2007 Blog Archive

Effective Loss Prevention

For retailers, the first step is to know that the problem exists, and to put some resources towards that problem. We always say that it’s good to get some independent advice because a new set of eyes can be far more objective than those of someone who’s in the place the whole time. Get someone who will do assessments in your premises to look at how your premises are structured and how staff operate. (Inside Retailing, December 12, 2007)

Many Retailers Open to Wireless Attack

During a recent study, AirDefense (a wireless security vendor) staffers used wireless antennas to test the wireless “perimeters” of some 3,000 stores in major malls across the globe. The company discovered some 2,500 laptops, hand-helds, and barcode scanners and approximately 5,000 access points — and about 85 percent of them would have been relatively easy to hack. (Dark Reading, November 15, 2007)

Shoplifters get smarter

Shoplifting has gone big-time. Groups of thieves armed with store floorplans and foil-lined bags to evade security sensors are making off with vast quantities of merchandise. Selecting items from a ringleader’s list—electronics, razor blades, and baby food are among favored items—a savvy “booster” can haul off $5,000 to $10,000 of goods in a single day, according to the FBI. (Business Week, November 19, 2007)

Price tag for holiday fraud: $3.7 billion

The trade group estimates that return fraud will cost retailers $3.7 billion just in the fourth quarter, compared to $3.5 billion for the same period last year. For the year, retailers will lose about $10.8 billion to return fraud. (Money, November 7, 2007)

Study: Major Retailers Misperceive Shrink

Most major retailers perceive wrongly that shrink is a bigger problem for their competitors than for their own organizations, according to a new research report by the Loss Prevention Research Council sponsored by IntelliVid.

According to the study of more than 100 major US retailers, only 10 percent characterized their shrink as high compared to their competitors, while 65.5 percent said it was average. Twenty-four and half percent said their annual shrinkage was lower than average. One reason for this misperception may be there is no agreed-upon shrink measurement method, according to the survey. While 42.9 percent of respondents said their companies measure shrink “at cost,” some 57.1 percent reported their companies measure shrink “at retail price.” The differences exist within and between retail segments. (Retail Wire, July 25, 2007)

California Bill Would Put Data Breach Responsibility on Retailers

The California Senate Judiciary Committee on Tuesday approved a bill that would shift the burden of notifying consumers about data breaches from financial institutions to retailers. Under the bill, retailers doing business in California would have to notify consumers when and where their credit or debit card information was lost. The bill would also require retailers to pay for the costs involved in notifying consumers, as well as the costs of reissuing cards. In addition, retailers would be required to follow the Payment Card Industry data security standard. The bill is opposed by the state’s retail and banking sectors, which could block the bill in the Senate Appropriations Committee, where it must be considered before the fiscal deadline of Aug. 31. If those efforts fail and the bill becomes law, it could serve as a model for similar legislation on the federal level. (Information Week, July 6, 2007)

Retailers Asked to Adopt Standard to Combat Card Theft

Many states are expected to follow Minnesota’s lead and enact into law the Payment Card Industry Data Security Standard (PCI DSS). The U.S. federal government is also trying to enact privacy legislation that would provide consistent protection of cardholder data as well as a common framework for securing that data, said Canadian IT security consultant Mary Kirwan. Meanwhile, the Canadian government is looking into ways to better protect cardholder data, though it may not take legislative action, Kirwan said. Canada already has existing federal privacy legislation that requires organizations to provide ways of securing personal data and other sensitive information that is under their control. However, Kirwan said that she believed that legislation may not be the best way to ensure the safety of cardholder data. Instead, each player in the transaction process should live up to their responsibility to make the data secure, she said. (PC World Canada, July 6, 2007)

In the pursuit of happiness

When Rosa Chun decided to test the claim that happy staff make happy customers, she made two discoveries: first, many managers believed it so implicitly that they saw no reason to research it. Second, there is no empirical evidence for such a claim. Ms Chun is a professor of business ethics and corporate social responsibility at Manchester Business School. For her study, she interviewed 10,000 people (half were customer-facing staff, half were customers) at 13 UK retail organisations in financial services, food retailing, telecommunications and insurance. She asked: how satisfied they were, whether they would recommend a friend to work for the company or buy its products, and so on.Some business units revealed a positive correlation between happy staff and happy customers. But there were others where staff were happy but customers unhappy, or where customers were happy but staff were not. “Most managers believe the link because they have read some books,” Prof Chun says. “But when you dig into their actual experience, they have very little evidence.” (Financial Times, June 14, 2007)

ASIS Throws Hat into Standards Ring

Get involved or don’t get heard was the driving force last week for ASIS International’s decision to refocus its attention to developing standards for the security industry. ASIS officials announced last week that the 35,000-member security organization had a responsibility to aid in the process of developing standards, said Mark Geraci, chairman of the newly named ASIS Commission on Standards and Guidelines. In 2001, ASIS established the Commission on Guidelines to create guidelines to increase the effectiveness and productivity of security practices and solutions. That is no longer enough, Geraci said, after noticing other security organizations were creating standards initiatives with or without ASIS’ input.

“When you become well aware of the changes that are happening, you start receiving feedback from around the world and notice that ASIS doesn’t have a voice in the development of these standards,” Geraci said. “We realized that either we get involved and change our focus, or these standards would be written without our input.” (Security Director News, May 31, 2007)

Store design plays key role in reducing shoplifting

Video surveillance, loss prevention personnel and exception reporting are various tactics retailers use to mitigate shrink. And now, according to new research from the University of Florida, interior design is another tool LP departments can work with to further reduce the chances of theft inside stores. Caroline Cardone’s master thesis for UF’s interior design department takes an in-depth look at how a store’s interior layout can influence a shoplifter’s decision to steal. (Security Director News, February 1, 2007)

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