Might more robust civil recovery be called for in the recession? was among the points raised at the recent Retail Fraud conference and exhibition in west London.
Geoffrey Northcott and Greg Saputo went through the UK and US history of civil recovery respectively. Northcott, the former Head of Loss Prevention at book chain Borders UK, recalled a case of a handler of stolen travel guides, where victims were awarded more than £300,000 in damages. This was a first; an award against a second-tier criminal rather than the original shoplifters. Take out such handlers of stolen goods, he said, and you take out one or two dozen thieves, who have nowhere else to go. Civil recovery in the UK began, he recalled, with Prof Joshua Bamfield in 1998 – who was chairing the speakers. Northcott argued that civil recovery – going after shop thieves in the civil courts, to retrieve costs, rather than leave it to criminal courts – has stagnated, and it’s time to re-visit it. UK schemes are based on letters and about 30 per cent of people chased, pay. The US, where processors can make phone calls to find offenders, has 40 to 50 per cent recovery. Many UK retailers have dabbled with civil recovery, Geoffrey Northcott said, but have felt its cost and trouble out-weighed the low returns. Earlier speakers included Steve Hearn of Jaeger, on data mining at the clothing retailer; and Adrian Beck of the University of Leicester, asking why we have become obsessed with technology as the answer to shrinkage. Listen to the issues, rather than try to get the problem to fit the technology, he suggested.
Who was there
Loss and security people attending included Chris Taylor, group head of security at AS Watson (the Savers health and beauty chain); Katie Ellis, online fraud analyst, Debenhams Direct; Leigh Jacobs, analyst, Easyjet; Mike Marshall, group head of security, Shop Direct; Christian Featherstone, UK and Ireland loss prevention manager, IKEA; Phil Wilson, national crime and investigations manager, Sainsbury’s; Colin Culleton, head of security at HMV; Tim Clark, Boots security manager; and Bryn Curtis, group loss prevention manager, DSG.
ID thefts
After lunch, Prof Bamfield queried whether identity theft is as bad as you might think. He spoke of alarmist media and ‘bogus surveys’ that might exaggerate what is admittedly a problem – though not as bad, he suggested, as car crime, or burglary.
Tag team
Paul Burlace of Republic went through how the clothing retailer altered its product tagging. Previously, the retail chain was finding tagging at point of delivery and de-tagging at point of sale labour-intensive. A pair of jeans might have to up to a dozen tags; staff were not reacting to an alarm. Instead the retailer has come up with a cheaper tag, branded, so that if clothes are stolen, they can be more easily recovered in a search. They are placed on garments – typically, a £150 jacket – to be highly visible. While it may seem obstrusive, to Paul Burlace it did say in effect to the opportunist thief, ‘do not steal me’. The retailer has found a reduction in tag-damaged stock. A store’s ops staff only have to put one tag on an item. Paul Burlace said: “When I was a store manager, tagging, de-tagging, absolutely did my head in. Managers now have faith in the tag, and they are also reducing their loss and reducing time dealing with offenders.”
Update
Michael Foligno gave an update on the Peacocks clothes chain, where he is Head of Loss Prevention. Before he joined in 2006, the chain had little, and ad hoc, investment in LP. He began by looking at where the retailer stood, and what was needed. Support from the company board has included spending on equipment – which is seeing results, he reported – and a place in the firm’s retail strategy, namely the part ‘protect your profits’. It means store managers and staff are expected to use security equipment, and to keep stock loss action plans – that is, staff should do more than pin it on a noticeboard. Installed have been tagging; and digital CCTV in some, high-risk stores. A system – a minimum of 16 cameras – has overt cameras on the shop floor, and in staff areas. That means better-protected staff: “We are having fewer incidents reported; we are not responding on an ad hoc basis any longer.” Referring to the earlier talk by Paul Burlace, Michael Foligno spoke of a problem with product tags being removed by detaching devices, available on websites such as ebay. Hence new tags, through the estate, which has ‘vastly reduced’ opportunist theft, though professional, more determined thieves are still there.
New name
Tim Edwards of sports clothing chain JD Sports described a re-structure of the loss prevention team, now called the investigations team. JD has moved somewhat away from uniformed guards. Throughout the stores are hard disk CCTV recorders, on a VPN IP network. Using existing distribution security staff, the retailer has made a control room and switched all alarms on to the VPN IP network. This allows the retailer to quickly recognise camera faults, as all CCTV is programmed to report faults remotely. “We have greatly reduced unnecessary engineer call-outs,” Tim Edwards said. The retailer has visual verification of alarms, to satisfy police rules on alarm response, and only 0.47 per cent of alarms are policed, he said. An example of dual verification is an alarm triggered by a ram raid, and CCTV footage comes to the control room. Tim Edwards showed an example, of offenders at the back of a site, significantly wearing hoods to avoid being identified on cameras. In such cases, the control room can tell police who to look for, and the likely escape routes of intruders. While some in private security have spoken against Google Maps as a tool for thieves and demonstrators to scout, Tim Edwards spoke of such online maps as useful for an alarm receiving centre. The control room is also able to avoid call-outs of key-holders and alarm engineers, where CCTV shows an alarm is only due to a human setting error. One frustration has been the number of tag alarm calls; JD is converting its tagging to IP. After their talks, asked if the recession means more buy-in to loss prevention by their boards, Michael Foligno answered: “I don’t think there was an issue with us spending money on tackling the problem; we just needed to make sure we were spending the money with the right products.” And Tim Edwards said: “I have always enjoyed the support of the board; now even more.” Foligno stressed that most staff are good; but, as with other retailers, some are not.
Carphone dashboard
Justin Firlotte, loss prevention man at The Carphone Warehouse talked the audience through the web-based data mining tool, including a Margin Erosion Dashboard. Justin went into loss from store management. The mobile phone retailer has 2400 stores in nine countries, including 800 in the UK and 95 in the Republic of Ireland. The retailer has to work with several languages, and currencies; various risks, for instance to do with returns and discounting; and risks can change very quickly. So it’s felt important to target the key risks. Or as Justin Firlotte put it: “It’s very easy for things to get lost in translation.” Hence the wish to benchmark loss, to make people accountable; but any software would have to be easy for managers to use. Hence the ‘dashboard’, developed over two years with consultants ORIS Group. Like a car dashboard, it keeps shrinkage and risk key performance indicators (KPIs – the UK has 14) at eye level. The retailer can benchmark then against sales margin. A user of the dashboard on logging in can drill down according to his user type; a branch manager can drill down to staff in his store; Justin can look at area and store managers. So a store user looking at transactions can get to the nitty-gritty, such as: why is that member of staff dealing with more returned products?! Similarly, a loss prevention person can see how each stores in his area are doing, and know which ones to work with most. You can export data into Microsoft Excel spreadsheets. You can send tasks to a user of the system; the user gets an email to say the task is waiting for them. The trial in the UK is complete and the plan is to roll the product out this year and next to about 1000 UK users. Also planned is integration into standard operating procedures; and and to add operational KPIs into the UK dashboard. This way, a retail store manager can see online what are his loss problems, whereas otherwise that manager would have to wait to hear from a visiting loss prevention person. Here will come accountability.
Fashion forum
The Retail Loss Prevention Fashion Forum first met in 2006. It seeks to bring like-minded LP heads together to share views, and lobby for the sector. Forum chair Richard Lawrance, head of audit and loss prevention at Monsoon; and vice-chair Mitch Haynes, head of security for Aurora Fashions (high street names such as Coast and Oasis) described how they meet about four times a year. A couple of issues they have taken up are punishment (or lack of) for shoplifters – hence a meeting with Labour MP and Government whip Claire Ward – and what websites are doing (or not) about stolen stock being sold through them – hence a meeting at ebay head office. Also significant: the forum notes that members spend money on town and city centre retail crime reduction partnerships, typically for shop radios. But are partnerships good value?
Crete to Croydon
As if to answer that, the next speaker was Alan McWilliams. The former Army and community safety man was living in Crete when he got a call to apply for a job with Croydon BID (Business Improvement District). He joined the south London BID in April 2008 as business crime reduction manager. As in other BIDs, mainly in town and city centres, though some may be in edge of town retail and business parks, the BID – if businesses vote yes – takes money from all in the area. The advantage: a BID can then buy services such as wardens or extra cleaning, whatever members want. If the city merely had a crime reduction partnership, it would rely on the good will of donors, and yet the businesses that did not fork out would reap the same benefits as those public-spirited enough to pay. So: Croydon like other BIDs has paid towards a town centre team of police officers (not wishing to have community support officers). It runs among other things a Childsafe armband scheme, whereby a child if lost can go into a store to ask for help. A Cabsafe scheme seeks to get rid of unlicensed cabs. Pubwatch is being extended to fast food restaurants, and anyone else in the night-time economy. Travelwatch covering the buses and trams has a similar aim; to exclude offenders, in the hope that offenders will change their behaviour.
