September - October 2013

LPPORTAL.COM | V12.5 SEPTEMBER- OCTOBER 2013

LOSS PREVENTION

MAGAZINE THE VOICE OF LOSS PREVENTION

MOBILE POS THE BRAVE NEW WORLD OF RETAIL LP EXECUTIVES WHO CHANGE ROLES PROFILE OF BIG-BOX RETAILER H.H. GREGG THE GOOD, BAD, AND UGLY ASPECTS OF TECHNOLOGY

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CONTENTS

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Mobile POS: The Brave New World of Retail

How smartphones and tablets are changing the store environment

6

PUBLISHER’S LETTER LP Magazine Europe

By Jack Trlica

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ON THE WEB

10

RETAIL SPONSORS

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INTERVIEWING A Lie…Is It Or Isn’t It?

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

26

EVIDENCE-BASED LP From Technicians to Behaviorists

By Read Hayes, Ph.D., CPP

38

CERTIFICATION The Value of Membership in a Professional Association

By Jeff Levitt, LPC, CPP

57

SOLUTIONS SHOWCASE - Protos Security

60

INDUSTRY NEWS - Japanese Seniors Out-Steal Teens - The Passing of an Icon: John H. Christman - Store Theft Metrics Continue to Climb

By Robert L. DiLonardo

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CALENDAR

63

PEOPLE ON THE MOVE

64

ADVERTISER DIRECTORY

65

VENDOR SPONSORS

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PARTING WORDS Bumping into People

By Jim Lee, LPC

By Chris Trlica, Contributing Writer

29

Where Are They Now?

Interviews with LP executives who changed roles

By James Lee, LPC, Executive Editor

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LPM 0913-B.indd 29

9/18/13 11:10 AM

An Upper-End Electronics Retailer with a Lowercase Name Profile of h.h. gregg

By Adam Paul, Contributing Writer

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The Evils of Technology

How hardware and application enhancements have changed your world and may drive you crazy

By Kevin M. Plante, LPC, CVS Caremark

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SEPTEMBER - OCTOBER 2013

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PUBLISHER’S LETTER

LP Magazine Europe

T

he idea of an international version of this magazine has been the subject of discussion periodically for some time.

Several years ago, in fact, we produced several issues with special sections devoted to articles generated by authors outside of North America to test the waters. For various reasons, including the recent recession, we decided to wait…until now.

Earlier this year we formed a strategic alliance with London-based ORIS Media, an extension of ORIS Forums that has been organizing events for retail loss prevention practitioners and law enforcement partners in the United Kingdom for several years.

ORIS Media is managed by Louise Henham and John Wilson, both well-respected communications professionals in the U.K. retail LP community.

LP Magazine EU will launch as a quarterly print publication, starting with a winter issue in fourth quarter this year.

Associated online vehicles, including a digital edition, website, and e-newsletter, will be available in the same timeframe.

The goal is to produce a high-quality, comprehensive set of communication vehicles similar to the U.S. offerings, produced by on-the-ground writers, expert commentators, academics, and retail contributors focused on loss prevention issues unique to the European market.

Just as this magazine has earned a reputation as the voice of the loss prevention industry over the past twelve years, LP Magazine EU will strive to play the same role across Europe. Launching a new magazine is never easy, especially in today’s rapidly evolving publishing world. But based on feedback from both EU-based retail executives and their solution provider

MAGAZINE 700 Matthews Mint Hill Rd, Ste C Matthews, NC 28105 704-365-5226 office, 704-365-1026 fax

partners, we believe that LP Magazine EU can and will be a well-received and successful venture.

In today’s economic world, with U.S.-based retailers supporting international operations and product manufacturers and service providers with global reach, LP Magazine and LP Magazine EU combined will help bridge the international communications gap, offering educational content, best practices, regulatory issues, and technology solutions of interest to LP professionals on both sides of the pond.

To find out more about LP Magazine EU, either as a potential subscriber or advertiser, I encourage you to contact Louise at louise.henham@orismedia.eu or John at john.wilson@orismedia.eu.

EXECUTIVE EDITOR James Lee, LPC JimL@LPportal.com CONTRIBUTING EDITORS Robert L. DiLonardo Walter E. Palmer, CFI, CPP, CFE CONTRIBUTORS Dave DiSilva Read Hayes, Ph.D., CPP Richard C. Hollinger, Ph.D. Adam Paul Gene Smith, LPC Shane G. Sturman, CFI, CPP Chris Trlica David E. Zulawski, CFI, CFE CHIEF OPERATING OFFICER Kevin McMenimen, LPC KevinM@LPportal.com DIRECTOR OF MARKETING Merek Bigelow MerekB@LPportal.com DIGITAL EDITOR John Selevitch JohnS@LPportal.com DESIGN & PRODUCTION SPARK Publications info@SPARKpublications.com 704-844-6080

Jack Trlica Editor and Publisher “We were delighted to have been approached as the preferred partner for LP Magazine in the EU. It is a publication that enjoys a fantastic reputation on both sides of the Atlantic and being presented with the opportunity to produce a version for the European LP community is a real honour. There is nothing like it outside of the U.S. and, from issue one, we will strive to maintain the high-quality editorial standards established over the last twelve years—a de facto benchmark that aims to educate and inform LP practitioners and bring something extra to their important jobs.”

Louise Henham, ORIS Media

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.

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EDITOR AND PUBLISHER Jack Trlica JackT@LPportal.com

SEPTEMBER - OCTOBER 2013

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CREATIVE DIRECTOR Larry Preslar PROOFREADER Amy Trainor ADVERTISING

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

NEW OR CHANGE OF ADDRESS www.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.

© 2013 Loss Prevention Magazine, Inc.

ON THE WEB

EYEONLP

Check out the EyeOnLP page at LPportal.com for the latest videos featuring LP executives and top solutions providers, plus assorted videos we think will interest the industry, including a “tip of the week” from Wicklander-Zulawski.

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

Bob MacLea Senior Vice President, Loss Prevention, TJX

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

Chris McDonald Senior Vice President, Loss Prevention, Compass Group NA

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

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

Charles Delgado Vice President, Asset Protection, Meijer

Mike’s Life Lessons–After 35 years in the LP industry, Mike Lamb, LPC of Walmart offers some interesting lessons, like “The best ideas come from the field.” This from a corporate headquarters guy?

Columns

There are a number of new articles on the magazine website you may have missed. Visit the Columns page at LPportal.com for these and many more.

Fifty Dash One?

By William Klimczuk How fifty, one-minute conversations a day can affect your shrink results and change behaviors.

Applying Van Halen’s M&M Test to LP

By D.B. “Libby” Libhart What can an 80s rock band teach us about testing and training our employees?

The Value of a Whistleblower

By Chuck Gallagher Change the perception of reporting improper coworker behavior to build a culture of ethics in your company.

Hacking Loss Prevention

By Brandon Brown, CFI A three-part series that focuses on methods of achieving superior results through ingenuity and practical advice.

Patti Felz Vice President, Loss Prevention, Polo Ralph Lauren Tim Gorman Senior Director, Asset Protection and Business Continuity, Walgreens Barry Grant Senior Vice President, Operations & Loss Prevention, CPI Corp Bill Heine Senior Director, Global Security, Brinker International

Using Legislation to Win against ORC

By Millie Kresevich Through the efforts of national and state retail associations, LP practitioners, and others, twenty-one states have passed ORC legislation.

Sonya Hostetler Vice President, Asset Protection & Safety, Walmart Stores U.S.

LP Insider

Be sure to sign up for the latest news and original content in our LP Insider e-newsletter—every Thursday and NOW every Monday. Our Monday Five brings you five news items you can use to start your week, followed

by Thursday’s comprehensive look at the week in the retail LP industry. Go to the e-Newsletter link on LPportal.com to sign up.

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Tom Roan Group Vice President, Loss Prevention, Macy’s Tim Shipman, LPC Director, Corporate Investigations and Crisis Management, Delhaize America Mark Stinde Vice President, Asset Protection, 7-Eleven Paul Stone, LPC Vice President, Loss Prevention and Risk Management, Best Buy Bill Titus Vice President, Loss Prevention, Sears Holdings

Frank Johns, LPC Chairman, The Loss Prevention Foundation

Claude Verville, LPC Vice President, Loss Prevention, Safety & Hazmat, Lowe's

Gary Johnson Vice President, Loss Prevention, Vitamin Shoppe

Stanley E. Welch, LPC Vice President, Director of Loss Prevention, jcpenney

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

Keith White Senior Vice President, Loss Prevention and Corporate Administration Gap Inc.

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

SEPTEMBER - OCTOBER 2013

Dan Provost, LPC Vice President, Global Loss Prevention, Staples

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LP MAGAZINE | SEPTEMBER - OCTOBER 2013

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INTERVIEWING

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

A Lie…Is It Or Isn’t It? A

cademic researchers have spent a considerable amount of time learning what behaviors investigators rely on to determine if an individual is being deceptive. They have also identified many common behavioral observations that the public believes indicate that a person is lying.

Many people believe that when an individual refuses to make eye contact, there is a strong indication the person is being deceptive. People also believe that gestures of the hands and arms while telling a story is an indication of a lie being told. The researchers have also decided our ability

Unfortunately, we doubt that there will ever be a single behavior or group of behaviors identified that will allow an interviewer to identify a lie with high reliability. It is much more likely that the interviewer will be able to identify a subject’s concerns about a topic, word, or question that will require additional probing to ascertain its real meaning. to detect a lie is at a chance level—50-50 like the flip of a coin. And in a classroom setting with low levels of stress on the study participants and using an artificial experience, it is extremely difficult to detect a deception.

However, this is nothing like the real-world situations we work in where a person’s liberty, reputation, and livelihood might be at risk. Our experience indicates investigators are much better at identifying deception than chance levels.

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Zulawski and Sturman are executives in the investigative and training firm of Wicklander-Zulawski & Associates (www.w-z.com). Zulawski is a senior partner and Sturman is president.

Sturman is also a member of ASIS International’s Retail Loss Prevention Council.

They can be reached at 800-222-7789 or via email at dzulawski@w-z.com and ssturman@w-z.com.

Spots of Behavioral Change

Academics have studied individual behaviors looking for that single nonverbal cue that always strongly indicates a person is lying. Not surprisingly, they have not identified a single behavior that always strongly indicates an individual is being deceptive. In fact, most behaviors, when viewed individually, are not strongly associated with deception. This shouldn’t be surprising, since people will often lie differently within several sentences. For example, in one instance a person might cross their arms, while in another they may avert their eyes, then in another situation they may lock themselves in place.

The best lie detectors are not looking for individual behaviors, but rather “on time” changes in behavior that indicate a potential “concern.” We could call these “spots of behavioral change”—red flags, hot spots, concerns, trigger points, or any other name. But they indicate a moment of stress in the subject we are speaking with. These behaviors may be triggered by a change of topic, presentation of information, use of a particular word, or a question posed by the interviewer and can occur in a variety of conversations.

In a field situation the stimulus may be an officer approaching a group on the street. The officer’s appearance is a stimulus triggering the fear of detection of the individual carrying the gun. His behavior begins to change as the threat to his freedom approaches—increase tension, his movement away from the group, or a sudden stillness makes his behavior appear different from his friends.

The shoplifter differs from other customers because of what he is about to do and the fear of discovery of his actions. Only further investigation and observation can determine the truth.

Establishing a behavioral norm for an individual before beginning the interview is an important component in establishing a baseline of behavior for comparison. When a change of behavior is noted, it may be the result of any of a number of reasons, such as the individual was: Deceptive, Surprised by the inquiry or topic, Fearful of a secondary issue, Concerned about his previous statements in light of new information,

SEPTEMBER - OCTOBER 2013

continued on page 14 |

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Embarrassed, or Another reason.

A person who is embarrassed or concerned about a secondary issue may, in fact, offer behavioral clues or concerns that would be similar to the deceiver.

Identifying Deception

As we continue this discussion, we will use Dr. Paul Ekman’s definition of lying: “Lying is an act whereby someone deliberately misleads another and does so without notifying that person that he or she will be misleading them. The key here is that the individual is deliberately and knowingly presenting inaccurate information to another to conceal the real situation.”

Unfortunately, when we observe a behavior occur at a particular point in the conversation, we may not be able to discern whether the individual is lying to us, is concerned about some other issue, or whether the behavior was simply an anomaly. What we can do is further explore that particular area of the conversation to determine what the true reason for the behavioral change is and its consistency.

The interviewer has several advantages, both physiologically and psychologically, to assist him in determining whether the subject is attempting a deception.

The autonomic nervous system causes physiological changes in the body in response to emotions, such as fear, in order to protect the individual by preparing him to fight or flee.

These emotional triggers cause changes such as an alteration of the breathing pattern, dilation of the pupils, blanching or flushing of the skin, perspiration, or any of a multitude of other notable observations.

Besides having to deal with the physiological changes of the body, the liar must also cope with psychological changes and the related pressures they manifest on the individual’s thought process. Researchers have coined this “cognitive load.” Essentially, cognitive load is the pressure an individual is under when he is thinking on his feet as he attempts to lie, continues to lie, or decides what to do next.

There are several behaviors an interviewer can observe that indicate a person is thinking about his answer. By the way, just because a person is thinking about his answer does not mean he is attempting to deceive; he may be merely gathering his thoughts to provide a thorough answer. The context of the person’s pause should provide the interviewer some sense of whether there is an attempt to deceive in play or if he is merely making sure the answer is correct.

When an individual attempts to deceive, he must balance the lie against what he believes might be known or potential evidence that could contradict his statements. Clearly, this will require time to evaluate his situation before he presents his next statement. This pause will often cause the deceiver to appear more tense, stiff, and less cooperative in giving a complete rendition of events. The more general a lie, the easier it will be to avoid contradictions with other witnesses

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or evidence. Simply stated, the less detailed the lie, the safer it is to tell.

The easiest type of lie for a person to tell is one which reduces the cognitive load and the concern about contradictory witnesses or evidence. That type of lie is a “lie of omission.” A lie of omission uses the truthful events while omitting those details that would be incriminating, such as “I went to the mall this afternoon and then came back to the house.”

Here the deceiver left out the fact that between leaving the mall and arriving home, he had robbed a convenience store; otherwise his story is the truth. Because of the general nature of the story, the liar can alter or fabricate information or other details if it proves necessary later.

Cognitive load—thinking—requires time to decide what to say next. To cover this delay, the deceiver may use a variety of tactics, such as repeating the question, offering non-responsive statements before answering the question, body shifts, hand-and-arm movements, or language artifacts, such as “ah,” “um,” or clearing the throat.

Another common response we see is for the subject to sit stiffly, with little or no movement of the arms and body, while the individual focuses on the interviewer’s questions.

The liar may also have additional pauses during his answer as he searches for and tests each word and sentence against what he has said previously or what he may have to say in the future. These pauses during the sentences may cause repeats of words, such as “I...I...I guess then we went to...” or simply a slowing of the words as he becomes more careful in his selection of them. The voice around these pauses becomes garbled, soft, or trails away as the person speaks about an area of concern.

A Difficult Process

Having a conversation with another person, especially a deceiver, is an especially difficult communication model. The interviewer who is able to observe changes in the voice, the pattern of speech, and movement of the body can identify areas of concern where the individual fears his lies could be detected. By identifying these areas, the interviewer can explore them in detail to determine if it is deception or an unrelated issue causing the changes.

Unfortunately, we doubt that there will ever be a single or group of behaviors identified that will allow an interviewer to identify a lie with high reliability. It is much more likely that the interviewer will be able to identify a subject’s concerns about a topic, word, or question that will require additional probing to ascertain its real meaning.

If the individual is already concerned about a particular topic or point in his alibi, the interviewer’s probing of that area should increase the cognitive load and fear of detection, thus increasing the leakage of behavioral clues for evaluation.

In our next column we will examine ways to explore and evaluate these hot spots, giving the interviewer further advantages in the conversation.

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COVER FEATURE

MOBILE

POS

THE BRAVE NEW WORLD OF RETAIL

By Chris Trlica, Contributing Writer

THE BRAVE NEW WORLD OF RETAIL

I

n the beginning, there was the cellular phone. Then arose a new kind of phone, from whence sprang generation upon furious generation of increasingly intelligent smartphones. Today, we are beset by a dazzling menagerie of devices, their displays populating the length spectrum from thumb to forearm, but each one portable, and, crucially, each one embedded with a radio transponder or five. Welcome, Human, to the brave new world of the mobile device in retail.

Mass-market consumer communication devices have changed everything. Or, at least, their influence has touched nearly everything that’s a part of the modern world. According to the International Telecommunications Union, during the period between 1990 and the end of 2012, cellular phone subscriptions grew from 12.4 million to more than 6.8 billion. And it has really been only in

deployed en masse is to carry out one overarching commandment—“Thou shalt provide superior customer service.”

Mobile smart devices are being rolled out as customer service tools because they have the real potential to shake to the core the way many retailers approach customer interaction. “A good example is an electronics retailer that we work with,” says Alan Dabbiere, chairman of leading mobile device management company AirWatch.

“They used to train their employees on all the products that would come in and hope that they learned enough to be able to service the customer. But they realized it was a losing battle. Electronics were changing too quickly for their employees to keep up with everything. 10,000 new SKUs every month is just too much.

“So they reversed the process, providing employees

“Imagine not just having a couch in inventory, but being able to hold up your tablet beside it and cycle through the thirty fabrics it comes in. Or if you’re selling jewelry, you might not have all your jewelry SKUs in one store, but you can take the smart device and flip through everything else that’s available. So now you’re taking expensive, limited retail space and making it much more productive relative to the breadth of product line. It’s the integration of multichannel retail onto the selling floor.”

Alan Dabbiere, Chairman, AirWatch

the past few years that consumer use of IP-enabled mobile devices has reached the critical mass necessary to support the mad diversity of curiously useful, disruptive software “apps” flooding the market today.

In retrospect, it seems like it was only a matter of time before smart mobile devices would infiltrate the retail ecology, and, like the introduction of a non-native invasive species, precipitate a shift in common processes and interaction modes. Now that consumer-grade mobile devices have the power and adaptability to be pressed into service for a wide variety of retail uses, for many retailers they’ve come to be regarded as a kind of retail Swiss Army knife. Mobile devices have considerable utility for internal-facing work, such as training and inventory management, but the reason they are being

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with mobile technology equipped to look up all the information they would need,” explains Dabbiere, “and instead of expecting them to learn the ins and outs of each new wave of gear, just taught them how to look it up. Teach a man to fish as opposed to give a man a fish. And they were able to greatly improve their customer service.”

Armed with a portfolio of product data, images, related products, and promotional videos, all a finger tap away, a sales associate becomes a product prodigy—if not in truth, then at least in appearance and ability. The salesperson is equipped with an arsenal of new tactics, from video demonstrations to enhance upselling, to using a customer’s loyalty card to look up her purchase history

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THE BRAVE NEW WORLD OF RETAIL and tailor individualized recommendations based on her aesthetic, brand, or price preferences.

Many surveys show that two of consumers’ biggest complaints with retailers are: Why does it take so long to give you my money, and Why don’t your employees know anything about the product that I came in to buy?

A mobile device in the hands of a properly trained sales associate can immediately address both of these problems. It provides access to a wealth of knowledge about the product of interest, and, should the customer make a purchase decision, it lets them immediately check out. Many of the most important benefits of smart mobile devices, to retailers and consumers alike, are transactional—they’re dependent upon the mobile device functioning as a point of sale (POS).

The Mobile Point of Sale

“What exactly is mobile point of sale? I think it differs in definition from retailer to retailer,” says Karl Langhorst, director of loss prevention at The Kroger Co. “During discussions with other folks in the industry, it quickly became evident to me that mobile POS solutions in the eyes of one retailer were not the same solutions in the eyes of another retailer.” Indeed, the term “mobile

point of sale” has been used to refer to any one of a family of technologies that introduce a mobile device into the process of completing a retail transaction. However, only two arrangements have seen much commercial use as yet.

The most widely known, widely deployed variation features a smartphone or tablet equipped with hardware to accept a credit card. This allows a sales associate to roam the floor, provide customer service as normal, close a sale, and then complete the transaction then and there, using the mobile device’s camera to scan the item and swiping the customer’s card to pay. This saves the customer the hassle of waiting in lines and dealing with other employees, while also providing a more personally tuned customer experience. This is the situation most often associated with the phrase “mobile point of sale,” and is the system discussed in this article.

Such an arrangement works beautifully for, say, an apparel retailer or other retail segment with characteristically small numbers of items purchased per transaction. As the number of items increases, however, the system becomes more cumbersome, to the point that counter space, bagging stands, and two free hands begin to sound like increasingly good ideas. This is why the grocery industry typically has a different system in

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THE BRAVE NEW WORLD OF RETAIL mind when they refer to mobile point of sale; a system that will be explored more fully in Part 2 of this article in the November-December issue, but is described briefly as follows. This second system can be seen as an extension of the self-checkout common today in many grocery stores. After the customer takes an item off the shelf, she’ll scan the barcode using an app provided by the retailer and running on a smart device. Then she’ll put the item in the cart, bagging it as she goes. When she’s finished shopping, she’ll pay at a self-checkout by waving a barcode displayed on her smart device at the kiosk. Customers get to avoid checkout lines, bag their groceries the way they prefer, and enjoy features such as the device displaying a running total of everything scanned. Retailers benefit from customer-driven automation of their operation. And they also benefit from giving their customers options.

“For us, it just comes down to meeting the needs of the customers,” says Langhorst, “and one thing our customers want are checkout options. If you come to our stores, we have a manned check stand and a self-checkout option and customers can decide on their own which they want to utilize. Now mobile POS is another potential option.”

Vast Potential

One of the early appeals of mobile point of sale in retail was “line busting,” meaning easing the pressure of long checkout lines. Having mobile-POS-toting employees dynamically respond to changing line length would keep customers from enduring their dreaded long wait in line, while at the same time making more efficient use of store labor. Another benefit touted in the early days of mobile POS adoption was the physical space it was possible to

repurpose by scrapping some of the fixed cash registers in exchange for mobile devices. Valuable real estate on the sales floor could be reclaimed from what has always been a sort of necessary evil.

But the reason many retailers are so enthusiastic about adopting mobile POS today has less to do with reactive damage control like line busting and more to do with proactively enhancing, or even reinventing, the mode of interaction between customers and store associates. It has less to do with scrounging an extra few pitiful square feet of floor space for product display and more to do with linking the physical retail space to the vast potential of virtual, networked space.

“So much of traditional retail,” says Dabbiere, “is the salesperson doing all this work to get the consumer to the point of purchase, and they’d go stand in that line and have second thoughts or run out of time or get frustrated and you’d end up with tons of merchandise left there in the checkout line. It’s very valuable to be able to move that sales transaction to part of the normal customer-service selling process as opposed to the very disjointed function of first help your customer, get that product into their hands, then point them to a register, or drag them to the register that may or may not even be available.”

A lifetime of habit can make it seem odd to complete a sale away from a register, but making a payment directly to the sales associate who has personally been helping you, rather than to some other employee across the store in cash-register land, does make a this-is-how-it-ought-to-be kind of sense. The act of transferring ownership, as the last action of a customer before leaving a store, can help to solidify the customer-salesperson relationship, increasing

“What exactly is mobile point of sale? I think it differs in definition from retailer to retailer. During discussions with other folks in the industry, it quickly became evident to me that mobile POS solutions in the eyes of one retailer were not the same solutions in the eyes of another retailer.

For us, it just comes down to meeting the needs of the customers, and one thing our customers want are checkout options.”

Karl Langhorst, Director of Loss Prevention, The Kroger Co. 18

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THE BRAVE NEW WORLD OF RETAIL the value of that relationship. And the employee suddenly has a much easier time upselling or cross-selling. “By having this window into all of this product information, and possibly past purchase information, a customer service representative becomes a much more effective tool to the consumer than they were before,” says Dabbiere.

“They can recommend related products—the McDonald’s ‘would you like to supersize that?’ situation. They’re able to sell more, provide better customer service, and get a higher close rate through these mobile technologies.”

And when a customer is looking for an item that’s not in stock, or has her heart set on style number 6312, even though it’s not normally available in her region and would have to be special ordered, mobile devices can save the sale. “You can use this technology to show SKUs or other versions of those products that are not in stock,” Dabbiere explains. “Imagine not just having a couch in inventory, but being able to hold up your tablet beside it and cycle through the thirty fabrics it comes in. Or if you’re selling jewelry, you might not have all your jewelry SKUs in one jewelry store, but you can take the smart device and flip through everything else that’s available.

So now you’re taking expensive, limited retail space and making it much more productive relative to the breadth of product line. It’s the integration of multichannel retail onto the selling floor.”

Suddenly the mobile device becomes a conduit, a portal, linking the physical space of the brick-and-mortar sales floor to an enormously more vast virtual space.

The customer could have visited that particular corner of virtual space from her home computer, of course, just as she could have visited billions of other corners. But now the salesperson can pick up that one corner most relevant to both the customer and the retailer, and place it right into the customer’s hands.

Loss Issues

There is, of course, a broad spectrum of challenges to face with the adoption of mobile POS systems. From a loss prevention perspective, the most apparent initial challenge is the physical security of the mobile devices themselves. These are highly desirable, consumer-grade electronics that require a dedicated system to track and secure.

“It’s much different from conventional fixed POS units, which are screwed into the floor,” says Dabbiere. “These are roaming around, so you have loss issues around the device itself. Most people don’t have much use for a cash register at home, whereas if someone was to steal a smart phone or a tablet and wipe it, they might want to have it to do other things in their house. So now the POS device itself is a target for theft.”

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THE BRAVE NEW WORLD OF RETAIL

“What we realized, after a few conversations with some experts and visiting some stores and taking a look, is that mobile POS breaks down the traditional transaction sequence—and some of this might seem pretty obvious—but when you really think about it, it’s really staggering. Retailers have a clearly defined set of processes they’ve accrued over the years, things ingrained into the public mind. And with mobile point of sale you lose a lot of that.”

John Aloysius, Associate Professor, Information Systems Department, University of Arkansas And aside from the value of the device, unauthorized use, whether malicious or not, could expose sensitive information or provide an avenue into a retailer’s network.

“Clearly when you’re handing these devices to employees,” continues Dabbiere, “and they have passcodes to get into even just the application layers, you always have to fear that one of them is going to end up doing something

malicious. You just need to make that assumption, so that you’re ready if it happens.”

Securing mobile devices from the IT end is also very important, of course. A large deployment might involve thousands or even tens of thousands of individual devices, each of which needs to be configured, managed, and continued on page 22

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THE BRAVE NEW WORLD OF RETAIL continued from page 20

supported. A point-of-sale cash register is a single-use device. It’s configured once and then upgraded relatively infrequently, because it’s designed to perform a single set of tasks. But the mobile device, as a retail Swiss Army knife, has multiple applications and capabilities. It will inevitably have to be upgraded much more often, as any smartphone user knows. For something as mission-critical as money transaction handling, each application—and each update—will need to be thoroughly tested to ensure there are no security holes.

Cash Money

Another striking departure from a conventional point of sale involves how cash is handled. Cash-handling issues cause headaches today just as they did in 1879, when James Ritty patented the first cash register—“Ritty’s Incorruptible Cashier”—to keep his employees from pocketing the proceeds of his saloon’s whiskey sales. But the percentage of U.S. point-of-sale purchases made with cash has certainly plummeted since then, down to roughly 25 percent, according to market research group Javelin Strategy & Research. Of course, consumer cash usage patterns will vary significantly among retailers, but the

vast majority will need to maintain options for cash-using customers into the foreseeable future.

Almost every retailer deploying mobile POS systems plans to retain one or more conventional, fixed points of sale as an option for customers who prefer them. Cash customers could continue to use these, but it would be preferable to devise a way for mobile POS stations to more easily accommodate cash. Yet a sales associate with a mobile POS device might roam throughout the store and probably won’t be expected to carry a cash drawer or a lockbox along. Several vendors are developing technologies to solve this problem with solutions ranging from a mobile-friendly cash drawer to an express pay kiosk, but this is still very much an open issue and each retailer will need to address it one way or another based on their unique situation.

What Is To Come

If swiping your card on a phone, ignoring the cash register, and walking out of the store with your merchandise seems a little odd at first, examining the situation more closely may just make it seem even stranger.

“What we realized, after a few conversations with some experts and visiting some stores and taking a look,” says continued on page 24

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John Aloysius, associate professor in the Information Systems Department at the University of Arkansas, “is that this breaks down the traditional transaction sequence— and some of this might seem pretty obvious—but when you really think about it, it’s really staggering. Retailers have a clearly defined set of processes they’ve accrued over the years, things ingrained into the public mind. And with mobile point of sale you lose a lot of that.”

A transaction at a conventional point of sale is composed of a number of sub-processes, such as scanning, receipting, and validation, which are all elementary particles of a transaction, yet have complex implications for store operations. Mobile POS systems take these elementary processes, and the deeply ingrained cultural norms of how they are supposed to proceed, and shuffle them around.

This generates a number of interesting and unique loss prevention challenges, which will be the subject of Part 2 of this series, along with a closer look at the other members of the mobile POS family tree. The self-scanning, self-checkout process being trialed by grocery retailers is just one other way the mobile device can be pressed into the services of retail. A few retailers are also testing the “mobile wallet” concept—adding the customer’s smartphone to the equation, the transaction then happening phone-to-phone. There are visions, too, of the fabled transaction infrastructure wherein a customer makes her product selections and then simply walks out of the store with them, her mobile device mediating the transaction for her, while the store plays the role of a remote personal storeroom as opposed to a retailer.

In the lands of retail, in a vast kingdom ruled by plastic cards, there is disquiet—the stirrings of a revolution. In dark meeting rooms, shadowy figures speak. “The age of the credit/debit card shall fade,” they say, their hushed voices turning scornful as they mutter, “Can’t even tweet from one of those.” They watch their champion, these past years a constant companion of the plastic cards during ancient rituals, such as the triple-pocket-slap-keysphone-wallet-check. It won’t be a violent revolution, they expect, but rather a gradual fading, much as with the cards’ disgraced predecessors, the personal checks.

They watch their champion gain power and ability; watch the masses of humanity clamoring for a link.

They watch…and they wait.

www.kenwoodusa.com/protalkinfo CHRIS TRLICA is a business and technology analyst based in North Carolina. He is a contributing writer to LP Magazine focusing on emerging technologies. Trlica can be reached at chris.trlica@gmail.com.

24

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by Read Hayes, Ph.D., CPP Dr. Hayes is director of the Loss Prevention Research Council and coordinator of the Loss Prevention Research Team at the University of Florida. He can be reached at 321-303-6193 or via email at rhayes@lpresearch.org. © 2013 Loss Prevention Research Council

From Technicians to Behaviorists

W

here is the loss prevention industry today, where do we need to go, and how should we get there? These are some of the questions the sixteen Loss Prevention Research Council (LPRC) board of advisor members (see box page 28) are asking as they and others plot future research directions. As part of this review and planning process, Bill Titus, vice president of loss prevention for Sears Holdings and chair of the board, asked the group what impact LPRC has had on the LP industry.

Focusing on Human Behavior

The team believes the research teams have worked hard to help move LP to think more in terms of being human behavioral experts rather than technical ones. For many years so much of LP has been about technical specs like which EAS systems work best with metal or wide exits, or how to make CCTV cameras and domes smaller.

Now we’re trying to reorient LP professionals to thinking much more about how we can best keep employees and visitors from committing costly crimes and errors. How do people notice, interpret,

The team believes the research

teams have worked hard to help move LP to think more in terms of being human behavioral experts rather than technical ones. For many years so much of LP has been about technical specs like which EAS systems work best with metal or wide exits, or how to make CCTV cameras and domes smaller.

Now we’re trying to reorient LP professionals to thinking much more about how we can best keep employees and visitors from committing costly crimes and errors.

26

and respond to processes and variously deployed technologies? We first focus on LP treatment impact and return on investment (ROI).

After we sort that out, we focus on technical specs to boost treatment performance and durability.

Probably our next biggest contribution is to work on helping move the LP career field to a much more evidence-based practice model where LP practitioners use a SARA-type (scan, analyze, respond, assess) problem-solving processes to more accurately diagnose problems and their causes, followed by precision treatments that have been rigorously evaluated.

The real news here is we have a ways to go on these efforts, but the exciting news is how many LP practitioners are working together to make this all happen.

Creating an LP Innovation Center of Gravity

As of this writing, the LPRC’s StoreLab program has established innovation store locations for over twenty major retail chains in Gainesville, Florida, to allow for intensive and extensive research and development in close proximity to the LPRC and University of Florida (UF) research teams.

StoreLab retailers, including Walmart, Big Lots, Lowe’s, AutoZone, CVS, Barnes & Noble, Sears, T-Mobile, OfficeMax, Best Buy, Kay Jewelers, Publix Super Markets, Walgreens, Pep Boys, The Home Depot, jcpenney, Kmart, Fergusson, Justice, Tractor Supply, and T.J.Maxx, are using these locations to trial new solutions as well as enhance existing ones.

Dress barn, DICK’S Sporting Goods, Rite Aid, REI, Bloomindale’s, Nike, Maurice’s, and Kroger all have “lab” stores within ninety minutes of campus.

This dense, growing cluster of retailers of all types in one area means that visiting retail executives and solution providers can work with scientists while viewing multiple solution sets and ongoing innovations in one trip. The teams also use LPRC or UF facilities to meet and brainstorm future actions.

Protecting the Future Retail Enterprise

So much of an LP executive’s time is spent on dealing with past or current issues and problems. There is some strategy and planning, but most of us are forced to live in the here and now. And at the LPRC, thirteen of our fourteen working groups and action teams are working near-term.

But the LPRC’s new “Future of LP” working group’s members are learning to act as futurists. They’re working to systematically propose

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continued on page 28 |

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continued from page 26

what future consumers will want to buy, and how they’ll probably be buying and paying for it. That process leads us to think about what retailers will sell, and how they’ll buy, handle, and sell it—which brings us to how we’ll need to protect the future retail enterprise.

Future of LP working group members are inviting new retailers, solution partners, product manufacturers, and futurists from a variety of corporations and consultancies to join them as they work through future challenges, and innovate and adjust solution processes and packages. Leaders from Neiman Marcus, Sears Holdings, eBay, Walmart, and others are preparing to deploy cutting-edge technologies in multiple Gainesville StoreLab locations

2013 Impact Conference and Workshop

The LPRC board is looking forward to hosting this year’s Impact participants on the University of Florida’s beautiful Gainesville campus October 14 – 16. Last year over 130 executives reviewed new LP research and implications, designed new research priorities, and broke into working groups to dig into common problems while specifying future actions.

This year should prove even bigger, with more interaction and more research results. All fourteen LPRC working groups and action teams will be presenting recent research findings, and interacting together and with other groups to develop and test store, parking lot, and supply-chain issues.

A few of the current topics and research findings to be discussed include the following: Future omni-channel and payment-protection needs, Packaging innovations,

Employee awareness program enhancements, ePVM enhancement testing, Employee deviance research, Parking lot crime patterns, Robbery patterns, Store shrinkage predictive models, ORC developments, New offender interview projects, and Supply-chain research.

Participants will be breaking into four immersion areas and working in the StoreLab mockup. Networking events include the annual campus reception, the barbeque and live music event, and focused discussion breaks.

We invite every retailer to send a representative to the conference.

Please contact us at operations@lpresearch.org for more information about participating in this year’s Impact conference.

LPRC Board of Advisors Bill Titus, Sears Holdings (chair) Brian Bazer, Dress Barn Bobby Bull, Cam Connections Charles Delgado, Meijer Tim Fisher, Best Buy Chris Gillen, CPP, Toys“R”Us Jeff Kellogg, MeadWestvaco Steve Longo, CAP Index Jeff Martin, Kroger

Carol Martinson, SUPERVALU Chad McIntosh, Bloomingdale’s Danny Sorrells, Walmart Kevin Valentine, Sterling Jewelry John Voytilla, OfficeMax Dennis Wamsley, Publix Super Markets Lance Williams, Big Lots

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INTERVIEW

WHERE ARE THEY

NOW?

By James Lee, LPC, Executive Editor

WHERE ARE THEY NOW?

I

t has not always been common to see an experienced loss prevention executive leave LP behind to move into a new role elsewhere in the retail pyramid. Certainly, LP executives are increasingly picking up new responsibilities to add to the LP plate. But most do not let go of the loss prevention hat they’ve worn for, sometimes, decades.

Of course, there have always been exceptions to that observation, but more and more LP professionals today are choosing to widen their areas of experience by taking roles in operations, supply chain, even sales management. They make these moves for a variety of reasons, both personal and professional.

We decided to speak to several former LP executives who have assumed new roles in the past few years to understand the motivations, successes, and challenges of their decision. Hopefully, their insights will help others contemplating such a move or, perhaps, stimulate someone to consider a move they would have never thought about before.

Kevin Ach

break from LP in the middle of their careers to gain new experiences prior to rejoining the LP industry, so I felt it was a beneficial risk for me to take as well.

Senior Director, Pricing Compliance and Operations Office Depot Kevin Ach has been the senior director of pricing compliance and operations in the Business Solutions Division (B2B) of Office Depot for the past eighteen months. Previously, Kevin Ach he was senior director of loss prevention and compliance for Office Depot’s International Division, where the office-supply retailer does business in more than sixty countries across the globe. Ach has over fifteen years of experience in B2B operations, LP, safety, and internal audit, the last eleven years with Office Depot. Ach received his bachelor of science degree in systems engineering from the United States Military Academy at West Point, where he played on the varsity golf team all four years. He also spent nearly four years in the U.S. Army as a Signal Corps officer.

EDITOR: Briefly describe the role and responsibilities for your current position.

ACH: I lead multiple teams in our B2B Sales Operations Division to include customer onboarding and maintenance, pricing compliance, reporting, and process improvement in support of our field sales reps.

EDITOR: Given your long experience in LP, why did you make this move?

ACH: I feel I’m a lifelong learner and had zero experience in business-to-business prior to this opportunity, so I accepted the move out of LP to both help my company and gain some fun experience in the B2B world.

EDITOR: Did you have any misgivings or concerns about moving out of LP? ACH: Absolutely. I had several conversations with many of my mentors in the LP industry to contemplate this opportunity and found out many of them took a bit of a

30

EDITOR: What different skill sets, if any, did you have to develop to meet the requirements for your new position?

ACH: For me, it’s always been about leading people, driving key metrics, and maintaining relationships. The people and key metrics may change, but the processes and focus to achieve the best possible results remain the same. I have never changed my focus on driving results.

It’s just a matter of learning those key performance indicators that drive the business and then working hard to surpass expectations.

EDITOR: What advice…or maybe warnings…would you give to LP professionals looking to broaden their experience outside of LP? ACH: My advice is to not be afraid to take a risk in your career as long as you continue to build on your experience.

At the same time, always stay close to people in the LP Industry to be prepared for an opportunity to return when the time is right.

Ken Amos, LPC Divisional Vice President, Operations, Supply-Chain Initiatives Walgreens

Ken Amos started with Walgreens, working in the stores as a stock clerk and became a store manager and then district manager across several Ken Amos markets. He eventually moved into a corporate strategy role at Walgreens’ corporate headquarters. Amos became the director of loss prevention in 2002 and was promoted to vice president of LP in 2008. He assumed his current role earlier this

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WHERE ARE THEY NOW?

year. During his time as a loss prevention executive, Amos served on the editorial board of LP Magazine as well as the board of directors for the Loss Prevention Foundation. He earned his LPC certification in 2012.

EDITOR: Describe the role and responsibilities for your new position.

AMOS: In my new role I serve as the primary liaison and project coordinator for the synergy between supply chain and store operations.

EDITOR: Did you seek out this opportunity or did the company seek you out?

AMOS: With this job, as with every job I have had with Walgreens, I was approached by my manager and asked if I would be interested in a new position. Walgreens is very committed to cross-functional experience and is looking for people who are willing to take on new responsibilities at a moment’s notice as the company constantly evolves its strategy. Historically when I was asked to take a new job, they wanted me to start in 48 hours! I joked this spring at a meeting that my offers usually came on Monday with a Wednesday start date. My new job was different—they asked me on Wednesday and wanted me to start immediately!

EDITOR: What value do you see in this opportunity to both your personal career as well as the corporation?

AMOS: Personally, this gives me a deeper insight into the Walgreens supply chain at a time when we are in a transitional phase into a global company. For the company I can provide a deep background in store operations and loss prevention. As Walgreens has changed, we have hired experts in supply chain from other companies to supplement internal expertise, and my background can help give context to our new programs.

EDITOR: What are the pros and cons in exploring new opportunities within the same organization versus changing companies to get this experience?

AMOS: The pros are the ability to leverage past relationships in new ways that allow me to connect the dots faster than someone new to the company. The only con is just the time and effort to learn a new discipline while doing the job from day one. But that isn’t even really a negative; it’s just part of any new job.

EDITOR: Looking back at your experience leading the LP effort, what are some of the grand memories that come to mind?

AMOS: I was fortunate to lead LP at Walgreens at a time when our CEO and chairman were very supportive of change.

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31

WHERE ARE THEY NOW?

They understood the value of technology and analytics and were willing to invest in infrastructure as well as manpower.

The LP organization eleven years ago was very talented in the field, but the support in corporate was very limited.

Over the years we developed a sophisticated internal POS exception-reporting tool, a state-of-the-art digital CCTV system in all stores, an industry-leading UL-approved security command center, and, most recently, a new tool to develop cases and investigations with strong analytic capabilities.

EDITOR: You will be missed on the board of the Loss Prevention Foundation. What did that experience mean to you?

AMOS: I was also fortunate to come into loss prevention when LP Magazine was hitting its stride, and the first fruitful discussions were taking place about the need for professional certification for the LP industry. The Foundation has done so much in just a short amount of time to put structure around the LP profession. In particular I have enjoyed working with Gene Smith and others on the “Advancing the Professional” meetings across the country. I strongly believe that LP has the talent in the field, but we could all use more formal training, education, and networking beyond the big LP conferences.

Jim Carr, CFI

Director of International Loss Prevention Rent-A-Center Jim Carr moved into the role of director of international loss prevention two years ago when Rent-A-Center began its rapid expansion into Mexico. He joined Rent-A-Center in 2010 as director Jim Carr of LP after twelve years in various LP management positions with Pep Boys. His twenty years’ of experience includes time at Jamesway and Marshalls. Carr holds a bachelor’s degree in law and justice from Rowan University and is a Certified Fraud Interviewer. He is also a member of the LP Magazine editorial board, CFI recertification committee, ASIS International CSO roundtable, and the LP Foundation requirements, content review, and certification committees.

EDITOR: Briefly describe the responsibilities for your current position.

CARR: First, is the continuous development of the international LP strategy. We share the same responsibilities as domestic loss prevention, which includes people, profit improvement, training, data analysis, physical security, and investigations. Internationally speaking we also focus on foreign travel safety, protective intelligence, critical incident response, security assessments, and executive protection.

32

EDITOR: Although you have not left LP per se, you are now in a “foreign” job so to speak. What professional, personal, and cultural adjustments have you had to make?

CARR: Professionally, I needed to educate myself on the difference between domestic and international loss prevention, gain a better understanding of the workforce and customers, as well as its impact to our business.

Personally, I needed buy in from my family because of the increased travel, time to learn a new language, and working in some higher risk areas. Culturally, relationships are very important, and we move at a slower pace when conducting business in Latin America. Discussing family, current events, and sports prior to talking business is expected. Being 10 to 30 minutes late for a business meeting can require patience and ordering a glass of wine during a lunch meeting is somewhat customary. Obviously, there is much more.

EDITOR: How did you learn what was necessary to succeed on the international front?

CARR: I reached out to several industry peers who work for multinational companies based in the U.S. They were nice enough to connect me with an international counterpart to provide benchmarking information and best practices. I knew I wasn’t the only person who may have to mitigate issues of extortion, civil protest, or C-suite safety. I quickly realized I needed to reinvent my professional network to include these folks. I found many of them at the Overseas Security Advisory Council (OSAC), which is a group of global security and risk professionals who have prior military or federal government experience. OSAC is run by the Department of State and is focused on supporting American businesses outside the U.S. borders. We participate in both regional and local country council meetings. It’s a great venue to learn though training, presentations, and bench-marking surveys. But, most importantly, you have to surround yourself with great people who complement each other.

EDITOR: Was language a barrier and, if so, how did you overcome it?

CARR: Language was a bit of a challenge when we first entered the market. I was able to leverage bilingual resources based in Texas until I hired my first bilingual Mexico-based coworker. As we have grown in Mexico, I realized making fluent English a requirement for LP candidates isn’t the right thing to do. So, we—meaning me—needed to do a better job at speaking the native language to be more effective. First, I enrolled in an adult continuing-education class and complemented it with an online course. This year our company partnered with a local college and sourced a professor who facilitates a Spanish class in our Field Support Center. A dozen of my international colleagues from various departments and I have spent an hour-and-a-half every Monday and Friday together growing our Spanish

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WHERE ARE THEY NOW?

skills. We just started our third Spanish course focused on business conversation.

EDITOR: Did you seek out this opportunity or did the company seek you out?

CARR: I was working as a director supporting 1,500 locations in the western half of the U.S. As our company began its expansion into Mexico along the Texas border, I became curious as to what LP looked like in Mexico and volunteered for the additional responsibility. When the company committed to international expansion as a top-two growth vehicle, I was asked to move into an international role full time.

EDITOR: What value do you see in this opportunity to both your personal career as well as the corporation?

CARR: As Stephen Covey says, this was a win-win opportunity. The company got an LP professional whom they know, with established relationships inside the organization, and someone with experience working with the domestic model. For me personally, I viewed this as a startup, an opportunity to design an international division based in our global headquarters that supports each country as we move forward. The international arena has also shown me the value of foreign travel safety, protective intelligence, and critical-incident response programs. Understanding what

resources are needed to effectively handle situations, such as extortion, cargo theft, or a hostage event outside the U.S. is huge. This opportunity has added knowledge and skills I most likely wouldn’t have achieved otherwise. Going to work for the past three years has felt like an international LP certification program. What a great idea.

Bill Turner, LPC

Vice President, Customer Relations Universal Surveillance Systems Bill Turner recently joined Universal Surveillance Systems as vice president of customer relations after a long career in retail, most recently as senior director of retail operations for Bill Turner Cole Haan. Prior to that he was a loss prevention and operations executive for Nike Retail where he created the global LP and risk function.

Turner spent a number of years with Walt Disney World in Orlando where at various times he was responsible for continued on page 34

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security, transportation, distribution, horticulture, laundry operations, health services, and risk management. He began his career as a part-time LP associate at Bullock’s Department Store where he eventually became VP of operations. Turner is a member of the Loss Prevention Foundation board where he serves as treasurer and a former member of the LP Magazine editorial board.

EDITOR: Briefly describe your new role.

TURNER: My job is to interact with all of our existing customers to be sure USS is providing superior service and living up to its reputation of great innovation, communication, and response. I also serve as an ambassador to prospective customers.

EDITOR: After a long, celebrated career in a variety of corporate retail executive positions, why the switch to the vendor side?

TURNER: Pretty simple. After Cole Haan was sold, I had an opportunity to return to Nike in Oregon. But, my permanent home is in Florida, and my wife and I have basically lived apart for the past seven years. It was time to go home. The position with USS allows me to remain 100 percent active in the business, work from Orlando, and enjoy what I do.

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EDITOR: How are the work challenges different from corporate retail to corporate supplier?

TURNER: Obviously, my basic job is very different. I went from running organizations and large groups of people to running myself. It’s still a relationship-centric job, but in a different way. The good news is that I am very familiar with the LP challenges retailers face and can relate to our customer’s needs and issues. The biggest adjustment is working out of a home office without a lot of people around. However, I am plenty busy and travel a lot. I actually interface with more people from the retail industry than I did before, which I like.

EDITOR: How have your former retail peers accepted your move…or perhaps not?

TURNER: I know a lot of people and have a lot of great relationships based on being part of the business for so long. It’s interesting, though, when you are reaching out on the vendor side, some people are slower getting back to you because now they assume you’re trying to sell them something. Plus, what I want to discuss with them is not necessarily their top priority at the moment. I fully understand that. I am used to things happening faster than they do on this side, but I am learning patience. The key is to be tenacious, but not be a pain. Relationships and communication are still keys to success. continued on page 36

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WHERE ARE THEY NOW?

with those they respect, who are knowledgeable, and who provide the solutions they need. They also want vendors who are easy to do business with. I am not a professional salesman by nature, but am trying to learn basic techniques that can help in the effort to grow the business. That is important on this side of the table. But relationships and practical solutions still come first.

continued from page 34

EDITOR: What things do you miss, if any, from working on the retail side?

TURNER: As I mentioned, I miss the constant exposure to people. I also miss the leadership component of running a large team. But, the challenges on the vendor side are as big, just different. I am still learning that. Basically, I am still in the business and still trying to solve its issues, just a bit narrower in scope.

EDITOR: What things have you found rewarding in your new position?

TURNER: Being more exposed to other retailers and their issues on a day-to-day basis is fun and rewarding. I interact with a variety of LP and operations teams much more than I did in the past. I have been in the business a long time, but it is amazing how much you learn when you work with other retailers to help solve their issues.

EDITOR: What advice…or possible warnings…would you have for an LP professional considering making a similar move?

TURNER: Really think about what you love to do. And it depends on the components of the different jobs. People say the potential to make more money in sales on the vendor side is real. Maybe it is, but, if you don’t love what you do, it’s not worth it. And, obviously, not all vendor jobs are sales based. So, be sure you know the basic make up of any job you are considering and be sure that fits with what you like and are excited about.

EDITOR: What skills do you see that carry over from LP to vendor, and what skills do you see needing improvement to succeed in the vendor world?

TURNER: I think the skills of communications, relationship building, follow through, and technical knowledge are keys on both sides of the business. People want to do business

EDITOR’S NOTE: We intend to add interviews with other former LP executives who have assumed new roles in retail. Check our website, LPportal.com, for additional articles. If you or someone you know would want to add their insights into this series, please contact us at editor@LPportal.com.

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CERTIFICATION

Members Only!

The Value of Membership in a Professional Association

I

n 1981 a brand called Members Only was introduced to the U.S. market by Europe Craft Imports in the form of jackets known for their epaulettes, elastic sleeves, and their signature Members Only branding under the chest pocket. Their advertising told us, “When you put it on, something happens to you.” Retailers reaped the rewards of this new hot item.

The popularity and even what some might call a cult-like success of the product focused on the idea that everyone wants to belong. Belong to what? Something!

Every one of us has a membership in some group. We have memberships in families, churches, sports teams, fan clubs, and on and on. More recently we have joined online membership venues, such as Twitter, MySpace, and Facebook.

Psychologically, we all have a need to belong, and we all can benefit from belonging to the right groups. But, with so many groups that we are already in and with so many groups out there that would love to have you as a member, how do you choose?

Start by identifying value that you want to derive from a group or association and then find the group that meets your needs. There are as many reasons to join some groups as there are members. Some groups want to help you save money. Some offer exclusivity. Some help you to be with people of like attitudes. Some profess to be groups that do good. Some offer “members only” benefits.

If you Google “value of professional memberships” you will find over 5,400 separate results. Based on this, clearly there are people looking for associations, associations looking for members, and “experts” extolling the virtues of becoming a joiner. If you are a retail loss prevention professional interested in constant improvement of yourself and your peer professionals in the industry, read on.

As a loss prevention professional, supplier, student, or academic, your goal should be to join a group whose goal is to elevate the loss prevention/asset protection profession and give our profession the career recognition and professionalism that we know it deserves. One organization I strongly recommend for LP professionals is the Loss

38

by Jeff Levitt, LPC, CPP Levitt is a charter member of the Loss Prevention Foundation and is currently on the LPF board of directors as a representative of the restaurant LP and security industry.

He has been senior manager of asset protection for Panera Bread for eight years after holding LP leadership positions at Toys“R”Us and Target. Levitt can be reached at 314-984-2672 or via email at jeff.levitt@panerabread.com.

Prevention Foundation (LPF). It is the one international association that focuses its mission and passion to advance the retail loss prevention and asset protection profession by providing relevant, convenient, and challenging educational resources.

Comments from LP Professionals

Following are some additional comments from industry executives about membership in the Foundation.

“I highly recommend that loss prevention professionals belong to professional associations like the LPF. It is also another item to add to your professional credentials and is a great way to support professionalizing our industry. LPF is a not-for-profit organization created by LP professionals for LP professionals. Most professions have their own industry specific organization, and it was time we created our own.” Chris O’Leary, President, Loss Prevention Recruiters “Belonging to a professional organization is a great way to give back to the LP industry. I see it as supporting the efforts to elevate the industry to be a true profession.

Associating with the Loss Prevention Foundation was a very personal decision, and I’m proud of my affiliation.

The LPF is a no gimmicks, no games organization that is all about development of the individual. What could ever be wrong with that?” Dan Provost, LPC, Vice President Global LP, Staples “Being a member of professional associations like the Loss Prevention Foundation, ASIS International, and the Association of Certified Fraud Examiners has been very rewarding in the number of high quality people I’ve met and opportunities I’ve had that I wouldn’t have otherwise connected with. All of those associations offer certifications that support and validate an individual’s willingness to learn, achieve, and educate themselves. I appreciate the experiences and hope I can contribute to each association as much in return.” Alan Greggo, CPP, CFE, Principal, Profit RX

Benefits of LPF Membership

Becoming a supporting member of the LPF connects you with industry leaders and those who share your

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desire to elevate the professional status of loss prevention practitioners. Your commitment will also serve as a tangible reminder to prospective employers that you understand a strategic, long-term vision of the LP profession. Adding it to your resume sends a clear message that you are a professional and are not singularly focused on investigations and interviewing.

LPF works to eliminate the confining “security-shoplifterapprehension” stereotype as well as to advance the profession into core business processes profiting both the business and the LP professional.

In addition to its aim of recruiting current loss prevention professionals into its ranks, LPF focuses on driving more talent to the industry from colleges, universities, military, and law enforcement through its Academic Retail Partnership program and its Hire-A-Vet program.

Tangible benefits of membership in the LPF include: Savings of $75 on full-course payment for the LPQ and/or LPC coursework.

Savings of $125 on recertification fee with consecutive three-year membership.

Savings of 33 percent on LPF educational events as well as priority registration.

Networking opportunities with other professionals who are committed to promoting LP as much more than investigations and apprehensions.

Subscription to the monthly membership newsletter.

Law Enforcement Ride & Run to Remember

Priority consideration on serving on LPF committees.

Listing your membership status in your credentials.

Access to online resources for education, careers, store, and personal assessment.

There are many professional associations that cater to the security industry. Some focus on a specific skill, such as interviewing. The experienced loss prevention professional—or aspiring professional—has choices. I believe that the Loss Prevention Foundation, with its minimal membership fee, has much to offer and deserves consideration.

They even have an LPF store where you can get branded apparel. “When you put it on, something happens to you.”

Newly Certified

Following are individuals who recently earned their LPC and LPQ certifications.

Recent LPC Recipients

Timothy Berry, LPC Joseph Bleyer, LPC, CFI, Assoc. Dir. of AP, Ralph Lauren Benjamin Burrows, LPC, Reg. LP Mgr, Goodwill Industries of Central Indiana Patrick Christen, LPC, VP Compliance & LP, Flexi Compras Christopher Coleman, LPC, LP Investigator, Marshalls James Daniel, LPC, CFI, Reg. LP Mgr, Stage Stores Todd Didion, LPC, Dist. LP Mgr, Walgreens Glenn Forrest III, LPC, Field LP Mgr, Staples Jimmy Gonzales, LPC, LP Mgr, Stage Stores Bilie Jo Gwyn, LPC, Dist. LP Mgr, Walgreens Eric Hebert, LPC, LP Supervisor, T.J.Maxx Stacy Johnston, LPC, LP Mgr, Lowe’s Lisa Kelleher, LPC, Services Area AP Mgr, Best Buy Michael Mirand, LPC, Dist. LP Mgr, Walgreens Matthew Nagler, LPC, Ops Supervisor, Hayneedle Sanford Siegel, LPC, Mgr of LP, TGI Fridays Jeremy Sutherburg, LPC, Dist. LP Mgr, Walgreens Alan Thorne, LPC, LP Mgr, Walgreens Jonn Trinka, LPC, Sr. Fraud Res. Coord., REI Elliott Webb, LPC, Dist. LP Mgr, Walgreens Samuel Wilkerson, LPC, Dist. LP Mgr, Walgreens

Recent LPQ Recipients

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Debbi Abood, LPQ, Mgr e-Commerce Fraud, Bed Bath & Beyond Troy Cilio, LPQ, LP Specialist, Publix Super Markets Michael Crowley, LPQ, Fraud Analyst Level II, Redbox Automated Retail Andrea Galvis, LPQ, LP Auditor, Publix Super Markets Camyle Haywood, LPQ, LP Specialist, Publix Super Markets Phillip Huneycutt, LPQ, Stocker, Food Lion Luis Lozoya, LPQ, LP Agent, Goodwill Industries International Rediar Mallard, LPQ, LP, Genesco Serafin Martinez, LPQ, Student, Texas State University, San Marcos Joseph Mastrangelo, LPQ Mike Mesa, LPQ, LP Investigator, TJX Companies Clint Middlebrooks, LPQ, LP Agent, Lowe’s Scott Morris, LPQ, Div. LP Mgr, Heartland Automotive Services Michael Pierpaoli, LPQ, Investigator, Macy’s Logistics and Operations John Rainey, LPQ, Sr. LP Investigator, Academy Sports plus Outdoors Randy Snyder, LPQ, LP Dir., Big 5 Sporting Goods Julio Suarez, LPQ, LP, HomeGoods William Whitaker, LPQ, U.S. Marines

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PROFILE

h.h. gregg

AN UPPER-END ELECTRONICS RETAILER WITH A LOWERCASE NAME

By Adam Paul, Contributing Writer

h.h. gregg

O

Perhaps it’s the trusting nature of new business owners, or a corporate team that wants to believe in the goodness of the average person. Perhaps it’s the desire to retain employees by implicitly trusting them or pretending that they are incapable of stealing from their employers. Either way, h.h. gregg’s initial foray into serious loss prevention efforts was spurred by a crisis.

Decades after their inception, the ownership decided that enough was enough.

perating 228 stores in virtually all states east of the Mississippi, h.h. gregg is a major retailer of electronics, appliances, home entertainment systems, and much more.

If you’re wondering about the origin of the name, h.h. gregg originally started in Indianapolis, Indiana, as H. H. Gregg Appliances, a far more traditional sounding name bestowed upon the company by (no surprise) founder Henry Harold Gregg in 1955. Initially, the company started with a big name and mostly uppercase letters, yet only had one diminutive 800-square-foot store. Today all uppercase letters are gone from the name, yet the stores are bigger and more plentiful than Gregg himself could ever have imagined.

With two-hundred-plus stores, five massive distribution centers, and plans to expand aggressively even further, h.h. gregg is the retailer with the little name that carries a big stick.

At first blush, h.h. gregg’s product offering feels like a smaller version of their competitor, Best Buy. But upon closer inspection, there are significant differences. First, h.h. gregg is more appliance-heavy than your average Best Buy. While their consumer-electronics offerings are similar, h.h. gregg ventures into territory not offered by their competitors, such as eclectic items like mattresses and fitness equipment.

Additionally, h.h. gregg attempts to separate itself from others by having commission-based sales people who they push

to be more customer-service-oriented and more numerous per capita than in comparable stores. It’s a formula that seems to work for the 58-year-old retailer that shows no signs of slowing down.

Loss prevention efforts at h.h. gregg are headed by Todd Zimmerman, an accomplished LP professional who cut his teeth at retailers like Macy’s before joining h.h. gregg in 2004, when they had only fifty-five stores. Today, h.h. gregg is a $2.5-billion powerhouse public company. While its growth has been nothing short of phenomenal—they’ve been adding on average fifteen to twenty new stores per year—the groundwork for effective asset protection needed to be laid, which is just what Zimmerman did.

Stop the Hemorrhaging

Few companies start with a loss prevention plan from the get go, and even fewer start with anything resembling a loss prevention team. h.h. gregg was no exception. Perhaps it’s the trusting nature of new business owners, or a corporate team that wants to believe in the goodness of the average person.

Perhaps it’s the desire to retain employees by implicitly trusting

42

them or pretending that they are incapable of stealing from their employers. Either way, h.h. gregg’s initial foray into serious loss prevention efforts was spurred by a crisis. Decades after their inception, the ownership decided that enough was enough.

“Atlanta was a challenge,” starts Zimmerman, speaking of the massive distribution center h.h. gregg operates in that city.

Years ago, and having just expanded into the area, h.h. gregg set up a 200,000-square-foot distribution center, which was quickly exploited by unscrupulous staff and contractors. “We had entire semitrailers filled with electronics that went missing,” says Zimmerman. “They literally drove them away. We actually had managers who cleaned out our stores.” Apparently, simply building a distribution center wasn’t good enough. Zimmerman needed to put it on lockdown, and to do that, he first focused on physical security.

In loss prevention it’s easy to get wrapped around the axle on touchy feely outreach programs, or morale-building training sessions. Getting buy-in from employees and team building is definitely important, but sometimes a good old-fashioned dose of physical security is what’s needed to stop the bleeding. That’s the tack that Zimmerman took on the distribution centers.

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h.h. gregg “We put fences all around the center and installed biometric readers on the gates. This way only a few people could open the gates to let the trucks out,” explains Zimmerman. “Next, we redid the alarm systems so that the emergency exits would just screech.” Realizing that a significant percentage of thefts were coming from employees simply walking product out the emergency exits, Zimmerman placed alarms on the doors that were sufficiently loud enough to be heard over the din of the busy 200,000-square-foot facility.

After the physical security was fixed, Zimmerman introduced a plan to conduct drug screening on distribution center employees. Surmising that a nasty drug habit could motivate an unscrupulous employee to steal in order to feed the addiction, Zimmerman’s drug-testing plan immediately sent a warning shot over the bows of wayward employees.

Zimmerman admits that his first couple of years weren’t focused on the stores as much as they were on the distribution centers. “I spent probably 80 percent of my time working on the distribution centers those first few years,” he states. It’s no secret why—the distribution centers contained millions upon millions of dollars in product at any given time. The fact that they weren’t open to the public initially lulled corporate executives into thinking they’d be safe, until Atlanta’s fledgling center taught them otherwise.

In loss prevention it’s easy to get wrapped around the axle on touchy feely outreach programs, or morale-building training sessions. Getting buy-in from employees and team building is definitely important, but sometimes a good old-fashioned dose of physical security is what’s needed to stop the bleeding. That’s the tack that Zimmerman took on the distribution centers.

Zimmerman is a quick learner, however. “After what we learned from Atlanta, we built the Orlando distribution center from scratch. Within two months of opening, we caught an employee who tried to smuggle a couple of wires out by stuffing them into his shoe. That’s how sophisticated the security is there,” says Zimmerman, beaming with pride. And this pride is well deserved. From initially having entire semitrailers disappear to catching an employee with a few wires in his shoe is certainly significant progress.

Building the LP Team

With the initial losses under control, Zimmerman’s focus shifted to planning for the aggressive expansion that h.h. gregg’s leaders had in mind. Having a solid standard operating procedure for setting up and managing the distribution centers—h.h. gregg now has five major ones—Zimmerman built his field team, which today consists of five territory managers. Still feeling the wounds from Atlanta and the losses therein, Zimmerman wisely housed each territory manager in a distribution center, ensuring that someone always had eyes on the local operation.

Today, h.h. gregg’s asset protection team consists of Zimmerman himself as the national asset protection manager, five territory managers, and thirteen auditors spread out within h.h. gregg’s vast territory. While it’s an admittedly small group,

especially when compared to the magnitude of h.h. gregg’s operations, Zimmerman views the team in a more pragmatic fashion. “We’re overhead. Let’s be real about that,” he states, referring to the fact that while LP operations save a company significant amounts of money, the LP team must first be on the payroll, which ultimately is a corporate expense.

Zimmerman’s philosophy on loss prevention efforts embraces the fact that he and his team are overhead expenses, and he doesn’t try to tiptoe around that realization. In fact, he plans to maintain the status quo. “We’re going to continue to grow at the rate the company grows,” he says. It seems as though h.h. gregg has found the appropriate ratio, that elusive sweet spot metric of loss prevention professionals per store, per territory, and per current rate of growth.

It’s All about Mindset

h.h. gregg isn’t immune to the sorts of shrink problems that plague any other similarly positioned retailers, but Zimmerman isn’t fixated on the concept of preventing theft outright. While store thefts and even organized retail crime (ORC) occur in their stores, Zimmerman’s approach is one of education rather

LP MAGAZINE | SEPTEMBER - OCTOBER 2013

43

h.h. gregg

Zimmerman is cautiously optimistic about h.h. gregg’s current shrink levels, but he realizes there is room for improvement. He is currently branching out into areas outside of traditional loss prevention, yet areas that more and more LP professionals seem to be getting into. “Loss prevention is stable at h.h. gregg,” he explains, “so now we’re focused on finding additional areas where we can help the bottom line.”

than one of lockdown. “We don’t have goals for catching shoplifters,” states Zimmerman unequivocally.

If you get the impression that Zimmerman would rather focus on getting loss prevention buy-in from store employees, you’d be right. “I realized right away that I needed to educate people and get them to care,” he states. “I had to win people over or I was going to lose.” This philosophy makes practical sense—you can’t have a sit down with your local shoplifters or ORC group to explain the error of their ways, but you can sit down with employees and get them to be vigilant and to care, which hopefully produces employees who become somewhat loss prevention hybrids with the topic of loss prevention never far from their minds.

Credit-Card Fraud. One area where Zimmerman’s loss prevention-oriented educational philosophy has shined particularly bright is credit-card fraud. A problem that’s not specific to h.h. gregg, but one that is becoming far more prevalent is the spread of manufactured, fraudulent credit cards. Operated by groups of professional criminals with sophisticated equipment and fueled by countless criminally associated store and restaurant employees, the scheme is a simple one. First, criminal associates obtain employment in high-end stores and restaurants that are likely to be frequented by wealthy individuals. When a customer pays by credit card,

44

the employee discreetly swipes the credit card through a reader, transferring all of the information into memory. Then, the employee swipes the card through the establishment’s point-of-sale system, charging the purchase as would normally happen. The customer leaves, none the wiser, with no odd or unusual credit-card charges…yet. The store employee will return the reader to a criminal group, who will download the data, and create new credit cards—bearing different names, of course, but with the targeted customer’s banking information.

Criminals aren’t stupid. They know that these schemes have a finite shelf life. They may only be used a single time before the fraudulent charges are discovered, but in the meantime, they head to places like h.h. gregg to spend their ill gotten gains. However, Zimmerman’s team is waiting for them. As part of his educational process, Zimmerman and his asset protection team have spent considerable time and resources training store employees on what to look for in a fledgling cloned credit-card thief. “ORC is a big deal in credit-card fraud,” explains Zimmerman, “so we teach our associates what to look for in a person who is trying to use one of these cards.

For example, if they come in and ask no questions about an expensive product, but they immediately want to buy five of

them, that’s a potential problem.” Zimmerman’s philosophy is to educate h.h. gregg’s store associates in recognizing what a real customer looks and acts like, so that when they come across a thief or fraudster, they’ll know the difference.

Product Protection. Of course, h.h. gregg isn’t immune from more mundane loss prevention issues. Not too long ago, h.h. gregg began carrying the eminently popular line of designer stereo headphones called “Beats.” Designed by superstar rapper Dr. Dre, Beats became a national phenomenon for music-loving teens. The product quickly became a runaway hit in stores, even though your average pair of high-end Beats headphones cost north of $400 each. Even entry-level Beats retail at over $150.

When h.h. gregg joined the marketing foray, Zimmerman quickly recognized a significant problem. “We first had them out on peg hooks, and we were getting wiped out,” he says.

“So we partnered with Alpha Security and put one of each SKU in acrylic boxes. We also put up a display so that the customer could see them and touch them. We wanted to show people we were still selling them; that we wanted to sell them.”

Shortly after those measures, shrink on the Beats headphones quickly hit normal numbers, while sales continued upwards.

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Future Directions

Tracking LP Data

Zimmerman also has a refreshingly novel, yet simple, approach to tracking loss prevention data. While most LP managers and auditors spend a significant amount of time poring over exception reports in an attempt to discover thefts, fraud, and shrink, Zimmerman is more focused on the overall profit margin the store is realizing to determine its measure of health.

“We have exception software, but at times the data is too much to deal with,” states Zimmerman pragmatically. “The best thing to look at is margin. We can easily tell whether a store is running right just by looking at margin.”

Zimmerman is cautious about dependence upon exception-reporting software, especially since h.h. gregg’s business model allows customers to haggle over price, which makes the tracking of pricing anomalies harder than it would be in a typical store. “When we pull up a report and see that a product is sold for less than the retail price, the question becomes, ‘is that fraud or is that a store manager giving the customer a deal?’”

Still, Zimmerman is adamant that the store’s profit margin is the key to determining whether the store is experiencing normal shrink levels, or whether his team has to dig a little deeper.

And margin, in Zimmerman’s opinion, is closely related to how educated his employees are about loss prevention. “The biggest thing is being able to bridge the gap between catching crooks and protecting the bottom line,” states Zimmerman.

Zimmerman is cautiously optimistic about h.h. gregg’s current shrink levels, but as with most loss prevention executives, he realizes there is room for improvement. He is currently branching out into areas outside of traditional loss prevention, yet areas that more and more LP professionals seem to be getting into.

“Loss prevention is stable at h.h. gregg,” he explains, “so now we’re focused on finding additional areas where we can help the bottom line.”

To that end Zimmerman is foraying into risk management, which encompasses areas such as employee safety and workers’ compensation issues. Zimmerman realizes that even the loss of a few pairs of Beats pales in comparison to an average workers’ compensation claim. “We are definitely getting involved in the risk management piece,” he states.

As h.h. gregg continues its aggressive rate of expansion, building up square footage and employee numbers by the minute, Zimmerman will rest easy knowing that the sound framework of loss prevention that they have built from the ground up will continue to run smoothly, as the asset protection team focuses on other ways to enhance the bottom line.

ADAM PAUL is a business writer based in Los Angeles, California, and an ongoing contributor to LP Magazine. He can be reached at AdamP@LPportal.com.

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Steven Alan ####

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The employee did not appear to clear out the fitting rooms after customer use.

8/2/2013 1:27:49.054

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Slip and Fall Claim Investigation: The customer appeared to walk towards the exit. As he was walking he appeared to slide on the floor.

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PARTNERING WITH RETAILERS

By Dave DiSilva

Investigating Chargeback Scams Every day, LP analysts mine through terabytes of company information searching for criminal activity. A useful item often overlooked is located in the back of your accounting department in sales audit. The chargeback—a seemingly insignificant loss report—could be the first indicator of much larger issue.

The chargeback is a crime report filed by a credit card holder and in most instances results in a financial loss to your company. The loss is frequently reported to your sales audit team, reviewed, and written off. Let’s look at a situation that if handled by an investigator could result in a different outcome.

Triangle Fraud

Triangle Fraud is a credit theft scheme that criminals use to illegally obtain and sell merchandise to unsuspecting buyers. Here is how it works: 1. Criminal seller lists merchandise for sale on their own website, a classifieds site, or auction site.

2. An unsuspecting buyer purchases the merchandise from the website.

3. The criminal purchases merchandise from a retailer using stolen credit information and has the retailer ship it directly to the unsuspecting buyer.

4. The account holder receives her credit card statement and notices a charge for an Internet sale that she did not make. She contacts her credit card company, fills out fraud papers, and the credit card company notifies your sales audit group.

Dave DiSilva, Senior Executive, Global Asset Protection, eBay

The chargeback is a crime report filed by a credit card holder and in most instances results in a financial loss to your company.

In this case the LP investigator is informed of the incident and should do the following: Obtain a copy of the fraud report and the relevant details.

Research the ship-to address to identify who lives there and find a telephone number.

Call the person at the ship-to address (buyer) to (a) confirm they received your merchandise, (b) inform them the product shipped to their location was reportedly purchased with stolen credit information, and (c) ask them where they purchased the product (Craigslist, Amazon, eBay, or a business website).

Obtain any information, including phone number, email, and website used.

Report it to law enforcement with the details received from the unsuspecting buyer.

Work-at-Home Scam—Customer Service

The work-at-home scam is similar to triangle fraud, but is more complex and lucrative. These organizations are frequently led from outside of the United States. The criminal ringleader hires employees to sell the product

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on classified or auction sites. These employees—often referred to as “mules”—sell the products and may not know it is stolen. Once a sale is completed, the mule forwards the buyer information and the bulk of the money to the criminal ringleader to place the fraudulent order. This scenario shields the criminal leader. Once a mule becomes trusted, they are often allowed to recruit other mules, and establish buying and selling rings.

Work-at-Home Scam—The Reshipper

This scam is often an international fencing operation. Here is how it works. The ringleader places ads for positions with his “company.” The employees are promised large salaries for receiving merchandise at their home, repackaging, and then mailing merchandise to addresses provided by the “employer” ringleader. The reshipper employee is unaware the items in the boxes were purchased using stolen credit cards. The ship-to addresses are frequently out of country and, as with most of these scams, the ringleader is shielded.

Chargeback Checklist

Following are several suggestions for managing chargeback scams: Develop a process to track and research chargebacks in order to identify the product purchased, where it was sent, and if there is a pattern to the loss.

Check with your IT group to see what information is captured and how long it is maintained.

See that chargeback transactions that occur on your e-commerce site, from catalog sells, or sent from a store, include a ship-to address, tracking information, an IP address, mac ID, email address, and shipping carrier.

Shutting Down the Seller

Now that you have located a seller of your stolen merchandise, you will want to work with the site to shut down the seller. Listed below is contact information for sites and law enforcement to assist you.

Amazon. To notify Amazon of concerns regarding suspected stolen merchandise follow the link: amazon.com/gp/help/reports.

You are asked to provide your email. Select the violation of rules report. Provide the name of the seller, the order number, and listing ID. There will be an area to input your comments and concerns.

Craigslist. To notify Craigslist of concerns use the link: craigslist.org/feedback and complete the form, which will be sent to customer service. Be specific regarding your concerns. You may also email directly to abuse@craigslist.org. eBay. To notify eBay’s PROACT team of suspected criminal activity, email PROACT@ebay.com.

U.S. Postal Inspection Service. To contact the U.S. Postal Inspection Service go to: postalinspectors.uspis.gov.

To fill a mail-fraud complaint with them, use this link: ehome.uspis.gov/fcsexternal/default.aspx Internet Crime Complaint Center. The IC3 is a partnership between the FBI and the National White Collar Crime Center.

To file a report, go to: ic3.gov/default.aspx.

SEPTEMBER - OCTOBER 2013

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FEATURE

THE EVILS OF TECHNOLOGY HOW BOTH HARDWARE AND APPLICATION ENHANCEMENTS HAVE CHANGED YOUR WORLD AND MAY DRIVE YOU CRAZY

By Kevin M. Plante, LPC

THE EVILS OF TECHNOLOGY

I

have been a loss prevention practitioner for many years. Many things have changed over those years—fortunately, much for the better. As I consider all the technological advancements made in the LP industry and retail in general, it’s hard not to think about some of the pitfalls of the technology. I’m not talking about necessarily what didn’t work as designed, but what unintentional consequences surfaced as a result.

Each tidbit discussed in the following pages is designed as a foundation for you to review in your own situation. What would you do? Do you know what technology your company uses or doesn’t use? What policies or best practices has your company instituted surrounding how to handle certain situations? You may not find all the answers here, but hopefully this will provide food for thought as you and your organization manage both old and new technologies.

In-Store Technology

Technology in our retail stores has come a long way. Retailers are rapidly adapting new technologies to differentiate themselves from one another, enhance associate productivity, and offer added convenience for our customers, but there are inherent risks and unknowns with each of them. e-Receipts. In the past store associates would issue physical receipts to customers that were critical for certain processes. For example, customers would need to provide those receipts in order to return something that either was broken, the wrong size, or simply wasn’t something the customer needed.

Today, many retailers are issuing virtual, digital, or “e-receipts” that are emailed to a customer. As convenient as that is given customers can save their receipts in a database or in the “cloud,” what happens when your LP or store associate sees someone walk out with merchandise without a physical receipt? If the customer says that they asked for the receipt to be emailed, what do you do? Would you feel comfortable making a stop at your store if you use e-receipts? What if the customer returns an item and claims that they never received their e-receipt? How do you easily research the authenticity of an e-receipt? How do you handle an exchange or return in the world of virtual receipts?

Smart Safes. Another great, next-generation technology is the smart safe. Most retailers use a safe that uses a combination, a key, or sometimes both. There are drop safes for

50

Technology can and should be a positive part of our professional lives as retail loss prevention professionals.

Technology is paramount in order to increase sales, productivity, and profits in our stores.

Convenience to our customers has to be a priority in order to win and retain those customers.

However, what is important to keep in mind is that technology can hurt us if we don’t pay attention.

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deposits with time delays built in now that are all designed to help provide more safety and security to the personnel in the store.

Smart safes are safes that count your cash, secure it in a self-contained vault and transmit dollar amounts to your bank. The bank receives the information and provides provisional credit to your bank account. Your completed deposits could sit in the safe’s “vault” for weeks before an armored car needs to visit your store and take the deposits. Quicker turnaround on banking, less labor in the cash office counting money, and more secure storage of money— how convenient…or is it?

What happens when you have a deposit shortage? Did the machine miscount something?

Did the machine not catch a counterfeit bill?

Did someone get into the machine somehow and take money? Was it the armored car messenger or the bank teller? The deposit could have been created thirty days ago. Where do you start investigating?

Mobile POS. Mobile point-of-sale technology is a hot topic in retail these days (see page 15). The idea is to better serve customers by getting away from a big, clunky register stand near an exit and moving toward having a device an employee carries around to process a customer transaction anywhere in the store. Retailers are even now looking at how to ring transactions across town. Really?

How does that affect network and device security? How do you incorporate things like product-protection device removal or POSA (point-of-sale activation) for items like gift cards?

Self-Checkout. Self-checkout has been around longer than mobile POS, but has similar issues. With self-checkout the retailer provides all the pieces for ringing a transaction incorporated into a device that is managed by the customer. How do you ensure EAS deactivation or product-protection device removal only occurs when the product is sold? What about weight manipulation and coupon redemption?

Self-checkout machines are programmed with great anti-counterfeit measures, but what happens if you don’t keep up with the software updates? Will customers have the ability to give counterfeit cash as payment and get away with it? How do you monitor “bottom-of-basket” to ensure all items in a shopper’s cart are paid for?

It is important that as you consider each of these technology upgrades, differentiators, advancements…whatever you want to call them…that you consider what it means for

THE EVILS OF TECHNOLOGY

your business, how you operate, how your policies are written, and what protocols you would follow as circumstances come up that involve that technology. Thinking about and solving these scenarios today will keep your company liability low as time goes on. It may also keep your loss prevention associates out of trouble as well.

The World of Social Media

A lot of things have changed over the years and many of us who are in our mid-thirties and older are in some respects thankful that social media wasn’t in widespread use as we were growing our loss prevention careers. While today’s online world provides a number of benefits, it

also comes with a litany of potential issues for retail loss prevention professionals.

Today, there are well over 300 different social media outlets. You can post quotes, pictures, read blogs, and research what people are saying about you, your product, and your company. You can find a job or qualified candidates for a job you have open. You can post or watch videos on almost any topic. There is a blog, website, or discussion board to research or openly discuss any possible subject.

The next few paragraphs will touch upon a few examples of how social media can help you with an investigation or help you protect your brand, while also offering some tips on how to avoid some LP MAGAZINE | SEPTEMBER - OCTOBER 2013

of the pitfalls people have fallen into because they use social media without safeguarding themselves.

Let’s start with some statistics from Eric Qualman, who is a social-media marketing expert from Boston and author of Socialnomics: How Social Media Transforms the Way We Live and Do Business. Qualman’s book talks about how companies can maximize their marketing dollars with the use of social media and suggests that if companies do not use social media as part of their repertoire, they will likely find themselves out of business.

According to Qualman: There are 1 billion users on Facebook. If Facebook were a nation, it would be the

51

THE EVILS OF TECHNOLOGY third most populous nation in the world, exceeding even the population of the U.S. In ten years, 40 percent of all Fortune 500 companies will be out of business.

Those that embrace and use social media to sell their products will be more likely to succeed than those that do not.

93 percent of all marketers use social media.

90 percent of consumers believe the reviews they hear from their peers on social media versus 14 percent who believe what the manufacturer says about their product.

That last statistic revels the fact that we live in a world in which most people believe that what they see or read on the Internet must be true. In many cases there is something to support that feeling. People are very comfortable behind their computer screen and feel they can be very honest about anything.

It is a very interesting social commentary that two people standing in line at the grocery store will be very polite and allow someone else go in front of them or offer their coupons to another customer. However, you put those same two people in their cars approaching a toll booth or behind a keyboard in a chat room and the next thing you know there is swearing and extended fingers displayed.

People simply feel more comfortable when there is a barrier like a car or, in this discussion, the Internet between them and another person. And exacerbating the problem is the contemporary cliché that “Once on the Internet; always on the Internet.”

Using Social Media in Investigations

Before we discuss the “what not to dos,” let’s talk about how a loss prevention professional can use social media to monitor their brand or to conduct an investigation.

There are many tactics that deserve an article of their own. That said, we will cover some of them here. Like our hardware technology discussion above, however, you’ll have to determine how and when it is appropriate to use these tactics in your environment.

Google. One of the world’s most widely used search engines is Google, to the point it has become a verb—to google something.

You can use Google alerts to search for

52

As far as social media goes, understand what tools you have at your fingertips that could help you in an investigation.

From a personal standpoint, however, have your own plan on how you use social media.

Be smart and think about what you share in the cyber world.

You may share something with or something about someone you may want to work with someday that could turn around and bite you.

anything. You can be alerted if a particular grouping of words is used in order to dig deeper into that Internet story to find out if it is something you should know about and react to. I like to set up Google alerts for my name, my company name, and specific things like “organized retail crime” or “how to shoplift from ABC store.” You’ll be surprised what people talk about.

Blogs. Many police departments are using technology to blog about what is going on in their particular areas. Some post photos of criminals caught breaking the law. As a loss prevention professional, seeing these pictures may help you identify someone who has been hitting your stores.

You may also occasionally see the face of an employee of one of your stores.

Discussion Boards are usually topic driven. What this means is individuals get on a discussion board to talk about a particular subject. There is a site called Technorati that you can use to search discussion boards for certain topics. If you work in the auto parts industry and want to find out who is potentially selling black market part cores, search “auto part cores for sale – Chicago, IL.” Twitter is commonly used by today’s younger crowd, allegedly because their parents took over Facebook, or so some say. Twitter has a search engine much like outlined above. You can search tweets on a particular subject matter to see what is talked about.

Auction Sites. We are all familiar with online auction sites and that products stolen from retail stores or e-commerce sites can and do get sold on them. Sites like eBay have done a good job of partnering with law enforcement and retailers to curb such activity due to the efforts of Paul Jones and his team, but not all auction sites have followed suit with the same fervor and passion, unfortunately. Most sites, however, do have some sort of search functionality.

There are many out there of varying sizes and popularity, so get familiar with as many as you can, because when one site realizes a seller is dishonest and that seller is shut down, they typically move to another, less controlled auction site to sell their ill-gotten wares.

Facebook can be a tool to conduct investigations if someone doesn’t have security controls set up on their account. continued on page 54

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THE EVILS OF TECHNOLOGY continued from page 52

Many times photos, personal information, and tidbits of activity are visible without being connected to someone. Sometimes tracking a potential suspect from their profile to those of known associates can be done easily through Facebook. Many large-scale investigations that our teams have worked in recent years has had some work done through this outlet as well as other mainstream social media outlets.

Misuse of Social Media

The natural segue as we talk about social media is how someone in our profession should safeguard themselves when using it.

As mentioned above, there are lots of outlets out there and many are lots of fun (see the illustration “Conversations in Social Media” below). Reconnecting with old friends and being able to present yourself however you choose is an exciting notion. But keep one thing in mind—people are watching.

You may not know they are watching, but they are.

A friend in our industry illustrated this recently when he told me that prior to attending the National Retail Federation’s LP conference, he had detailed his family’s

54

pet dog’s treatment for a serious disease.

While attending the conference a few weeks later, he was approached by numerous other LP attendees asking him how his dog was doing. While some of those he knew were his Facebook friends, he was surprised that others were aware of his Facebook conversation.

Fortunately, this person’s experience was positive, and even heartwarming. However, there have been countless instances in which others have used social media in a personal way that have caused issues in their professional lives. Following are some examples.

Show of Respect. A woman was part of a guided tour of Arlington National Cemetery and decided it would be humorous to photograph herself standing next to a sign saying “Silence and Respect” while portraying herself as screaming and extending her middle finger. The woman’s picture was posted by a friend on a social media outlet where her supervisor eventually saw it. The woman was terminated, and the company issued a statement of apology.

Don’t You Remember? On a Facebook rant about her boss and job, a woman talked about how much she hated her job

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while calling her boss a few choice names.

Subsequently, the supervisor reminded the woman that she had recently added him as a Facebook friend. Not only did this make her look foolish, she was also fired from her job.

Setting the Bar Low. A bartender spewed on social media in a derogatory way about his customers and mentioned that he wished they would choke on glass. He lost his job when his supervisor found out.

Even the National Labor Relations Board didn’t want to have anything to do with supporting that employee.

Just Say No. Employees live in a world of instant messaging. When you go out for drinks with friends, put away the smartphone. Responding to a text message or email is not wise after a drink or two has possibly clouded your thinking or otherwise affected your professionalism.

Along the same lines, emailing and texting while driving a motor vehicle has become prevalent. Resist the urge to email or text until you get to your destination safely. Nothing is more important than your safety. If it’s that important, pull over before you pick up your smartphone. continued on page 56

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THE EVILS OF TECHNOLOGY continued from page 54

It’s in Writing. A couple of store detectives from a national retail store were texting each other back and forth about a known suspected shoplifter in their store. Suggestions were made that they needed to be ready for a fight.

When the fight ensued, one of the store detectives lost his smartphone in the struggle and someone else picked it up.

The contents of the text conversation were leaked to the press. The store detectives and their company had to deal with fall out because of it.

These are just a few samples of the evil side of technology. This discussion is simply meant to give us all pause to consider both the positive and negative aspects of social media and other unexpected consequences of today’s technological world.

Consider the Positive and the Negative

Technology can and should be a positive part of our professional lives as retail loss prevention professionals.

Technology is paramount in order to increase sales, productivity, and profits in our stores. Convenience to our customers has to be a priority in order to win and retain those customers. However, what is important to keep in mind is that technology can hurt us if we don’t pay attention.

We are never going to have the foresight to anticipate all the scenarios that could exist with the introduction of new technology. Be smart enough to engage the right people, on a regular basis, and keep all avenues of communication and feedback open. If you do that, you will hear of an issue early, plus you’ll have

the right people on hand to help you fix it…before it becomes a huge issue.

As far as social media goes, understand what tools you have at your fingertips that could help you in an investigation. From a personal standpoint, however, have your own plan on how you use social media. Be smart and think about what you share in the cyber world. You may share something with or something about someone you may want to work with someday that could turn around and bite you.

EDITOR’S NOTE: For further reading on this topic, see the following articles from previous issues of LP Magazine.

“A Practical Guide to Online Investigations,” July-August 2013 “The Threat of Social Media,” July-August 2011 “Social Networking—A Double-Edged Sword,” July-August 2010

KEVIN M. PLANTE, LPC, is director of LP financial reporting and analytics for CVS Caremark. He joined CVS this past January after fourteen years with Staples where he held multiple management positions, most recently manager of U.S. retail LP operations. He also held LP positions with BJ’s Wholesale Club and Marshalls and Caldor. Plante began his career in retail as a pick up window checker with Sears and Roebuck during college. He can be reached at 401-770-8083 or kevin.plante@cvscaremark.com.

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SOLUTIONS SHOWCASE PROTOS SECURITY

A Security-Guard Company Or a Technology Integrator?

P

rotos Security was founded nearly a decade ago by two Virginia Military Institute graduates—Chris Copenhaver and Patrick Henderson. It was a time of unparalleled growth of technology and communication, but they saw that the security-guard industry was not advancing with these new tools; so they decided to do something about it. “Our goal is to bring control to our clients through leadership, effective program management, and smart use of technology, ultimately bringing our clients the peace of mind they should expect,” says Patrick Henderson, vice president of Protos Security.

From that initial spark, Protos has grown to be a nationwide security-guard provider for permanent, temporary, and emergency-response services. Currently, with over 1,800 Protos-certified affiliate guard vendors, Protos has unsurpassed resources, placing security guards throughout the United States, Canada, and Puerto Rico. With one phone call to Protos, clients can then have the feedback that a guard is on-site.

Three years ago Protos was approached by a director of asset protection of a large-box retailer who had these words to say: “Our guard program is our largest line-item expense, and we don’t even know what’s going on; we need input from our security teams.” He was searching for help, and he wasn’t alone in his frustration in trying to manage a national guard program within this industry.

Reduce Costs/Boost Efficiency Think of Protos TeleReport™ as to the guard industry what GPS vehicle tracking is to the fleet-management industry. In much the same way, Protos can monitor, manage, and communicate with your guard program in real time. Protos creates an advantage for clients by providing many layers of efficiency, reducing the overall cost of the security-guard program.

“Protos handles all our permanent and temporary guard service needs...and now they are taking it to the next level.”

Chad Hixon, CFI, Director of Loss Prevention, maurices

Answering the Call

“From day one, we understood that we needed to be more than just another guard company,” says Henderson.

To change the guard industry, business intelligence needed to be implemented at the core of the service. Protos spent years investing in software development and listening to LP directors and managers articulate their pains of attempting to maintain budget and accountability for guard programs with a national footprint.

Phone & App

Email

SMS Text

Time Tracking

Incident Alerts

Invoicing

LP MAGAZINE | SEPTEMBER - OCTOBER 2013

57

SOLUTIONS SHOWCASE PROTOS SECURITY Protos TeleReport™ software service was created to become the backbone of a streamlined management operation and has fulfilled the role for which it was designed. Protos clients experience true transparency into their guard program and receive alerts, notifications, and reports quickly and easily, resulting in reduced administrative costs. Some customers have realized a 15 percent decrease in program costs.

You Have Options

Protos can evaluate your current guard program and determine where they can help with one of their program solutions.

Some customers have realized a 15 percent decrease in program costs.

1. Total Program Management

Protos is able to manage permanent, temporary, and emergency guard service nationwide. Clients make one call to a single point of contact and gain multiple layers of efficiency to reduce costs, while enjoying greater clarity and oversight.

The Protos Client Portal App is a valuable tool, providing the most convenient way to manage your guard program.

It is a free addition to the services that all Protos clients already receive.

2. Protos TeleReport

Some clients are mostly satisfied with their current guard staff, but want more control. Others are under contract and need improved information and communication. TeleReport is available as a stand-alone software service allowing clients to more effectively manage their existing security guard vendors.

Either option helps the client streamline their guard program and cut costs from their bottom line. The benefits include: Time and attendance tracking, Real-time incident reports, Tardy alerts/on-site notifications, Reporting/analytics, Quality assurance, Risk mitigation, Accurate billing from the actual time worked, and Free access to the Protos Client Portal App.

Taking It to the Next Level

Keeping pace with the march of technology and their client-focused approach is what has set Protos Security

58

“It’s innovation like this that will change the way the security industry works.”

Manager, Big-Box Retailer

apart. The logical step forward for this innovative company was to incorporate their industry-leading software with a mobile app. Now Protos clients have a convenient way to access their guard program anywhere and manage it from the palm of their hand.

So What Is Protos Security?

Are they a guard company or technology integrator?

They are both, and one thing remains clear—Protos will continue to innovate the security industry.

They are constantly finding new ways to integrate technology into the role of customer service and security-guard management.

Learn how Protos Security can streamline your guard program by contacting Protos Security at 866-403-9630 x105, or call Patrick Henderson directly at 540-400-3522.

Visit protossecurity.com for more information.

SEPTEMBER - OCTOBER 2013

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INDUSTRY NEWS

by Robert L. DiLonardo

Japanese Seniors Out-Steal Teens

F

or the first time in 2012, Tokyo’s elderly citizens were caught shoplifting at a higher rate than the city’s juveniles. According to a survey reported by The Diplomat, 24.5 percent of busts involved seniors over 65 years old, while juveniles accounted for 23.6 percent.

Age demographics provide an interesting glimpse into the growth prospects for different societies. Countries with a healthy proportion of inhabitants under the age of thirty have birth rates that engender economic activity—India is a prominent example.

Many of the world’s developed countries with low birth rates, like Japan, have fewer young people, and a high proportion of senior citizens. The population of Japan has actually fallen for the last three years.

Coupled with at least a decade of stagnant economic growth, there are fewer workers supporting Japan’s burgeoning number of people relying on government subsidy. The article points out that by 2060, about 40 percent of Japan’s population will be over 65 years old. The end result is that seniors are resorting to the pilferage of consumable necessities. In fact, 70 percent of the elderly arrests fit that category.

Is the U.S. heading in the same direction? The birth rate in the U.S. fell to its all-time low in 2011 (the last year of available statistics), as has the rate for teenagers. Our recent economic situation is far less than healthy, but as in Japan, there are fewer workers supporting welfare recipients, the disabled, and Medicare/Medicaid recipients.

Are more senior citizens resorting to shoplifting necessities out of desperation? Statistics are scarce, but my random sampling indicates that the answer is “Yes.” Are New York City’s proportions anywhere near those of Tokyo? Doubtful, but senior shoplifting is likely to increase at a higher proportion than in the past.

The Passing of an Icon: John H. Christman

By Charles A. Sennewald, CPP, CSC

On Friday, July 12, 2013, John Christman passed away, marking the sad loss of a true loss prevention icon. Christman stood tall in the security world generally and the retail industry specifically, as an innovator, educator, lecturer, author, respected executive, and in the final years of his long career, a sought-after consultant and expert witness. His office walls are covered

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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.

with an impressive array of awards, certifications, plaques, and news articles acknowledging extraordinary professional achievements, including his induction into the NRF’s loss prevention ring of excellence.

Despite his many feats, Christman is probably best remembered in the loss prevention community for his 22 years of service as VP and director of security with Macy’s West, where he directed a staff of over 500, with major John H. Christman distribution centers and sixty stores.

Prior to that appointment he worked with a major market chain based in Los Angeles, CA, where we met and became friends. Our relationship as a team of two in the early 1970s developed the now universally accepted “six steps” necessary for a shoplifting detention.

He was the first president of the California Merchants Association’s retail security committee, which was instrumental in codifying the act of shoplifting and civil recovery in the state’s penal code, a pioneering task of national note. That new retail statutory law (and concept) served as a model for many states. As the years passed we coauthored three books, Shoplifting (1992), Shoplifting…Managing the Problem (2006), and Retail Crime, Security and Loss Prevention, An Encyclopedic Reference (2008).

For a number of years he served as one of three moderators for the NRF’s LPinformation.com discussion forum with a large Internet following of mostly entry-level LP employees airing frustrations, comparing notes, seeking advice, as well as answers to their problems. Christman was deemed an “old salt” and was known as “Mr. C.” He was wise and solid as a rock. You could put your money on his opinions and suggestions.

He was a Certified Protection Professional (CPP) and long-time member of ASIS International, and had the distinct privilege of serving as the ASIS chairman of the San Francisco/Bay Area chapter.

John graduated from Muhlenberg College and attended the University of Pennsylvania’s Law School. During the Korean War, he served as a special agent for two federal investigative/intelligence agencies and is a retired commander in the U.S. Naval Reserve.

It was during that time he met the girl who would be his life partner, Jane Stevens, in Honolulu, Hawaii. Their 60th wedding anniversary was the very day of his death. That perfectly matched couple brought forth a daughter, Lauri, and two sons, Robert and Mark.

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The one word to best describe John Christman, the professional man, the private man, and the family man, is—integrity. Integrity is his legacy.

EDITOR’S NOTE: John Christman was featured in LP Magazine’s 2007 “Legends in Loss Prevention” series. Visit the Column section on LPportal.com to read that article. Following are remembrances from fellow loss prevention executives.

Remembering John Christman

“John Christman wore a coat of many colors. He was a loss prevention executive, innovator, mentor, author, and friend. He was active with the NRF advisory council for many years. I believe John was a generous contributor as well as a transitional figure for the loss prevention industry. He will be missed.”

Gary Manson, retired Vice President of Loss Prevention, Neiman Marcus “In my opinion John was one of the all-time top innovators in the loss prevention industry. The programs he had at Macy’s were well ahead of the industry. I looked up to him. If it wasn’t for his political connections and efforts, we would have never gotten the civil recovery laws written in California, which were the first in the nation.”

George Luciano, retired Vice President of Loss Prevention, Petco

assignment and to have an expert opinion on issues. After his retirement he remained active in the industry by coauthoring books on retail security and loss prevention. He also could be seen and heard at conferences. He was a gentleman and took pride in mentoring many in the industry. He will be missed and remembered.”

Jim Lee, Executive Editor, LP Magazine “The loss prevention industry is saddened by the sudden passing of John Christman. He was a distinguished leader in loss prevention and security, serving both the companies where he lead the LP organizations as well as the broader retail industry with his commitment to the NRF LP advisory council, where he served as an advisor for more than a decade.

He was a skillful and caring mentor of so many in the LP community and recognized for his contributions to the industry as one of the very first LP executives voted into the NRF’s ring of excellence by his peers in 2007. John continued to serve the industry, providing expert advice to others through the NRF’s “Ask the Experts” online forum. He was a truly dedicated professional.”

Richard T. Mellor, Vice President, Loss Prevention, NRF “I started my career in loss prevention at Macy’s West—Macy’s California back then—when John was the vice president of security. I had the pleasure of working directly with him for over

“I served with John on the NRF LP advisory council for many years. I recall him being very quick to volunteer for any

continued on page 62

Law Enforcement Ride & Run to Remember

October 12-13 | Washington, DC

www.RideandRuntoRemember.org LP MAGAZINE | SEPTEMBER - OCTOBER 2013

61

CALENDAR continued from page 61

September 10 – 11, 2013 Retail Council of Canada Loss Prevention Conference Toronto (ON) Congress Centre www.retailcouncil.org September 19, 2013 New England ORC Symposium & Trade Show 7th Annual Loss Prevention Conference DCU Center, Worcester, MA www.retailersma.org September 23 – 25, 2013 Consumer Returns Hilton Dallas (TX) Lincoln Centre www.consumerreturnsusa.com September 24 – 27, 2013 ASIS International 59th Annual Seminar and Exhibits McCormick Place, Chicago, IL www.asisonline.org October 15 – 17, 2013 Loss Prevention Research Council 9th Annual Impact Workshop University of Florida, Gainesville www.lpresearch.org October 22 – 24, 2013 ANTAD Loss Prevention Conference and Expo Hotel Marquis Reforma Mexico City www.antad.net November 4 – 7, 2013 Coalition of Law Enforcement and Retail (CLEAR) 4th Annual Training Conference The Weston Buckhead, Atlanta, GA www.clearusa.org November 20 – 21, 2013 ISC East 2013 Javits Center North, New York City www.isceast.com January 12 – 15, 2014 National Retail Federation 103rd Annual Convention & Expo Jacob Javits Convention Center, New York City www.bigshow14.com March 9 – 12, 2014 Food Marketing Institute 2014 Asset Protection Conference Hyatt Regency Riverfront Hotel, Jacksonville, FL www.fmi.org

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thirteen years. John was a pioneer in evolving our profession from security to loss prevention. He worked tirelessly to improve our professionalism, first at Macy’s, and then in the industry.

Professionally, I will remember John for his leadership. He led the Macy’s LP team in a positive and supportive way, always demanding the highest level of performance, but always helping us to get there. I saw that same leadership in his industry efforts outside of Macy’s.

Personally, he was my friend and mentor. He was the person I went to for advice whenever I needed an unbiased, objective opinion. He was always there for me and I will truly miss him. John was one of the best. I will be forever grateful to him for introducing me and enabling me to grow in this amazing profession. Thank you, John.”

Mike Keenan, Vice President, Loss Prevention, Gap Inc.

Store Theft Metrics Continue to Climb Jack L. Hayes International recently published its 25th annual Retail Theft Survey covering 2012 shoplifting and internal-theft statistics gathered from twenty-three large retailers with almost 19,000 stores and over $596 billion in retail sales. The “headline” statistics are unsurprising. While more shoplifters were caught, they tried to make off with more merchandise per attempt. The average shoplifting case value rose by 14.2 percent to $129.12.

By comparison, dishonest employee apprehensions rose 5.5 percent, but recoveries increased by only 7.0 percent. The average internal-theft case value was $715.24; up about 10 dollars from last year.

A peek inside the data reveals a couple of metrics that are cause for concern. The average recovery is rising, but is that really a positive statistic? The opposite case could be made. Many, if not most, retailers no longer apprehend shoplifters. For them, “bust”-oriented recoveries don’t happen. They could expect to lose merchandise at the average recovery rate.

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One out of forty employees in the companies surveyed was caught stealing, and presumably terminated.

The Hayes report opines that “there has to be some type of breakdown in the pre-employment screening process.” The case can be made that the process isn’t broken, the applicant pool is polluted.

Hayes’ own job applicant admissions statistics buttress this argument.

Researchers studied over 19,000 randomly selected applicant review questionnaires given nationwide.

While 64.1 percent of applicants were considered “low risk” and presumably hirable, the rate of admissions to honesty-oriented questions far exceeded the 2.5 percent rate of busted employees to the total as reported in the theft survey. Here are a few worrisome answer rate examples from the low-risk questionnaire pool: I have stolen merchandise within the past three years—4.5% I could be tempted to steal from my employer—7.8% I am not an honest person and might steal or cheat—1.7% One dishonest employee out of forty doesn’t look too bad compared with the potential from this pool of employable applicants, does it?

Finally, survey respondents were asked their opinion on the causes behind their statistics. Theft causes most prominently mentioned were: Growth in the scale and complexity of organized retail crime.

Lack of improvement in economic conditions.

Reduced sales-floor coverage.

Higher demand for merchandise because payoffs from Internet sales are higher.

Over-burdened criminal justice system.

The increases in apprehensions and recoveries were attributed to: Increased LP staff productivity and Stronger awareness among store personnel.

It’s a good thing that hiring decisions aren’t based solely on answers to the honesty test questions. While drones have been employed to deliver cakes in Shanghai, robot sales associates haven’t been perfected yet. Until they are, we just have to manage the dishonesty risk.

PEOPLE ON THE MOVE

Tom Mace is now VP AP for 99¢ Only Stores.

Amanda Kilpatrick was named Regional LP Investigator at ANN INC.

Mark Quick is the new Retail AP and Safety Manager for Goodwill of Orange County.

Chris Farnan was named AP Manager at The HoneyBaked Ham Company.

Joe Frattitta was named Director of Training, Communications, and Investigative Analytics for Saks Fifth Avenue.

Matthew Granelli, MS is now Investigator with Horizon Blue Shield of New Jersey.

Steve Hanks, Geran Maples, and Kimberly Raish were made Area LP Managers and Justin Henkenberns is the new Director of LP Services for Sears Holdings.

Kelly Dimitroff was named Fraud Investigations Specialist and Thomas Wallace LP Specialist at jcpenney.

Kenneth McLean, CPP was named Manager of LP Services for Sherwin Williams.

Bob Serenson is the new Director of Corporate LP at Bed Bath & Beyond.

Chris Prochut, CFI, LPQ is Presentor at Law Enforcement Suicide Prevention and Mental Illness Awareness at Kohl’s.

Scott DeFrancesco is now Field LP Manager at Staples.

Carlos Talbott is now District LP Manager at Big Lots.

Doug Ronspies was named Market Investigator for Kmart.

Brian Finnicum, LPC, CFI was appointed Corporate LP Manager for Sterling Jewelers.

Scott A. Porter, CFI was named Regional LP Manager for Burlington Coat Factory.

Paul J. Stangeland was named Director of Sales - West for Langhong Technology USA, Inc.

Chuck Tyler is now Senior AP Specialist with Target.

Matthew Dobbins, LPC, CFI is now Regional LP Manager at CKE Restaurants, Inc.

Gabriel Montiel is a new Market Organized Retail Crime Investigator for Limited Brands.

Andrew Okronick was appointed Regional LP Manager for Columbia Sportswear.

David Rey was named AP Manager at Louis Vuitton N.A.

Danny Whaley is Regional LP Manager for Asset Protection Associates.

Patrick Stelmaszyk is now LP Supervisor at Banana Republic.

Katie Catalogna was named Inventory Control Manager for Barneys New York.

Kevin McMenimen, LPC was named COO at Contact, Inc. CVS Caremark made the following changes: Roy Herrera, Lisa Bryant, Mike McDonald, and Dennis Loergan are new Regional LP Managers and Theresa Rudder is Senior Market Investigator.

Anthony Rodriguez is the new Senior Manager of LP at David Yurman.

Matthew Robinett, Manny Queiroga, and Steven Williams were appointed AP Managers for Macy’s Logistics and Operations.

Shane Jennings, CFI, CFE is now Director of LP, Safety, and Inventory Control for Music & Arts, a division of Guitar Center, Inc. Sergio Espinoza is the new District LP Manager for National Stores Inc.

Jim Stephens is now Director of LP for dd’s DISCOUNT.

Isabelle Valencia and Jennykirstina Astrup were named Regional LP Managers at Nordstrom.

Dennis Thomas, MBA was named Corporate LP Operations Manager for Delaware North Companies.

Randy Soop, LPC is now District LP Manager for Office Depot.

Denny DeMarcy, LPC is the new Regional Director of LP at DICK’S Sporting Goods.

Alan Shippen was named LP Manager at Duty Free Americas.

Brandon Mathews, MS, CFI, LPQ is now Senior Operations Manager of Fraud Detection for Firstsource Solutions Ltd.

Eric Hebert, LPC has been made District LP Manager at T.J.Maxx.

Misty Davis is a new Regional AP Manager for Toys“R”Us. Thomas Egan was named Regional LP Manager at True Religion Brand Jeans.

Dave Kalbaugh, CFI is now Regional LP Manager for ULTA Beauty.

Matt Koury, CFI and Sheila Martinez, CFI were named Regional LP Managers for Victoria’s Secret.

Walgreens made the following changes: Tim Gorman to Divisional Vice President of AP and Ken Amos, LPC to Divisional VP, Operations, SupplyChain Initiatives.

John W. Reid, LPC was named Compliance, Safety, and AP Area Manager and Adam Labanosky is now Global Investigator II for Walmart.

Dustin Hudgins, CFI, LPC was made Regional LP Manager at Payless ShoeSource.

Jennifer Florez is now LP Data Analyst at RadioShack.

Ian Vernon, CFI was named Regional Manager of AP and Max Creason is now AP Supervisor for Ralph Lauren.

Karvis Jernigan is a new Regional LP Manager for Rent-A-Center.

Michelle Anderson was named Area Investigator, and Catherine Patterson is now Area LP Manager for Gap Inc.

Shaun Sabins was named AP District Manager at Rite Aid.

Lori Dearwester is now Corporate AP Manager for Goodwill Industries.

Alex Alaniz is the new Senior Area LP Manager for Ross Stores.

LP MAGAZINE | SEPTEMBER - OCTOBER 2013

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.

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65

PARTING WORDS

Bumping into People

Jim Lee, LPC Executive Editor

B

e on the lookout as you go through life because you might accidentally bump into someone you deem important. Or someone who has achieved a great deal of success in their life. Or someone who is viewed as an expert in their chosen profession.

I think we all like to shake hands or have a friendly conversation with people like this. Afterwards we go as fast as we can to tell our friends and family we met someone like this. It is a good feeling, don’t you think?

I recently had an experience like this myself, of all places, on the golf course. I was paired with three other golfers at a golf event. The three knew each other, so I introduced myself. As I went through the introductions, I realized who I was playing with. One person was a former NFL coach who had two Super Bowl rings and was known for his defensive style of play. Another was a former all-star NFL center who had blocked for some of the great running backs. The last was a college all-American basketball player and very successful college coach who was known for his intensity.

And yes, afterwards, I did make a big deal out of it with family and friends.

Be on the lookout as you go through life because you might accidentally bump into someone you deem important. Or someone who has achieved a great deal of success in their life. Or someone who is viewed as an expert in their chosen profession.

As I reflected on this “celebrity” experience of mine, I thought about how over the years I had “bumped into” many important, successful experts in loss prevention. I recalled how each had a personal trait that separated them from others. This led me to thinking about a magazine event coming up in October where I will have the pleasure of bumping into many of those experts again.

So, I took the roster of attendees of the upcoming event and labeled each person with what I thought was the memorable personal trait that separated them from others.

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Here is a partial list. Perhaps you will recognize a friend, colleague, or even a boss from the list.

I will bump into a person who had a meager start in the business, but has a mountain full of accomplishments and has never forgotten where he came from.

I will bump into a person who is ultra-competitive and always needs to win. His losses are so rare that when it does happen, he may not enjoy the winning as much.

I will bump into a person who does not hide his feelings, thoughts, or hopes. He shares them with others and feels self-content from doing so.

I will bump into a person who believes that physical exercise as basic as walking 1,860 days in a row makes her healthier and creates a positive uplifting attitude that she shares with others.

I will bump into a person who has experienced some bad times and challenges, but realized that they were temporary setbacks and fought back the disappointment to achieve even greater success.

I will bump into a person who believes that giving help is a win-win situation, and that even a gesture of friendliness makes another person feel better and makes herself feel better as wwell.

I will bump into a person who recognized that he does certain things well and others not so well. So he spends his time being the expert in his good areas and avoids his faults.

I will bump into a person who always leaves some time to enjoy the day, be a little silly, and laugh.

I will bump into a person who witnessed others making more money, being smarter, and maybe being better liked.

But, he realized his life has been shaped by his everyday relationships and not by the lives others.

I will bump into a person of a mature age who has heard the myth that only the young can enjoy life to the fullest.

The truth for this person is that older people do not consider their younger days to be their best days, so he enjoys his senior time more than any other part of his life.

There are many others who have a personal brand that I will bump into at our meeting. It will be a bigger “wow” experience than meeting those famous people on the golf course…none of whom knew anything about shrinkage or asset protection.

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Esta tienda solía ser un blanco fácil para los ladrones como yo, pero ahora que están utilizando productos de Alpha, tendré que ir a otro lugar.