48 minute read
aCaDEMIC VIEWPOINT
NrSS Article: “Business Expense”
by Richard C. Hollinger, Ph.D.
dr. hollinger is a professor in the department of Criminology, Law, and society at the university of Florida, Gainesville. he is also director of the security research Project, which annually conducts the national retail security survey (www.crim.ufl.edu/srp/srp.htm). dr. hollinger can be reached at rhollin@ufl.edu or 352-392-1025 x217. © 2011 richard C. hollinger
The National Retail Security Survey (NRSS) has been conducted by the University of Florida since 1991. This study is an excellent example of a mutually beneficial research relationship between the academic and business worlds.
Without conflict of interest or bias, we have been collecting and analyzing data provided anonymously by retail loss prevention executives from the top 100 firms. For nearly two decades the NRSS Final Report, now published on-line, has been a bellwether study that focuses primarily on average shrinkage levels, sources of retail loss, and the use of various loss prevention countermeasures.
Both the retail LP community and the university directly benefit from this type of applied research intended to help address a problem of significant financial magnitude and theoretical interest to both communities. Each year I have summarized the major findings from the previous year’s research in my column in LossPrevention magazine. This year I will provide these results in a slightly different manner.
The University of Florida publishes a magazine quarterly called Explore that features various research activities among hundreds of faculty members in various disciplines. In the Fall 2010 issue the editor of Explore, Joe Kays, chose to feature the findings of the 2009 National Retail Security Survey and my role in this research. Rather than repeat these numbers in an executive summary in this column, instead, I encourage each of you to go to the Explore magazine website and read the story titled “Business Expense.” Not only is the full article provided, but you will also find a PDF file to print out, along with a slide show of related photos that were taken in our local Sears store.
The photo shoot accompanying this article is the result of permission and cooperation provided by Bill Titus and Scott Glenn of the Sears Holdings loss prevention team. They gave me and the photographers from Explore full access to the store, merchandise, management staff, and much of the loss prevention technology available. These photos really help to convey the serious nature of shrinkage, organized retail crime, and loss prevention, making the story much more real to the reader. I want to express my thanks to the Sears Holdings LP team for the opportunity to use this store as the setting for this article.
I encourage all of you to go to the following URL to read this most interesting story about what we all have dedicated our careers to—namely, providing asset protection in order to reduce the serious levels of shrinkage and crime in the retail store. www.research.ufl.edu/publications/explore/current/story_5/
If you still have not yet read the 2009 NRSS Final Report, please send me an email at rhollin@ufl.edu, and I will send you the URL link and password. I also want to remind all of the senior LP directors and vice presidents reading this column that data collection for the 2010 NRSS will begin soon after your year-end final inventories have been completed at the end of January. Watch your email in-boxes for the new questionnaire arriving soon.
Using Technology and Training to Impact Financial Success
A Conversation with Food City’s Joe Fryar
By James Lee, Executive Editor
EDITOR’S NOTE: Joe Fryar is the director of security and loss prevention for K-VA-T Food Stores, Inc., a supermarket chain operating 106 locations in the tri-state regions of Southeast Kentucky, Southwest Virginia, and Northeast Tennessee. Prior to his twenty-four years with K-VA-T, Fryar worked in loss prevention for Parks-Belk department stores.
Fryar holds a bachelor’s degree in criminal justice from East Tennessee State University. He has also earned the designation of certified protection professional (CPP) from ASIS International. Fryar is a member of the National Association of Chiefs of Police and the Virginia Crime Prevention Association. He also serves on the loss prevention committee for the Food Marketing Institute.
EDITOR: For our readers who are unfamiliar with Food City, would you describe the company? FRYaR: K-VA-T Food Stores, Inc., the name of our parent company, is the acronym for Kentucky, Virginia, and Tennessee, which is our geographic trade area. K-VA-T does business as Food City with 94 supermarket locations. This is the name by which we are most recognized. Our supermarket format is designed to be full service containing a bakery, deli, floral department, video department, pharmacy, and fuel centers. K-VA-T also operates twelve Super Dollar Discount Foods, which are limited-assortment stores. The company also owns a 1.1-million-square-foot distribution center located in Abingdon, Virginia. The DC also houses a bottling plant for the company’s natural spring that operates as Misty Mountain Spring Water.
EDITOR: Is the company still family owned? FRYaR: K-VA-T is a private, family-owned company. I report to the CEO/President, Steve Smith, who is the son of the company founder, Jack C. Smith. The company began back in 1955. The story goes that Mr. Smith went into a grocery store in Grundy, Virginia. Finding the lines backed up, he became frustrated with the lack of service and thought, “What this town needs is a good supermarket.” Mr. Smith, his father Curtis Smith, cousin Ernest Smith, and uncle Earl Smith got together and built their first store in Grundy. He started the company with a simple philosophy—“Run the best store in town.” That first store carried the Piggly Wiggly banner. Over the years, Mr. Smith grew the company by acquisitions of several Piggly Wiggly operations in Southwest Virginia and Eastern Kentucky, along with Quality Foods/ Food City, White Stores, Winn-Dixie, and BI-LO units in eastern Tennessee. In 1984 the company adopted the Food City banner.
EDITOR: It doesn’t often happen in retail that the top LP executive reports directly to the CEO. How did that come about? FRYaR: The reporting structure is a result of Food City’s commitment to the loss prevention department. The concept is designed to keep LP as a separate entity, as we could be involved in any area of the organization’s activities. The department was created to support all aspects of the organization with a close working relationship with our operations partners.
EDITOR: What are your responsibilities? FRYaR: I direct and coordinate all security and LP functions. This includes adding, developing, and maintaining security and loss prevention procedures. I am responsible for hiring, training, and evaluating all department personnel, directing the corporate investigations function, and managing the LP portion of our corporate educational development and training program. It is also my responsibility to research, recommend, purchase, and manage the installation of all LP technologies as well as all other LP budget and capital expenditures. My position requires open communication with all senior management and a close working relationship with human resources, information technology, legal risk, and store planning and development.
EDITOR: What kind of staff and people resources do you have? FRYaR: Our distribution center is secured by our in-house DC security team and is managed by the DC loss prevention specialist. I have four LP managers who are assigned multiple store districts. The LP managers are responsible for all security and LP activities in their assigned areas, including providing LP specialists who are responsible for the apprehension of suspected shoplifters. We also have a point-of-sale [POS] exception-monitoring team that is responsible for the managing and execution of our XBR incident-reporting software.
EDITOR: Are some of your people in uniform in certain locations? FRYaR: We have a limited number of stores where we use off-duty law enforcement officers who are required to be in full uniform. The officers’ main responsibility is to be a visual deterrence to criminal activity. These officers are hired as part-time associates and are not considered contract labor.
EDITOR: How did your loss prevention career begin? FRYaR: My career began like that of a lot of LP professionals, chasing shoplifters. While I was attending college at East Tennessee State University studying criminal justice, the CJ department was approached by the regional clothing chain Parks-Belk who was looking to hire students to work shoplifting in their stores. The chain had just made the investment in camera equipment to address a growing shoplifting problem. I was recommended by the university to fill one of these positions. After my graduation, I took a full-time position with them.
A short time later Food City launched it own LP department, which at that time was called security. I was asked to interview for an internal investigator position with them and was hired in January, 1987. When Food City acquired the White Stores in Knoxville, Tennessee, I moved to Knoxville as the LP manager for the Southern Division. In 1993 I was promoted to my current position as director.
EDITOR: So at a young age, you made the transition from what some would call traditional retailing into the food-retailing business. How did you learn the LP business in that sector? FRYaR: There was a tremendous difference between my duties at Parks-Belk of apprehending shoplifters and my new responsibilities as an investigator at Food City. The courses I had taken in college where now being put to good use. I also quickly realized that I needed a better understanding of the business end of the operation. I spent time in the stores learning how they operated. I felt to be successful I needed to understand everything from how the product is received
to the financial side of the business. I read and studied every policy-and-procedure manual in the company. I was fortunate to be with a company that was progressive and would provide me with the opportunity to attend formal training programs.
EDITOR: Are there individuals who have been particularly influential in your career? FRYaR: One of the most important mentors in my career was Jack Smith, Food City’s founder. Mr. Smith loved his people, but expected top performance. When I was promoted to director, he called me to his office, sat me down, and told me, “Let me tell you how to be successful. You hire smart people, surround yourself with them, and then stand back and let them do their job.” He said, “That sounds easy, but the last part is the hard part. You need to let them do their job. Your job is to manage.” Mr. Smith stressed that I learn everyone’s strengths and weaknesses. He said everyone has both. You build on the strengths and work on the weaknesses. Steve Smith, our current president/CEO also had a lot to do with my success. Steve taught me to look ahead for what is coming down the road. Steve stressed that as a leader, you need to manage today’s issues, but not get consumed by them. You must keep your eyes focused on the horizon and look at what is developing next month, next year, and five years in the future. I apply this philosophy when I research and/or plan future activities for our organization, including purchasing new technology.
Jesse Lewis, our COO, has also been a big influence in my life. Jesse taught me that you can work with compassion. He once said that “Nobody should be surprised when they lose their job.” When you think about it, that is a deep insight. If your company culture is one of expected honesty, and you are getting that message out and it is understood, a person caught in a dishonest act will know and expect the outcome. The same rule applies to all areas of your organization.
EDITOR: What do you see as the challenges of running a major loss prevention program within a big company? FRYaR: One constant challenge is keeping your associates focused on the big picture. By the very nature of what we do, there will always be fires to put out. The challenge is to monitor what you are doing daily to make sure that your priority does not revert back to only putting out fires. You must be proactive and remain focused on long-term goals.
As an LP professional your biggest successes are not the number of cases, but the prevention of incidents before they occur. Some LP folks discuss the huge dollar value of apprehensions and the numbers of criminals they have caught each year. This is a culture that is hard to change. If you are proactive, your case value should be declining. Every case should be reverse engineered to determine the break down that created the incident as well as a method for preventing or reducing the loss should a similar incident occur. Big dollar cases are a direct hit to the profitability of an organization and should be used to learn from.
One constant challenge is keeping your associates focused on the big picture. By the very nature of what we do, there will always be fires to put out. The challenge is to monitor what you are doing daily to make sure that your priority does not revert back to only putting out fires. You must be proactive and remain focused on long-term goals.
Prevention is our goal. It has been said that you cannot catch your way to low shrink numbers. Our path involves training and awareness. We spend a lot of energy making sure every associate understands our policy and procedures. The best tool you have in protecting your assets is a well-educated associate.
Technology is advancing in our field. Some of the technology is really nothing new, but a remake of something already on the market. As the lead LP executive you must be knowledgeable of loss prevention products and tools. The responsibility of filtering through and evaluating new technology falls directly on your shoulders. You must determine if this investment would obtain a true ROI.
EDITOR: What are the backbone initiatives of your LP program and the objectives you are trying to accomplish? FRYaR: Prevention is our goal. It has been said that you cannot catch your way to low shrink numbers. Our path involves training and awareness. We spend a lot of energy making sure every associate understands our policy and procedures. The best tool you have in protecting your assets is a well-educated associate.
Our loss prevention department is data-driven. A lot of our shrink information comes from automated resources that present accurate profit-and-loss numbers. We use our systems to alert us to shrink activity. Our goal is to catch a problem in its early stage before a large loss is incurred. A lot of time is spent analyzing data looking for loss trends.
Our core programs circulate around CCTV. We use CCTV and remote site viewing to monitor stores for performance and adherence to company policy and in store audits.
As with any department, to be successful you must implement the basics, which includes POS monitoring; CCTV; physical security such as locks, keys, alarms; access control; and case management software.
EDITOR: Can you talk about your approaches to training and educational programs within Food City? FRYaR: The first loss prevention training materials I developed consisted of the common book or manual format. The message was there, but the method of delivery was not the best. Manuals disappear and signature sheets to assure the materials are read are easily lost. Keeping up with associate position changes to assure everyone received the training for their position was almost impossible. It could be said that we were meeting our training needs, but I felt the associates were not getting our message. When our training department received software and equipment to do computer-based training [CBT], I was the first in line.
Our CBT goal was to develop programs that were both interesting and informative. Programs were developed for various positions within the store. Different modules where developed to meet different needs. The subject matter in the CBT courses includes everything from the purpose of our POS reporting software to the apprehension of a shoplifter. The training modules are now automatically assigned to an associate as they are slotted into a position. The compliance of the training modules is monitored by the training department.
I also wanted to get away from the pamphlet-type awareness program and develop something more modern. So we created an electronic department news page. The news page features a main article every month appropriate to the time of year or some national news event. It also contains a section called “Case-Closed Files,” which shows actual video footage of cases with a brief summary of the incident and the outcome. The faces are blurred using a software editing package. We also like to include a humor section where we will show video clips of humorous criminal activity or dumb-crook news.
We developed a loss prevention orientation video that is viewed by every new associate. The video was taped in one of our stores. Our CEO kicks off the video to show his support for our loss prevention program. The orientation video deals with our policy on theft, types of theft, robbery, and technology we use in LP. We invited local law enforcement to participate in the robbery section for realism.
EDITOR: What additional training methods do you use? FRYaR: We certify associates to work certain positions. The certifications assure us that the associate is properly trained to execute the duties of the position.
EDITOR: What positions require a certification? FRYaR: We have a certification process for store opening and closing personnel who have not completed a store management training module. The certification goes over the basic knowledge to manage a store
FOOD CITY
continued from page 32
in the absence of a manager and safely open a store in the morning and close it at night. The associate is tested to assure they understand the process.
The back door receiver position also requires certification. Anyone receiving product through the direct store delivery process has to pass this certification so they understand the policy and procedure for receiving product.
When Food City started installing self-checkouts, the company had a concern with theft from customers at the units, so we developed a training course to certify all associates monitoring the self-checkouts.
EDITOR: Earlier you mentioned that your core programs center on CCTV. Talk a little more about that. FRYaR: A lot of thought and pre-planning occurs before we install a CCTV system. When cameras are installed, every camera has a primary and a secondary view. The camera locations are plotted using CAD software. We know what percent of the floor space is covered by the cameras as well as any blind spots. These plans are kept on file should the need arise.
Our CCTV is tied into our POS exception-reporting software. When an exception occurs, we have a link on the exception-reporting software that goes directly to the video. This allows us to remotely review the incident.
Our LP managers have the ability to view the stores’ CCTV system by remote site viewing. This includes live and archived video. This makes the investigation process more productive and efficient as the majority of the investigation can take place at their office. Travel time for investigations has been reduced dramatically. If we have an incident and we need the ID of a suspect, we will log into the system and pull the needed photo and email the photo to law enforcement agencies or additional stores as needed. This has proven very beneficial in organized retail crime incidents.
Our check recovery department also uses CCTV to identify fraudulent check suspects. This is accomplished remotely. Alerts with photos attached are sent out to the store managers.
The auditing department uses remote site viewing in the execution of their auditing processes. Again, this saves travel time and you have a more accurate view of the store activities.
Our store planning and development team uses the CCTV system to check the progress of store remodels and upgrades.
The risk management department will pull the archived video on slip-and-fall cases that occur in the stores. Today, our CEO can look at a store from his office. District managers can look at stores. If they get a customer complaint, instead of calling the store, they can pull up the store on their laptop and look at the incident themselves before responding to the customer.
EDITOR: What camera technology you are using? FRYaR: We are currently installing IP camera systems. We use 1.3-megapixel cameras inside the stores and 5-megapixel cameras in the parking lot. There are three main types of IP camera compression technologies, MJPEG, MPEG-4, and H.264. Each has its benefits, but we use H.264 cameras whenever possible as the network traffic is less with this type of compression technology. Our CCTV servers are built in-house by our IT department. With the IT department’s purchasing power, we have been able to bring our server cost down. The video management software [VMS] is purchased and then installed by the IT department, which coordinates the physical equipment installation. The final system programming is completed over the network from our corporate headquarters.
EDITOR: How long have you had IP technology in your stores? FRYaR: We are going on our fourth year. The whole process was a learning experience. My original concern was that bandwidth requirements would overload our network. I approached the IT department for their assistance, to have them involved from the beginning of the project. IT installed cameras in their lab and completed tests on the network to see if any problems would occur before a store installation. When I discussed the use of the IP camera technology with our CEO, I already had the cooperation of the IT department and the answers to the technical questions.
EDITOR: I hear from your peers that you are a strong proponent of IP technology? FRYaR: I am a big proponent of IP camera technology. I did a presentation at FMI [Food Marketing Institute] a few years ago speaking about the implementation of IP camera technology from an end users perspective. CCTV in its simplest form has two main functions—to monitor live video and to retrieve archive video for an incident. If an incident occurs, the clarity of the video can be the difference between a successful resolution or the incident remaining unsolved. The increase in video quality has been very beneficial in the resolution of cases. For example, one of our stores experienced an armed robbery. The suspect wore a ski mask and no clear description of the face could be obtained. However, the suspect had a tattoo on their forearm that was identifiable because of the increase video resolution. This piece of evidence became critical in the apprehension and prosecution in this case.
IP technology is evolving at a rapid pace. Our CCTV server can be upgraded as new technology emerges, plus cameras are capable of firmware upgrades. Video analytics that are geared to the retail sector are becoming a reality. New possibilities arise daily with this type of technology.
EDITOR: You briefly mentioned organized retail crime. Is ORC an issue for Food City? FRYaR: Definitely. Our geographic trade area puts us where major interstates merge or pass through. Our stores are located in the traffic patterns of ORC gangs as they travel from state to state. We also have a second group that we label as “local ORC.” The local ORC groups are individuals who live in the area where they practice their trade. They fence merchandise locally or use the Internet to sell their stolen goods.
EDITOR: What changes in ORC have you seen over the past few years? FRYaR: Over the last ten years I have noticed an increase in ORC. The individuals involved in ORC have become more
FOOD CITY
continued from page 34
sophisticated. We are seeing surveillance techniques being used by ORC groups. The ORC rings are now using cell phones to communicate the locations and movements of the store’s LP specialists. ORC rings have a better understanding of the rules of apprehension that LP departments must operate under and use this knowledge to their advantage.
As ORC has grown and become more active, so has the awareness and collaboration between law enforcement agencies and retail establishments. The word is getting out that this is not a typical shoplifting issue. The awareness campaigns from the retail sector have taken hold at the local, state, and federal levels. ORC has become recognized for what it is—organized crime. We are now being contacted by law enforcement agencies for assistance when they are working an ORC ring.
EDITOR: Do you use particular product-protection technologies or techniques for hot products that are targeted by ORC? FRYaR: We strive to locate an ORC problem at it earliest stages. As ORC activity takes hold in a store, we want to locate that target store as soon as possible. We use our software systems to track movement, looking for discrepancies in purchases verses sales. We also have a concentrated list of items that we track. This list has been compiled from ORC apprehensions. At the end of every month, we compile a list of all items recovered from all shoplifting apprehensions looking for common items. All of this activity is tracked in our incident management software. Items that are designated as high theft are handled and merchandised differently. We are always looking for new technology to address this issue.
EDITOR: Imagine for a moment an 18-year-old person working part-time for Food City stocking shelves comes up to you and says, “Mr. Fryar, someday I would like to have your job. How do I get there?” What do you tell him? FRYaR: To succeed in today’s loss prevention world, first you must have complete honesty and integrity. You should pursue a college education and continually obtain certifications in the loss prevention field. You need a diverse background with a mix of operations and loss prevention. And find a company who understands the benefit of having a strong loss prevention department.
EDITOR: After twenty-four years, when you walk into a Food City store, what do you consider your biggest accomplishment? FRYaR: When I walk into a store it is good to know that the policies and procedures, as well as the loss prevention techniques and technologies that I have implemented have played a significant part in the financial success and stability of the company.
All of us at Palmer, Reifler & Associates wish you and your family a happy, healthy and prosperous 2011.
Attorney Offices: ORLANDO Client Service offices: ATLANTA | CHICAGO | DALLAS | LOS ANGELES | LONDON | TORONTO
Toll-Free in the U.S.: 866.875.6565
P A L M E R R E I F L E R . C O M
Can you believe it is 2011 already? we at eBay certainly
hope you and your families had a joyous holiday season, and we wish you a prosperous new year.
In the past we’ve utilized this space to update you on eBay’s initiatives to help tackle the stolen goods and organized retail crime issues facing the industry. we are proud of the progress we’ve made and look forward to continuing to work with our retail partners and the nrF, Jsa, and FmI to find long-term solutions to these challenges. with the holiday shopping season behind us, we thought this would be a good time to introduce and define the roles of the core teams and key people within eBay’s global asset protection organization, above and beyond the ProaCt team. as our partners in loss prevention work with us in 2011, we want everyone to be familiar with the eBay teams driving our trust and safety efforts. we recognize the importance of a good supporting cast with flexibility, technical capability, and strong experience that can approach challenges from all directions. at eBay we’re fortunate to have a group of dedicated professionals whose contributions support the brand objective of “driving retail Like trust.” eBay created the global asset protection (GaP) team last year to centralize our worldwide investigative function and improve the lines of communication among our trust and safety personnel around the globe. the GaP group is led by Jack Christin, a former prosecutor and assistant attorney general, with responsibility over three operating disciplines—data, analytics, and tools; regulatory and policy management; and investigations.
The global data, analytics, and tools team conducts
in-depth analysis of our site data and produces formalized analytical reports on fraud trends, bad buyer experiences, and other key performance indicators supporting our proactive predictive models. additionally, this team is responsible for the development of internal tools utilized by asset protection and other members of the legal team, inclusive of those supporting our shift towards leveraging automation, including Law enforcement Portal (LeP) and our newly released global Law enforcement erequest system (Lers).
The regulatory and policy group maintains a
comprehensive global list of practices, including the prohibited and restricted item policies. the team works with regulatory bodies to ensure our policies are in compliance with applicable laws. they also coordinate and guide customer service functions in managing our system’s filters, rules, and policies.
The investigations team led by Paul Jones is focused on protecting the business assets, user community, and brand reputation. From a geographic perspective the team has presence in san Jose, salt Lake City, Philadelphia, shanghai, sydney, and dublin. we incorporate a dynamic foundation of data mining, highly sophisticated technological resources, advanced linkage technology, forensic analysis, and internally built exception reporting. these resources assist with upstream detection and risk identification, allowing us to take appropriate action related to suspected criminal activity, including engaging law enforcement to prosecute offenders. recoveries of losses are pursued through aggressive restitution efforts. we worked with experts in interrogation techniques from wicklander & Zulawski associates to create a specialized training module with an emphasis on phone interviewing techniques. we have already begun to see a return on this personnel development investment.
John mearls is senior manager, Global asset Protection. Contact him at jmearls@ebay.com. At eBay we recognize the importance of a good supporting cast with flexibility, technical capability, and strong experience that can approach challenges from all directions.
The fraud investigations team (FIt) has primary
responsibility for satisfying law enforcement and regulatory requests for user information. the FIt team satisfied more than 100,000 requests last year. we recently introduced automated technology that allows law enforcement to obtain data supporting criminal investigations. this automation provides significant opportunity to redeploy eBay’s internal talent and transition the team towards a more proactive investigation model.
The special investigations group (sIG) specializes in
conducting international high-level and sensitive investigations with an emphasis on serious financial crimes, including money laundering and bank fraud. most members of the sIG team have completed the highly distinguished certified fraud examiner (CFe) program. these professionals conduct forensic analysis, detect and resolve phishing scams, Id theft, stolen financial data, counterfeiting, child pornography, and denial-of-service attempts. they’re regularly invited to participate at the federal level and at banking regulatory conferences. as with any large, global team with an extensive remit, we have experienced some growing pains. ultimately, we believe that our team is structured to achieve our key objectives—provide exceptional customer experiences; collaborate with our retail and law enforcement partners; and develop the best tools and technologies to identify and eliminate bad actors before they can impact our platform. we look forward to continuing to evolve our overall efforts, strong industry partnerships as well as growing our talented asset protection team. have a great 2011.
While I am beginning my twenty-ninth year of retail LP leadership, the LPC helped me benchmark my skills against the best in class to ensure that I am providing my company and team members what they deserve by my leadership and knowledge.
After the word filtered out to our field team that I had successfully completed the LPC program, I received numerous phone calls and
“I have a job. Why do I need certification?”
Certification not only prepares you for the future, it helps you when you need it most—in your current job. Certification refreshes and validates your knowledge base while teaching you critical business expertise to round-out your skill set. It not only covers key components of loss prevention, it teaches you solid business skills to prepare you for your next promotion.
“It costs a lot.” Certification is very affordable and can even be paid for in installments. It is one of the best investments you can make for yourself and will pay for itself over again as you advance in your career. “I don’t have the time.” Certification was designed by seasoned professionals who understand the demands on your time. The coursework allows you to work at your own pace and at your convenience. Everyone is busy, but those who are committed to advancement will find the time to invest in learning.
“I’ve never taken an online course.”
The certification coursework is designed with the adult learner in mind. The online courses are built in easy-to-use presentation style enhanced with video illustrations to elevate comprehension and heighten retention. “What if I fail?” Both the LPQ and LPC certifications have been accepted for college credit at highly respected universities, and as such, passing the exam demands commitment and study. However, the coursework includes highly effective study and review tools to fully prepare you for the exam. In the event you fail the exam, you can review the coursework and retest after 30 days.
It’s easy to get started. Go online to sign up at www.LossPreventionFoundation.org. If you need help or want more information, contact Kelly Durham at Kelly.DurhamLossPreventionFoundation.org or call 866-433-5545.
notes describing the motivation this gave them to continue their own learning I had not realized until then, just how powerful it is to see a leader model the way.
Recently, the LPQ and LPC certifications were added to our tuition reimbursement program in HR, which was personally fulfilling as it validated the effort and time I spent learning the materials as well as helps others in our organization who will be continuing their educations.
feature
Law EnforcEmEnt and rEtaiL PartnErshiPs
Working Together for Common goals
By Millie Kresevich
Following is an example of a successful partnership between retail loss prevention and local law enforcement that resulted in the dismantling of an organized retail crime (ORC) operation in one Florida county. While the details are specific to this particular investigation, what is important to the loss prevention industry is that ORC is not just a discussion inside retail. Law enforcement is, in fact, interested in working with loss prevention organizations to proactively prevent crime in our stores and the communities we both serve.
Preparing for an ORC Blitz
As 2010 progressed, organized retail crime activity in Florida was high, resulting in significant losses for Luxottica Retail. Therefore, we decided to do a blitz in Florida to try to halt the losses. As usual practice, we sent invitations to other retailers to join us on this quest to identify and address ORC-related incidents. Macy’s ORC manager, John Morris, accepted the invitation to work with us.
Our second step was to solicit help from law enforcement. Our initial calls seemed to generate interest, however no commitments were reached. Time was passing quickly, and we simply couldn’t get the commitments we needed to secure a safe event.
With only four days before the scheduled blitz, a call was made to a neighboring county to ask for suggestions on how to move forward with the blitz if we were not able to gain the necessary law enforcement assistance. That call was specifically made to Sergeant James Ostojic of the Polk County Sheriff’s Office.
Loss prevention professionals may remember Sergeant Ostojic and the Polk County Sheriff’s Office from 2008 when their investigation of a shoplifting incident led to the identification of a multimillion-dollar retail theft ring and fencing operation. At the conclusion of that investigation, eighteen people were arrested and charged with felonies. Later that year, the Florida Retail Federation honored Sergeant Ostojic as the Retail Officer of the Year.
The 2008 investigation gave the Polk County Sheriff’s Office much notoriety in the ORC arena and paved the way for how retailers and law enforcement can work together to make great things happen. In recent years Polk County has consistently helped retailers fight the battle against property crimes and ORC. Therefore, it was no surprise that Sergeant Ostojic immediately stepped up to the plate and extended his hand to help with our pending blitz.
The first request Sergeant Ostojic asked was to move some or the entire blitz into Polk County, which would give Polk County jurisdiction should any criminal situation be encountered. We met this request and immediately began discussing the specifics of how to coordinate the efforts of both the retailers and law enforcement.
Sergeant Ostojic took the plan up the chain of command starting with his immediate supervisor, Captain Andy Ray. Captain Ray in turn received the approval from Sheriff Grady Judd who gave the go ahead to gather how ever many officers would be necessary to carry out the blitz.
Sergeant Ostojic hand-selected each officer who would be involved by what they had to offer. In addition to the Polk County Sheriff’s Office, officers were recruited from the Winter Haven Police Department, Lake Wales Police Department, and Lakeland Police Department. In total eight officers would participate in the blitz with Sergeant Ostojic supervising the law enforcement contingent.
All the planning and organizing occurred very rapidly over a two-day period. A formal operating plan was generated and delivered to both retailers and law enforcement personnel. Sergeant Ostojic conducted an ORC training session for all participants and assigned each officer to specific duties.
The day before the blitz was scheduled, Captain Ray asked to have dinner with the retailers in order to meet and talk with them. It was an enlightening conversation. Captain Ray was clearly excited about the blitz and that the Sheriff’s County Office was playing a pivotal role.
The following day a meeting was held to review the plan one last time with everyone involved. At this meeting, participants were partnered to include at least one officer for every retailer, locations were assigned, and everyone went their separate ways.
Launching the Blitz
The first day one arrest was made, retail property was recovered, and an individual was charged with possession of marijuana and narcotic paraphernalia. While this may have seemed like a disappointing start, it turned out to be just a warm up session for day two.
Day two began with two arrests at a higher end department store. A third arrest at another department store nabbed a female suspect who provided critical information for an ongoing police investigation in Polk County. That suspect decided to cooperate and provided information into other crimes that were occurring in
Participants in the orC blitz included (from left) Millie Kresevich, Matt Michel, and Mark Flores of Luxottica; Det. Stephanie burcham of the Lakeland Police Department; and Sgt. Jim ostojic, Dep. eliss Mitchell, Dep. andres Marin, and Det. Joseph Makal of the Polk County Sheriff’s office. not shown is John Morris of Macy’s.
surrounding areas. This is an example of how dealing with retail crime can lead to information regarding other crimes.
The grand finale came near the end of day two when the blitz activities concluded by gathering the evidence that led to the destruction of a large fencing operation located in Winter Haven, Florida.
It was about 4:30 p.m. on Thursday. The participating loss prevention manager from Macy’s mentions that he has video of a suspect who comes into their store routinely and shoplifts high-dollar gift sets of men’s and women’s cologne. The suspect had not been apprehended thus far because he was in and out of the store very quickly.
A second piece of intelligence provided is that the suspect often comes in with another male. Almost on cue, not twenty minutes after revealing this information, the suspected cologne thief is seen standing outside the doors of Macy’s. While he isn’t entering the store, he clearly is interested in something going on inside.
Sergeant Ostojic is watching him closely, and I am in the interior of the store. The cologne thief begins to head toward his vehicle when his partner, who was already in the store, exits with a stolen pair of sunglasses in hand from Sunglass Hut. The product is not concealed, just carried out by the accomplice. Once the accomplice reaches the vehicle, both men are approached by officers and asked to step out of the vehicle. The sunglasses are recovered with the tag still affixed.
Each suspect is placed into a separate room to be interviewed. The accomplice is completely uncooperative and will not provide any information. The cologne thief, however, decides to cooperate. He tells Sergeant Ostojic and me that the merchandise he steals is sold at a beverage store in Winter Haven. The suspect alleges a female drug dealer who makes a living from selling drugs as well as stealing and selling retail property introduced him to this store. According to the suspect’s information, once employees of the beverage store purchase the product, it is then sent overseas.
The cologne thief, now turned informant, is asked if he would be willing to go to the beverage store with an officer, represent product as stolen, and sell it to the individuals he has been dealing with. With his willing participation, the wheels of motion are put in place. Within a matter of two hours, the entire sting is orchestrated.
Macy’s provides two gift boxes of men’s and women’s cologne for the sting. Additional police officers from Winter Haven are brought aboard. An officer and the informant are dropped off in front of the beverage store. The pair walk into the beverage store, ask the person on the other side of the counter if they want to buy the merchandise they just stole, and the transaction takes place. The individual purchasing the stolen goods give the officer and informant $20 for items worth almost $200.
While the transaction takes place inside, a car pulls up in front of the beverage store with what appear to be rectangular boxes. As the individuals from the car exit the car with the boxes, they notice the police cars surrounding the store. They immediately jump back into the car and speed away…in reverse.
The person who purchased the stolen goods is arrested and taken into custody. Drugs, stolen property, and pornography are found in the store.
The Law Enforcement Perspective
This blitz represents a great example of fantastic police work in partnership with retail loss prevention. Every step was handled meticulously, efficiently, and achieved a final result that was “one up” on the bad guys.
Taking down the fence in these sorts of operations is key. If we can’t stop who is buying the product, there will always be the desire to continue stealing it. It becomes much more difficult to unload retail property once the main fencing operation is eliminated in a certain area.
Speaking from the loss prevention perspective, we can’t thank Polk County enough for their efforts and diligence in helping retailers in their jurisdiction remove a significant piece of the ORC puzzle. While ORC is often discussed among loss prevention professionals, it is important to hear the following perspectives on ORC from key members of the Polk County Sheriff’s Office [starting on page 44].
Sergeant James Ostojic
When you received the call about retailers needing help with the Blitz in Florida, what made you extend your hand so quickly?
The Polk County Sheriff’s office has a proactive approach on crime and assisting in the blitz reinforces this philosophy. over the past several years, i have been involved in several major organized retail crime cases. Similar cases usually begin with something like a shoplifting case then expand to a larger organized investigation. Teamwork and coordination are essential as well as timeliness and accuracy for law enforcement and loss prevention personnel during an operation of this magnitude.
Why is the retail partnership important to you and your job?
My job is to proactively prevent crime. Shoplifters continue to educate themselves on new and innovative ways to commit criminal acts. Many times the items they steal are used in other crimes. also, as these types of crimes escalate, they often lead to more violent crimes. our partnership is beneficial to get information that may help lead to solving these types of crimes. it is important from a consumer perspective to remember the loss of profit for the companies and loss of tax revenues. our job requires us to educate consumers, company employees, and the community at large to be on the lookout for any unusual activity. every aspect of the retail partnership is beneficial to me, my job, the businesses, and the community.
What can retailers do better to assist law enforcement in combating ORC?
retailers should be consistent in holding shoplifters accountable for their actions. For example, a trespass warning may not stop the criminal activity. incarceration will immediately stop the individual from continuing the crime spree. incarceration many times deters future criminal acts. retailers can also assist by providing accurate video surveillance with updated equipment to produce the best identification of the offenders. you should continue to monitor the activities of orC groups and keep the information flowing to law enforcement. Keep in mind, the information provided must be timely and accurate with detailed accounts of each incident involving the same groups to help with prosecution.
How can law enforcement gain better understanding of the intricate workings of the criminal enterprise through the interview process?
The interview process often leads to information to solve other crimes. it is imperative that a good, solid interview be conducted with each victim, witness, and suspect in every case. This will ensure we are able to evaluate trends and determine if a larger group is involved and their intricate workings. This is important for law enforcement when trying to infiltrate an organized crime group. Many of the criminal activities have wide-spread criminal operations and are often multi-jurisdictional. often the interview process will lead to a better understanding of the depth of the operation and give us information that is critical to solving the crime as well as identifying leaders in the organization. The better the interview, the easier it is to confirm the information to lead to the arrest of criminal enterprise.
Captain Andy Ray
You gave the go ahead for law enforcement participation in the Blitz very quickly, why is that?
because we have been successful in preventing and controlling crime through our proactive efforts, usually based on our data-driven policing model we refer to as “ProCaP,” which stands for Proactive Community attack on Problems. We find that those criminals who commit crimes like burglaries and grand thefts in the community are just as likely to commit other criminal acts, including retail theft, whether as an individual or as a participant in a larger organized group. basically, people who aren’t afraid to commit a felony are just as unafraid to commit a misdemeanor. by arresting individuals involved in retail crime, we are making it clear that we’re serious about crime control in our county, we’re reinforcing that we are paying attention, and we may very likely arrest a criminal before he has the opportunity to commit another crime. basically, it’s what we do every day, and this is just another opportunity for us to further interrupt criminal activity.
You took the time to meet the retailers who were involved in the blitz. You also showed up to the blitz to see how things were going and have conversations with those who were apprehended. Why was this important to you?
i see this as an opportunity to meet stakeholders in our community—those being the store managers and loss prevention specialists—and to demonstrate our interest in what’s taking place in the local retail stores. it is also an opportunity to relay to those involved in criminal activity that we take the problem seriously and that their criminality will earn them a ride to jail, rather than just a notice to appear in court. We feel like in order for there to be a deterrent to retail crime, there has to be an immediate consequence that’s not very appealing to them.
Polk County along with several other surrounding police departments provided many officers to work as undercovers during the blitz.
ORC BliTz
continued from page 44
How would you encourage other police departments to participate in a blitz and provide resources to retailers?
First, i have to mention that the municipal police agencies and the sheriff’s office work very well together in Polk County. We don’t have turf issues, and we help each other out. it is very much a team approach. i would simply offer that the people who are stealing items from retailers are, in many cases, the same people that are breaking into cars or homes and committing other crimes. by focusing on the retail crimes and arresting those offenders, there is a good chance that other crimes in the community will be prevented. additionally, by working with the orC task force, we are trying to interrupt the groups of criminals who are profiting by stealing large quantities of retail goods. Those thefts create monetary losses for retailers and generally increase the costs for law abiding consumers in the marketplace. Their criminal activity affects everyone.
From a big-picture perspective, how does dealing with ORCrelated issues open the door to gain information regarding other crimes?
arrestees who all of a sudden find themselves in a “pinch” are more likely to want to work themselves out of it. if they’re involved in organized retail theft and want to provide information in order to help themselves out, we will listen to them. now, we won’t offer to let them go on the charge they were just arrested for; they will still have to face the consequences for their actions. on occasion, however, if the information they provide is helpful in solving other crimes, we will share with the prosecutor’s office that the individual provided assistance to us on another case. This may or may not result in less severe sanctions in court.
This blitz was a perfect example. The efforts of the orC task force and local law enforcement resulted in the identification of a local fence for stolen merchandise. That led to an undercover operation led by the Winter Haven Police Department that resulted in the arrest of a person operating a local convenience store for dealing in stolen property, as well as other charges, including illicit drug charges.
Sheriff Grady Judd
The Polk County Sheriff’s Office is looked at as a leader in combating ORC. Can you share a brief synopsis of the county’s voyage on becoming a recognizable advocate for combating ORC?
The Polk County Sheriff’s office’s experience with orC began a few years ago with what initially appeared to be a single individual stealing merchandise from a retail store. However, as the investigation continued, the detective was able to learn that the suspect was part of a larger organized retail crime ring that was mostly involved in the theft of health and beauty products. as more details were uncovered, the scope of the organized theft ring was revealed. Detectives were assigned full-time to investigate this band of thieves in order to gather enough information on their illegal activities and the identities of the suspects to bring about a successful prosecution. after months of investigation and consultations with our local state attorney and the assistant statewide prosecutor from the Florida attorney general’s office, we were able to secure arrest warrants for the members of this group, charging them under the state’s racketeer influenced and Corrupt organization act (riCo) laws. These statutes are designed for just such an operation and are designed to enhance penalties for the violation of statutes by an organized group of criminals.
Within months of closing that investigation, deputies discovered another organized group of thieves who were stealing baby formula from retailers. again, detectives were assigned to this case on a full-time basis in order to connect the dots between the bosses and the thieves in this organization. after a couple of months of gathering important intelligence and evidence, multiple arrest warrants were secured and the suspects involved in that organized retail theft ring were arrested. because we know there is a continuing problem with simple retail theft and a significant problem with organized retail theft, we are committed to doing what it takes, locally, to provide a deterrent.
How much time is devoted to property and retail crimes in your county?
a significant amount of time and effort is devoted to the prevention and investigation of property and retail crimes in Polk County. We have thirty-six detectives who are assigned to the general Crimes units in our patrol districts. Those full-time detectives are responsible for the investigation of property crimes, including organized retail crimes, and felony person’s crimes. However, about 85 percent of their time is dedicated to property crimes. if you break that down, that means that we commit some 60,000 hours per year to the prevention and investigation of property crimes.
Many of your deputies are very well versed on ORCrelated crimes. Can you explain the training or education process that takes place?
our detectives are chosen from experienced patrol personnel and receive four weeks of additional training specific to property crimes. They are instructed and trained by experienced property crimes detectives. our deputies and detectives who are most knowledgeable in
maximize Cash Flow
Deposit Accuracy
Traceability
Integrated Cash Management
CSS treaSury SerIeS ProvIdeS CaSh management eFFICIenCIeS
• Increase visibility and “anytime reporting” – remote access management and immediate view of cash flow, with detail reports for accountability audits • Employee self-service – increase cash management productivity with direct, authenticated and traceable employee deposits • Remote management – remote access management and support for software rollouts, updates, setup control and data retrieval or upload • P.O.S. and back office integration – track the flow of cash to the transaction level
to move ahead
to learn more about products that can take your operations to a new level, please contact a CSS representative today at (800) 342-3033 x333 or visit us at www.remotecashcapture.net.
Security » Innovation » Service
ORC BliTz
continued from page 46 orC issues because they have been assigned to investigate the cases as previously mentioned. They have real-world experience and on-the-job training, initially. i am blessed because i have tremendous talent here at the Polk County Sheriff’s office, and the members of this agency learn quickly. additionally, those detectives with experience investigating these crimes share their knowledge with other deputies and detectives to increase their understanding of the breadth of the orC problem.
What do you envision as movement in the right direction for law enforcement and retailer partnerships in the future?
of course, the people on the front lines of the retail theft and organized retail crime problem are the men and women working directly for retailers in loss prevention positions. The retailers follow their profitand-loss margins closely, and they know the trends that are occurring in their individual stores and in their markets.
Formulation of strong partnerships between the retailers and local law enforcement is essential so that when trends are identifiable, that information can be shared in a timely manner so that the two can work together to address those trends in a proactive fashion. again, this recent blitz is a great example. Trends were identified locally by retail LP and brought to our attention. Deputies and officers in plainclothes worked with members of the orC task force inside local stores over a two-day period. Those efforts resulted in multiple arrests and the identification and arrest of a local business operator who was buying stolen merchandise and then reselling it for his own profit. This success story underscores the importance of a strong partnership.
MILLIE KRESEVICH is senior manager of asset protection at Luxottica. She has over sixteen years of experience in big-box, corporate, and specialty loss prevention. Kresevich holds an associate degree in criminal justice and a bachelor degree, summa cum laude, in social psychology. She is active in the industry, including sitting on the legislative committee for the National Retail Federation and serving as legislative chair for the Coalition of Law Enforcement and Retail. Kresevich is a member of a nationwide Organized Retail Crime Task Force and has contributed to the development of certification programs for the Loss Prevention Foundation. In 2008 she was a recipient of the 20 under 40 Security Executive award. She can be reached at 513-765-6000 extension 27517 or mfilipov@luxotticaretail.com.
