External Theft

•       A Word About Employee Safety

•       Robbery

•       Shoplifting

•       Credit Card Fraud

•       Bank Check Fraud

•       Travelers Check Fraud

•       Counterfeit Bills

•       Short Change Artists

•       Till Tap Artists

•       Price Tag Switching

•       Fraudulent Returns

•       Examples of Video Theft  

      External theft is defined as those losses that occur from a source outside the company or store.  Externally caused losses are increasing each year in the retail industry.  In this section of the Manual, we will identify various types of external loss and what can be done to prevent them from occurring.

 

     A primary concern of any company’s loss prevention program is personal safety.  Any owner, manager or employee should act with the safety of themselves, as well as the safety of others, paramount in their mind.  Remember that there is no amount of cash or merchandise that is of greater value than you or your employees.

So don’t take any unnecessary risks.

      Whenever possible, management should handle any irregular or unusual situation.  In these cases, it is also wise to have a second person on hand as a back up.  When a situation gets out of control or appears to be at all dangerous, back off.  Never use physical force.  If an incident involving any type of weapon occurs, it is best to remain calm and cooperate completely.  Call for security or the police.

       The physical apprehension of a robbery suspect should be the sole responsibility of law enforcement agencies.  Under no circumstances should an employee jeopardize his life or the life of others in order to detain or apprehend a criminal suspect.  In the event a store’s assets or property are taken by force or presumed force, it is recommended that an employee or owner do the following: 

      • Do whatever the robber says.  

      • Do not physically or verbally assault the perpetrator in any way. 

       Robbers seldom hurt someone who cooperates.  Focus your attention on being able to identify the robber by his or her:

       • Sex

      • Age

      • Height

      • Weight

      • Complexion

      • Hair color

      • Eyes (glasses)

      • Mustache or beard

      • Marks, scars or tattoos

      • Voice/accent

      • Type of clothing (hat, tie, shirt, pants, jacket/coat, shoes, jewelry

       Keep the encounter as short and smooth as possible.  Remember, the longer the robbery takes, the more likely the robber is to get nervous or use a weapon.

    • Do not argue.  Once it has started, it is too late for the robber to stop.

    • Do not fight.  No amount of money is worth the risk of being hurt or killed.

     • Do not use weapons.  Chances of injury increase if a weapon is kept in the store.

    • Avoid surprises.  If someone is in the back room or expected soon, warn the robber.

           • Do not chase or follow robbers.  They shoot at pursuers.  Police shoot too if they think the pursuer is one of the robbers.

            • Call the police or 911.  Stay on the phone with authorities until you are told to hang up.

 

       Shoplifting is the most common and visible form of external theft. Simply put, it is the theft of goods from shelves or displays of a retail store by someone posing as a legitimate customer.  Depending on the company, external losses can account for 20-60% of a store’s total losses. Clearly, it is one of the easiest ways for an organization to lose  money.

      A shoplifter can be anyone in the store.  One study estimates that one in every 10 people attempts to shoplift.  Whether it be a professional (whose shoplifting activities are termed “boosting”) or an amateur, the shoplifter wants to accomplish three objectives:

       • Enter the store unnoticed;

      • Conceal merchandise without being seen;

      • Leave the premises without confronting an employee.

 Spotting The Shoplifter

       A shoplifter’s actions and characteristics such as eye movement and body language will warn you in advance of their intentions.  Here are some common characteristics of shoplifters: 

      • Take too long in deciding what to buy.

      • Linger in one area or wander aimlessly.

      • Boosters will enter as a group and then split up.

      • Watch store personnel carefully.

      • Switch or remove tickets or alarm stickers.

      • Consistently shop at hours when staffing is low (lunch, dinner, early in the morning, late at night).

      • Carry large open shopping bags, handbags, grocery bags, knapsacks, gym bags, etc.

      • Carry around large amounts of product.

      • Could have a baby stroller without a baby.

      • May wear baggy clothing (Also watch for excessive clothing in warm weather or a coat draped over their shoulder and arm.  Most shoplifters conceal merchandise in their clothing.  Professionals often have a specially sewn “jacket” inside of a coat or jacket in which merchandise is placed.  Shoplifters may also place merchandise down their pants, in sleeves, in socks or boots, or other articles of clothing.)

      • Enter a store numerous times in one day.

May appear nervous.

      • Refuse customer service.

      • Attempt to distract you.

      • Linger near the front of the store waiting for the chance to grab merchandise and run with it.

      • Make purchases while concealing more expensive merchandise.

      • Often, especially with larger stores, shoplifters will move merchandise to another part of the store.  With boosters, this movement may be to a central location or a pickup point, usually in a part of the store with a hidden or obstructed view.

      • Shoplifters steal with their hands.  If you are suspicious, watch the hands.

 Preventing Shoplifting

      The best way to prevent shoplifting is to use prompt, effective customer service.  The last thing a shoplifter wants is constant attention.  Remember good customer service can make additional sales as well as prevent losses.  If a customer makes a selection and continues to shop, offer to hold the items at the register.

      When you are out on the sales floor, regularly look around the store.  Eye contact and smiling at customers will most often deter shoplifting.  Always wear store insignia (name tags, shirts, etc.) to easily identify you from other customers in the store.

      If a customer is watching you, they may need assistance.  But it is possible they may be thinking about committing a theft.  Do they have any of the characteristics, or are they showing any of the actions of a shoplifter listed above?

Preventive Measures

      • Know the risk areas in the store, such as back corners, sections hidden by a large display, or any other section that is hidden from view.  Check them frequently.

      • Keep personnel on the sales floor as much as possible.  You can’t stop a shoplifter in the back room.

      • Try to watch the sales floor, even while replenishing stock or helping a customer.

      • Store personnel should work as a team.  Notify management and other personnel if you see someone or something suspicious.

      • Do not leave registers unattended.

      • Do not allow customers behind counters or in the stock room.

      • Keep product (other than displays) off the counters.  If a customer selects an item for purchase, offer to carry the selection to the register for them.  This will prevent shoplifters from walking around the store with concealable product.

      • If you leave a customer you are helping, tell them you will be right back.

      • Keep track of the number of items handed to a browsing customer.  Be sure to get all the unselected items back.

      • Keep stock well organized and evenly distributed.  This makes it easier to identify a set-up or discover anything out of the ordinary.  A messy store invites shoplifting.

      • Watch for large quantities of product located in the wrong section or quantities of product out-of-order in under stock (booster set-up).  If a set-up is found, notify management immediately and return the product to its correct section.

      • Be suspicious of someone who tries to keep your attention away from the sales floor or who drops items over the counter forcing you to pick them up.

      • Do not put a blind spot between you and the customer.  Stand alongside the customer , not in another aisle.  This allows a better view of his/her hands.

      • If you have an Electronic Article Surveillance (EAS) system, make sure it functions properly.  Have the appropriate merchandise tagged and respond to every alarm.

 Apprehension

      There will be times when prevention is not possible and detection does not stop a person from shoplifting.  No one wants to become involved in a situation where the potential exists for confrontation.  Please keep in mind that this is a last resort. 

You should always concentrate on preventing the theft.

      In creating a loss prevention program, each store should be aware of local and state laws on shoplifting.  A call to the local police can provide this information.  Failure to abide by local statutes when attempting to apprehend a shoplifter can result in costly lawsuits.  Retailers should be aware of the basic elements of a shoplifting charge.  Generally, they are:

      • You must observe the suspect removing the item(s) from the shelf or counter.

      • You must be able to identify the item(s); i.e., CD, cassette, etc.

      • You must observe the suspect concealing the item(s) and know where it is concealed; i.e., pants, purse, bag, etc.

      • You must maintain constant visual observation of the suspect, as they may put the item back or dump it elsewhere in the store.

      • The suspect must pass the point-of-sale and clearly be exiting the store so that the intent to leave without making payment for the product can be proven.

 

      There is no definitive set of instructions on how to apprehend a shoplifter. 

Always be polite and courteous. Ask:

 

      • “Do you need help?”

      • “Will you be paying for your purchase with cash, check or charge? ”

      •  “May I hold your selection at the register while you continue to shop?”

      • “Can I help you find another selection?”

     

      In dealing with those individuals who have met the elements of your local shoplifting statutes:

 

      • Be professional.

      • Alert management immediately.

      • Contact local police.  Do not act as the police yourself.

      • Remember personal safety is more important than recovery of merchandise.

 

Shrink Link Programs

 

      These programs are designed to “get the word out” on retail theft.  Here’s how they work:

      A retailer experiences or becomes aware of an incident involving a professional thief.  A reporting form is completed noting all pertinent details on the thieves. That report is either phoned or FAXed to his headquarters or other stores in the area for quick dissemination. 

      While they are competitors, many retailers have banded together to form local shrink link networks to combat the theft problem.  There are many instances in which losses have been prevented because they have telephoned each other after becoming aware of a particular situation.  Obviously, it could be to your store’s advantage to stay in touch with your fellow retailers on these matters.

       

       The average thief will get away with approximately $874 in a bank robbery.  But the individual who defrauds a bank, on average, will realize a theft of five times that amount.  So it goes with retail stores.  With proper procedures, however, a store can minimize its losses in this area.

 You May Have A Fraudulent Credit Card Fraud If... 

      • The name on the credit card doesn’t match the one on the person’s drivers license.

      • The signature on the credit card does not match the signature on the draft or the person’s drivers license.

      • The credit card has expired.

      • The signature on the back of the card has been erased or altered.

      • The embossed raised letters on the card appear to be altered or flattened out.  This is done with a hot iron.

      • The card is cut, bent or partially mutilated.

      • The credit card has an overall washed out or faded appearance.

      • The person presents a note or letter of approval to use the card.  These cannot be used legally to recover losses if they are fraudulent.

      • Putting the card through your verification system results in a “declined” or “special notification” message.  The bank with which you have your merchant account will advise you of the proper steps to take in these situations.

 

You May Have A Fraudulent Bank Check If...

 

      • You receive an unpersonalized check without a pre-printed name or address.

      •  The name on the check does not match the name of the person who is attempting to use it (by comparing drivers license and at least one other form of identification). 

      • Your state requires photo drivers licenses and the person writing the check is not the same person pictured on the license.

      • Pen alterations or markings cover the bank account number on the check.

      • Eraser markings on the check — watch for faded paper, smudged or feathered ink, bleach stains.

      • There is no bank name, address or identification number in the upper right corner.

      • The person pre- or post-dates the check.

      • The dollar amount appears altered.

 

You May Have A Fraudulent Travelers Check If...

 

      • The second signature does not match the first (original) signature or the appropriate identification (drivers license, passport, state I.D. etc.)

      • The check is not pre-signed as required by the issuing bank.

      • The denomination is not in United States dollars (Pounds  Sterling, Pesos, etc.).

 

      Always have a manager approve any charge or check over a predetermined amount.  The manager should also verify the identification and signatures and note the race, date of birth and social security number of the person.   Do not merely “rubber stamp” the process.   By following these procedures, the use of fraudulent or stolen credit cards and checks can be prevented.

      If at any time you suspect your store has been a victim of credit card, bank check or travelers check fraud, contact the police.  Have all information readily available that will help identify and apprehend the thief.

  

 

      Counterfeiting is one of the oldest crimes in history.  Although it has been substantially curtailed since the establishment of the Secret Service in 1865, this crime continues to represent a source of financial loss to retailers.

      Modern photographic and printing devices have made the production of counterfeit money relatively easy.  In addition, recent innovations in office copiers have given rise to the so called “casual counterfeiter.” 

      You can help guard against the threat from counterfeiters by becoming more familiar with U.S. money.  (See the samples supplied by the Department of the Treasury by visiting their Website at www.ustreas.gov/usss/money_detect.htm).

      Most counterfeit denominations are $20, $50 and $100 bills.  They are usually found at the bank after deposits have already been made.  When the bank finds a counterfeit bill, the store’s account is debited for that amount.  Depending on your company’s policy, when accepting a $20, $50, or $100 bill look for an unusually small purchase. 

If so, visually examine the bill.  If it appears in any way irregular, notify management.  If a person asks you to break a $20, $50 or $100 bill, politely tell them you cannot give change for larger bills.  If they are insistent, let management to handle the situation.

 

You Probably Have A Counterfeit Bill If...

 

      • The overall bill seems very dark, with sections faded and torn or ragged edges.

      • The ink  is cracked, faded or discolored.

      • The person’s face does not correspond with the denomination of the bill.

      • The portrait depicted on the bill appears lifeless and flat; features are undefined.  Details merge into the background which is often too dark.

      • Federal Reserve and Treasury Seals have uneven, blunt or broken saw-tooth points.

      • Border lines in the outer margin and scrollwork may be blurred and indistinct.

      • The bill feels like regular paper.  Actual Treasury bills are made of cotton fiber with no watermarks and tiny red and blue fibers embedded throughout.

      • Serial number differs in color or shade of ink from the Treasury seal.  Also, the numbers may not be uniformly spaced or aligned.

      • Numerals from a high denomination are glued onto the corners of a note of lower denomination.

  

 

      Short change artists will attempt to make a small purchase with a large denomination.  As the change is being counted out, they will try to distract the employee in order to obtain more money than what should be returned.  Their success depends on the confusion they can create in your mind at that moment.  The whole process takes no more than 30 seconds to one minute.

      A sure sign of a short change artist is an individual who attempts to distract you by requesting a change in denominations even as you are counting the change.

 

Ways To Combat The Short Change Artist

 

      • Only have one transaction at a register at a time.

      • Take notice of any purchase paid for with large bills that will require a large amount of change.

      • If someone pays with a large bill, say it out loud to confirm it both in your mind and your customer’s mind — “paying with a $50 bill?”

      • Lay the customer’s bill on top of the till until you have made change.  Then put it in the register.

      • After making the change, close the cash register immediately.  If this customer wants different denominations, you may or may not want to accommodate him. 

         If you do, take your time and count it out again.

      • Never hesitate to call another employee if you are in doubt.  This is especially true for extremely large bills requiring a lot of change.

 

 

     

      Till tap artists also attempt to distract store personnel, hoping the attention is drawn away from the cash register.  They will then reach across the counter and pull whatever money they can out of the register.  They may work alone or in pairs.  They may spill coins on the floor, knock over counter displays or even attempt to have you turn your back for an item behind the counter.  Then they make their move.  Professional till tap artists are fast.

 

Ways To Combat The Till Tap Artist

 

      • During busy times, never leave the cash register(s) unattended.

      • If  the register is unattended, it should be locked and the key should not be accessible by a customer.

      • Close your register after every transaction.

      • In the event of a distraction, call for help from another employee to handle the transaction.

  

 

      Price tag switching isn’t as much of a concern as it once was.  But thieves will still attempt to switch tags on merchandise.  Here are a few hints to help you:

 

      • Everyone in the store should know the merchandise, including price markups and specially-discounted items.

      • The store should maintain one method in markups and markdowns.  Any deviation should be cross-checked.

      • Have an index by the register of prices of all items in the store.

      • Don’t mark any prices by hand.  It’s much easier to duplicate and fool another employee.

      • Most customers are honest; however, check to be sure.

 

 

      As retailers compete in the marketplace, one merchandising tool is a liberal return policy.  While such a policy is good for business, it should be tempered with some guidelines to insure the return is legitimate.

     

      • Have a customer complete a form with identifying information such as name, address, phone number, reason for return, etc.  Identify the product being returned.

      • If the package appears to have been unopened, visually inspect the shrink wrap to insure it is intact.  Inspect the glue on the package to be certain it is intact.

      • If the merchandise has not been accompanied by a receipt, consider issuing a store credit only and not cash.

      • If the item has been opened, visually inspect the merchandise inside the packaging.  This should be done in front of the customer.  Be certain the title inside is what is on the outside of the packaging. There have been instances of blocks of wood inside CD boxes and empty shells inside of videocassette boxes.

 

How To Spot Fraudulent Audio Product

 

      A customer may return an illegally-duplicated recording, and the retailer ends up with a worthless piece of product.  These recordings are often sold at flea markets, swap meets and by street vendors at prices far below the manufacturer’s suggested retail price.  Although cassettes still dominate, counterfeit CDs are now found as well.  Experience will help you determine if a product is legitimate. 

      There are two types of fraudulent recordings: bootlegs and pirated or counterfeit recordings.  Bootlegging refers to the unauthorized recording of a performance broadcast on radio or television.  Sometimes these are referred to as “underground recordings.”  Counterfeiting is the unauthorized duplication not only of the sound, but also of the original artwork, label, trademark and packaging of legitimate recordings.  A pirated recording may be a compilation of recordings that have never been released in the same combination on a legitimate recording.

 

      Here are the warning signs of a pirated recording:

       • Packaging and graphics do not resemble the legitimate commercial version

      • Printing on the insert/information card in a cassette is often blurred with poor color separations.

      • Ink on the cassette cartridge label is blurred or misaligned.  The label may be typed or glued on.

      • Cassette box is mostly black with no logo.

      • Sound quality is inferior.

 

      If you suspect you have received illicit records or tapes, contact the Recording Industry Association of America at (202)775-0101.

 

How To Spot Fraudulent Video Product

 

      First off, examine videos prior to making them available for rental or sale to determine whether they are illegal reproductions.  To limit receiving illegal videos on return from rental, visually examine each one returned.  If the factory label has been peeled off, steamed off of the original or switched with a blank tape with no label, notify management immediately.  Customers will realize if you visually examine the returned videos that you will be aware of any alterations.  Incidents have been reported where the spool has been replaced entirely.  This method is easily detected because the plastic guards over the screws that hold the plastic together have to be removed in order to remove the spool.

       If you have any questions, contact either the Motion Picture Association of America (MPAA) at 1-800-NO-COPYS.

 

 

      • Customer tries to return fewer movies than were originally rented.

      • Customer falsely states videos are defective to avoid paying rental fees.

      • Customer switches the labels.

      • Customer steals tapes outright from the check-out counter or display.

      • Customer provides false information on video rental agreement.