THANK CRUNCHIE IT WAS FRAUD DAY

Retail Fraud Awareness Day proved a sweet success

Thousands of Crunchie Bars proved a sweet success as part of the Retail Fraud Awareness Day on June 30.

The chocolate was used as promotion to highlight the fact that UK retailers are losing around £4 billion* in shrinkage - loss caused by theft, fraud, waste or process failure - every year.

Under the headline: Thank Crunchie it's Fraud Day, this staggering, yet conservative figure became the catalyst for the Retail Fraud Awareness Day™ with hundreds of store staff taking part in awareness briefings on the day itself, and others allotting other days to fit in with training initiatives.

More than 80% of shrinkage is due to either shoplifting or organised gangs stealing stock (42.6%), employee dishonesty (34%) or theft in the supply chain (5.6%).

The Retail Fraud Awareness Day^TM, sponsored by The ORIS Group and Retail Fraud Magazine, will now become an annual event in the retail calendar.

The top 500 retailers were contacted by letter and email, and a new website to register support and to download store briefing packs has been launched. The packs are a step-by-step guide to identifying fraud 'hot spots' and introducing a culture of awareness and zero-tolerance in all stores in the UK.

Letters were also sent to the Commander Mark Simmons at the Metropolitan Police who is the lead officer on business crime for the Association of Chief Police Officers (ACPO) and to Alan Johnson MP, the new Home Secretary who replaced Jacqui Smith in the recent Cabinet re-shuffle.

A number of major retailers supported the day including heads of loss prevention at some of the High Street's biggest names including Borders, HMV, Harvey Nichols, Monsoon, New Look, Paperchase and Peacocks.

Executive chairman of New Look, Phil Wrigley, the founding sponsor of the Retail Loss Prevention Fashion Forum, says: "I supported Retail Fraud Awareness Day because retailers cannot manage their losses without measuring them in the first place and to do this effectively there needs to be a culture of zero tolerance towards fraud throughout the organisation. It cannot be ignored as a problem and tackling it head on is more important than increasing sales. Having a day that focuses attention upon the damage that fraud does is a critical starting point with the ultimate aim of making every day about awareness and prevention. Everyone can and should be making a difference."

Brian Lenehan, company security manager at Harvey Nichols, said: "I support any initiative that will assist to both increase awareness and reduce instances of retail fraud which unfortunately these days is all too common."

His colleague Julie Phillpott, senior business analyst for retail, added: "I support ideas and processes that will assist reductions of shrink and fraud across our company, be it through more visibility of actual issues, improving our current procedures or the introduction of new technology."

Even those senior retailers that are not planning action on the day have sent personal messages of support. Justin King, the chief executive of Sainsbury said: "I wish every success to your campaign and I send you my best wishes for the future."

Retail Fraud Awareness Day is also being observed outside of the UK. Lifestyle Sports Ltd which has 70 stores in Ireland and 23 in the Czech Republic, used the RFAD store briefing packs to communicate the shrink message to shop floor staff.

John Murphy, head of security for Lifestyle Sports, who will be leading the briefings of approximately 500 staff with his loss prevention teams, says: "We found it a really useful pack of information because it contains a lot of hints and tips about how to communicate effectively across to the entire business. We are always looking for ways of getting the message on shrink and loss out there.

"Our teams used the Crunchie Bars in a very creative way. They hid them in 'hot spots' around the store so that by finding them they were driving home the message of which areas to be aware of for suspicious activity."

The call to action was launched by Laurence King, Chairman of The ORIS Group and one of the UK's leading loss prevention experts and sponsor of Retail Fraud Awareness Day.

"At a time of economic recession, retailers have it within their gift to reduce their losses through tighter control of their people, premises and processes, all of which are costing them a vast amount of money," says King.

"Detailed examination of the retail shrinkage figures reveals that the percentage that is fraud-related is significantly up, in some cases by up to 50%," he adds.

"It is about culture and behaviour change, training and transparency - these are the drivers that will make shrink a zero-tolerance issue across the business,"

He said June 30th was all about making retail directors aware of the fraud pinch points and their interaction as part of a longer-term profit protection strategy. According to King, five key points have emerged as key to unlocking problems of fraud within a retail business. These are:

1. Your people... who is committing fraud - where and how is it happening?
2. Your stores... do you know which are your 'hot' fraud stores and which are not?
3. Your processes... where are the weakest links within your supply chain for fraud?
4. Your communication... how are you engaging and empowering staff to report fraud?
5. Your technology... do they prevent or detect fraud across the entire business?

"We wanted retailers to think about all of these areas and their interaction, as well as how they are communicating fraud and shrink measurement and management to the business. Letting people know that profit protection is a key performance indicator sends a very powerful message of prevention and empowerment for those staff who are contributing to shrink reduction directly or indirectly and can make a difference on the ground and to the bottom line."

*Figure source: Global Retail Theft Barometer. The figure per second was extrapolated from the £4.1 billion calculated by the Centre for Retail Research to be lost to businesses in the UK. The assessment is believed to be conservative because it is based upon six days of trading within normal opening hours. It does not factor in 24-hour trading.

Retailers wanting briefing packs should email action@fraudawareness.co.uk.

For more information, contact John Wilson at Free Range Heads on 07834 460345/07766 660790 or email john@freerangeheads.co.uk.

Fagin's Den

London still centre of fraud and criminal activity say CIFAS

It's not quite Dickens' den of pick-pockets and cut purses, but research by CIFAS - the UK's Fraud Prevention Service reveals that London remains the key hotspot for fraudulent activity.

When looking at addresses actively involved in frauds recorded by CIFAS members, the top 10 most commonly appearing postal districts are: SE18 - Plumstead, IG11 - Barking, E6 East Ham, SE15 - Peckham, SE28 - Thamesmead, E17 - Walthamstow, CR0 - Croydon, E7 - Forest Gate, E16 - Bromley by Bow and E13 - Plaistow

CIFAS Research Manager, Sandra Peaston, comments: "London is a city of dense population where material wealth and disadvantage can be found in close proximity. It is therefore perhaps unsurprising that the most active fraud hotspots should be centred around the London area. The fact that only three postal districts in the top 30 are outside London clearly underlines the intensity of this activity, which presents a rather bleak portrait of the nation's capital city."

Victims are not just based in London

A similar analysis of the top 10 postal districts for the locations of the victims of impersonation (where the fraudster uses details to apply for accounts in the victim's name) and facility takeover (where the fraudster hijacks and plunders the victim's account) shows that distance is no problem for the fraudster.

While the CR0 postal district (Croydon) has the highest number of recorded victims of both impersonation and facility takeover, the 10 most prevalent postal districts for the victims of impersonation include HA2 (Harrow) and LU2 (Luton): displaying a slight shift away from the typical London locations.

This shift away is most dramatically seen in the top 10 districts for victims of facility takeover, however, where only four of the postal districts are traditional 'London' areas. Postal districts from Maidenhead, Aldershot, Beckenham, Birmingham, Hove and Leicester show the geographical spread of facility takeover victims to be much wider than the hotspots for fraudulent activity.

CIFAS Communications Manager, Richard Hurley, comments: "The geographical spread of victims is proof of the dangers faced by modern consumers. The relative closeness to London of victims of impersonation is, perhaps, not too surprising. With fraudsters requiring access to a full set of the victim's personal data, proximity is likely to be a factor. The range of locations where victims of takeover are to be found, however, just underlines how often this traumatic type of fraud is carried out remotely."

Sainsbury's 'tries something new' in robotic surveillance

Installing conventional CCTV equipment to monitor activity inside a building the size of 10 football pitches, is always expensive.

At Sainsbury's 700,000 sq ft Hams Hall Distribution Centre a mobile robotic surveillance system SmartTrack^TM is proving much more cost-effective.

Two Sentry^TM SmartTracks, each 114 metres in length, have been installed by Intrepid Security at the Sainsbury's Hams Hall facility in Coleshill, Birmingham. The SmartTrack systems are equipped with concealed pan, tilt and zoom cameras which glide along tracks at speeds of up to 13 feet per second, enabling an operator to swiftly position the camera over any activity or incident.

"The main reason for installing the SmartTrack systems is for health & safety compliance," said Anthony Hooper, Regional Loss Prevention Manager for Sainsbury's Supply Chain Security. "We are determined that all 750 of our staff who work at Hams Hall can do so in a safe environment. The SmartTrack systems have certainly helped us to be effective in this respect and at the same time they have offered us the additional bonus of being able to closely monitor operations in our loading bays."

On-site security personnel are using the SmartTrack systems to ensure that there is strict compliance with the company's health & safety rules and there have already been a number of incidents where they have assisted in identifying individuals who have broken the safety rules. "It may be a disciplinary matter or just a case or retraining, the important factor is to ensure that the individuals concerned are adhering to best practice."

The two SmartTrack's have been suspended from the building's 22 metre high ceiling structure to an operating height of six metres, allowing operators clear views into the rear of all loading and unloading vehicles throughout all loading bays as well as views of activity along each of the distribution centre's many storage and picking aisles.

SmartTrack acts as a powerful deterrent as the cameras are hidden behind mirrored enclosures and are virtually silent running. As well as being operator controlled, the systems can be pre-programmed for up to six automatic tours, each of which can have up to 60 preset positions.

Iain Hay, National Loss Prevention Manager for Sainsbury's Supply Chain Security stated: "To achieve the same benefit with more traditional dome and static cameras the quantities of cameras and associated equipment necessary would have been cost prohibitive. As a result of the coverage and cost savings achieved at Hams Hall, mobile robotic camera systems have been included in the specification for all new distribution centres and for sites requiring refurbishment."

On the record - HMV praises new hosted loss prevention system

The UK's leading music retailer HMV has reduced fraud and improved its detection rates following the implementation of Secure, a new hosted Loss Prevention solution.

HMV was running an in-house developed suite of data warehouse reports, and while it could specify the type of exceptions that it wanted the system to look out for, this approach was very labour intensive.

Colin Culleton, Head of Risk and Loss Prevention at HMV, said, "Our old system only flagged up basic transaction exceptions, with further interrogation requiring searches via dual databases. We were impressed by the way that other retailers which use the Sysrepublic solution had been able to work to prioritised to-do lists, allowing the team to plan its day around the key hits from alerts in the system."

Due to the IT integration of Waterstone's and HMV, it was decided that HMV would opt for a hosted solution, to reduce pressure on the IT department. The project started with a four week, 30 store 'proof of concept'.

Culleton continued, "In the first few weeks we were seeing a large number of 'exceptions' within the system, which has already paid for itself. Refunds were a hot spot for us, and the growing use of electronic gift cards has presented a new problem, with the challenge of implementing fraud protection that doesn't impact transaction time. Secure has achieved this. We set a tolerance level for transactional activities in our key risk areas, and the system applies these as rules."

The full implementation went live just before Christmas 2008, a key time for HMV, with the enhanced risk of loss via fraud and error due to the significant increase in transactions.

Culleton said, "The system is already meeting and exceeding expectations. We like the fact that it has obviously been designed by security experts, rather that just from an IT perspective. We are also able to take advantage of the R&D investment that some of the large supermarkets, who are also customers, have put into the system."

"As it's a hosted solution, HMV doesn't have to worry about maintenance, and our IT department commented that the project was seamless. As IT is such a precious resource, they liked the fact that Sysrepublic kept to deadlines, were clear with what they were doing, and when they would deliver," he added.

HMV has also been able to ensure that operational compliance is being adhered to, for example, making sure that promotions are being run correctly at the till.

David West, Managing Director, Sysrepublic said, "Our solution differs distinctly from other providers in that it identifies not only the immediate source of loss, but loss over time. This enables retailers to identify staff who are operating scams over time and builds the information they need to initiate investigations."

Retail Fraud "On The Road"
7 October 2009
Walkers Stadium, Leicester

Retail Fraud Conference
20 April 2010
Novotel London West

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