is always inspiring. I keep her book handy and often refer to it. It is a great read filled with wisdom and passion. If that sort of stuff is of interest to you, I highly recommend that you get a copy. The conference gave me the opportunity to listen and observe many in loss prevention who are making a difference in others’ lives. What was really well done was the balance between tactics—ORC, analytics, exception reporting, safe work practices, audits, leveraging EAS to enrich the customer experience—and leadership principles. It is in this area of leadership that I walked away with several pages of what I call thought provokers or tidbits for self-improvement.

Success ended at midnight last night. Success is often achieved by undertaking calculated well thought out risks. ■ What if and why not? ■ Did you get what you asked for, and was it what you expected? ■ David and Goliath story—underdogs can wind up beating the odds. ■ Go for the yes and don’t be surprised with no. No may just mean not now. ■ We need the people who drive the truck; they are critical to the execution team. ■ Listen to those who have different ideas. ■ Success is a team sport. ■ Personal accountability is the dog tags of character. ■ Tune out the voices; stay in your lane. ■ If you are going through hell, don’t slow down; keep on moving. You may get out before the devil knows you are there. ■ Keep making a difference. Be steadfast. The source for all of these come from Halstead, Voels, Maxwell, Gladwell, Sell, and Clarke. ■ ■

John Hegan

On a sad note, the industry lost one of the true pioneers and gentlemen in loss prevention. John Hegan passed. John was an executive with Bamberger’s and Macy’s. Prior to retirement, his last assignment was managing the Thanksgiving Day parade. None better. He made a difference, and we are all better off for it. If someone has made a difference in your life, seek them out and say, “Thank you.”

Tidbits of Wisdom

Here are some one-liners that I can keep near. Everyone has their own Mt. Everest to climb. Focus on the rungs of the ladder, one step at a time. ■ Life is 10 percent what happens to me and 90 percent how I react to it. ■ People may hear your words, but do they feel your attitude? ■

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May - June 2015

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PRODUCT SHOWCASE

STRATEGIES

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MY TURN

INDUSTRY NEWS

PARTING WORDS

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