More from the Retail Fraud 08 conference in London on May 1.
Plamen Hristov, the asset protection manager for Polo Ralph Lauren at the upmarket fashion chain’s London stores, told of how handbags with a price tags of thousands of pounds have been secured.
The Bulgarian has worked in the UK since 1990, previously for HMV. One example he gave was of perfumes: should they be on open display – or locked cabinets? If locked, the goods would be more secure against theft, but customers by being unable to touch and feel the product might not be as willing to buy. Hristov went into more detail about ladies’ handbags, which might retail for £5000. These are on open display, so that customers can see in a mirror how the bag looks with clothing. But this brings a risk of theft that is, he admitted, a ‘nightmare’ from the loss prevention point of view. The answer was to contact the vendor, and come up with a device that, if the product goes more than 10 feet from its display, sends an alert to the CCTV room. A camera automatically will pan and tilt to the origin. Also in use in some stores are electronic article surveillance; security gates and shutters; exception based reporting; and loss prevention posters for staff. Stores are divided into three by risk. Hristov spoke of applying the Pareto 80-20 principle, which simply put proposes that 80 per cent of stores cause 20pc of your problems, and vice versa; so you concentrate on the 20pc of stores with most problems. To return to the handbags, much of the loss was due to a notorious West End gang that would snatch merchandise and make a quick get-away on scooters. The retailer was careful to come up with security that satisfied the brand and the ‘creatives’, who want the shop display just so. Polo Ralph Lauren worked with London SE16-based Vigil Security, whose joint MDs are Bill Mortimer (ex-M&S) and John Goldsworthy (who was the consultancy Goldfield Electronics).
A dashboard approach to presenting fraud data – for loss prevention staff and others in the business – was outlined by Richard Grant, head of European loss prevention and fraud, Carphone Warehouse.
The early days of loss prevention assessment for the mobile phone retailer, Richard Grant recalled, was reports written by hand, and faxed to head office. Next came spreadsheets, which still took time to collect. Now things are web-based. Among the features are an onscreen dashboard – a plain, visual way to show loss prevention and others in the company, such as sales, how things stand. The next step is to integrate the system with the sales management information system, to the commercial side of the business can better understand risks. Before this bespoke software, made and hosted by consultancy Oris Group, the profit protection staff did have data mining, but not a product that could be used across the group. The web product is available in the seven languages and four currencies handled by the company. The hub is a ‘margin erosion dashboard’. A super-user can remove and change key performance indicators – different countries may have different ones, as markets are different, and change. It’s real time, Richard Grant stressed; you can drill down to employee and individual transaction. He said: "It’s great, having something which tells you what is going on across the group; but what we discovered was fundamentally important was that specific users had dashboards which mattered to them." That is, loss prevention people in the field would not necessarily be interested in the same data as area sales managers, or sales directors. Hence customised dashboards. There might be ten, or 20 KPIs; but a sales area might only concentrate on the five, highest-risk KPIs. Operations managers can design dashboards that they want their staff to see, as they may know their area better than head office.
Talking of the web, several speakers covered online fraud. Take the Royal Mail, for example: it sells things at branches around the country; through call centres; and on its website. In retail speak, different channels. Paul Donald, speaking with Tim Sparrow of software firm CyberSource, admitted it was quite a challenge. Paul Donald said: "I think it is essential that you do try and centralise. One of the benefits is that you get people communicating; you can have reviews of what data you are getting."
At a branch, the staff behind the counter can ask for a customer’s proof of identity; and simply get a feel for a person. In a separate talk, a convicted fraudster Elliot Castro, interviewed by Dave Pope, marketing director of 192.com, did speak of how he was caught after a member of staff at Harvey Nichols had suspicions when he bought gift cards; and he was detained on his return to the store to spend the cards. As for tackling frauds online, Paul Donald agreed that you should not put all your (anti-fraud) eggs in one (technology) basket. Nor should you think that once you install software to check against fraud, you can leave it alone. Identities can morph for various reasons. If a call centre worker mistypes a name, anti-fraud software could flag that as an attempted fraud. Or; a fraudster is passing around a stolen credit card and using your name for the payment card. If you set the checks too tight, you may reject good customers. Tim Sparrow of CyberSource spoke of a balancing act, depending partly on the goods you are selling (how valuable are they?) and the profit margin you are seeking (how much fraud are you willing to risk, as long as the orders keep coming through?). Both men spoke of the merits of having a central point for your information to decide whether an online buyer is genuine or a fraud – in the jargon, a ‘centralised decision management platform’. No one software tool will give you 100 per cent accuracy. Rather, you should centralise your blacklist – addresses that you know have been given by fraudsters – charge-backs, and manual reviewers of orders. From that central point comes the decision to fulfil or terminate the order, and add that to your database.
