July - August 2018 by Loss Prevention Magazine

JULY–AUGUST 2018 | V17.4 LOSSPREVENTIONMEDIA.COM

LOSS PREVENTION MAGAZINE THE AUTHORITY ON ALL THINGS ASSET PROTECTION

SAFELY INTO THE NIGHT LP SUCCESS STORIES SHOW THWARTING THIEVES AFTER HOURS TAKES MANY FORMS

REFLECTING ON THE EVOLUTION OF RETAIL SECURITY WITH PAUL JONES THE WORLDWIDE IMPACT OF SHRINK BASED ON THE GLOBAL SHRINK INDEX WOMEN OF LOSS PREVENTION: LP LEADERSHIP REACTS AND RESPONDS

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TABLE OF CONTENTS 6 EDITOR’S LETTER

Bob MacLea Scholarships to Fund LP Certifications

By Jack Trlica

Safely into the Night

10 RETAIL SPONSORS 12 INTERVIEWING

Life Is Like a Circle: Part Three

LP success stories show thwarting thieves after hours takes many forms

By David E. Zulawski, CFI, CFE and Shane G. Sturman, CFI, CPP

24 CERTIFICATION

By Garett Seivold, Contributing Writer

Stepping Up Your Game as an LP Professional Interview with Lucas Moeller, LPC, Lowe’s

26 LPM EXCELLENCE

LPM “Magpie” Award: Applauding Excellence

Reflecting on the Evolution of Retail Security

Featuring Jim Carr, CFI, CCIP, and Chris Duke, LPC

35 FUTURE OF LP

The Blurring Lines between ORC and Cyber Crime

The world of loss prevention according to Paul Jones

By Tom Meehan, CFI

36 EVIDENCE-BASED LP

By James Lee, LPC, Executive Editor

Deterring Determined Offenders By Read Hayes, PhD, CPP

46 PERSPECTIVES

Stepping Outside of What’s Considered Safe

Interview with Jorge Nazer

56 ASK THE EXPERT

The Worldwide Impact of Shrink

Five Tips to Mitigate Retail Physical Security Threats Interview with Ken Kuehler

57 SOLUTIONS SHOWCASE

Global retail survey compares the drivers of shrink in the US versus the rest of the world

- Instakey

59 LPM DIGITAL

By Meg Costa

Facing Crises

By Kelsey Seidler

61 PRODUCT SHOWCASE 62 CALENDAR 63 PEOPLE ON THE MOVE 64 ADVERTISERS 64 SUBSCRIPTION FORM 65 VENDOR SPONSORS 66 PARTING WORDS

Women of Loss Prevention LP leadership reacts and responds

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By Jacque Brittain, LPC, Editorial Director

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EDITOR’S LETTER

Bob MacLea Scholarships to Fund LP Certifications

he loss prevention industry is a generous one. Individuals and companies give of their time and money to support a wide array of charities and causes to better the communities they serve. Over the years, organized events associated with annual meetings or conferences have generated donations to organizations like the National Center for Missing and Exploited Children, the Make-A-Wish Foundation, and many other worthy causes. This year, the generosity turned inward. Dating back to the ’90s, a golf tournament has been associated with the National Retail Federation’s annual loss prevention conference. The sponsoring organization has changed a couple of times over the year as companies come and go. This year, the Loss Prevention Foundation (LPF) took charge of the event. As most everyone in the industry knows, the foundation is a not-for-profit organization whose primary mission is providing education and certification for loss prevention professionals. Launched in 2006, the organization built two certification programs—the LPQualified for entry-level loss prevention associates that provides a baseline introduction to the business of retail LP and the LPCertified program for more experienced LP professionals that offers an in-depth look at the retail enterprise and the many associated areas of expertise necessary for career advancement into management roles. To date, over 2,000 individuals have taken the

online coursework and passed the exams to now have LPQ or LPC after their names. In keeping with their mission to educate our industry, the LPF board of directors decided that the dollars raised at this fund-raising event would be used to fund scholarships for worthy loss prevention associates who wanted to continue their educations and advance their careers. Thus, the Swing for Certification golf tournament was born.

On Sunday June 10th preceding the Monday start of the NRF PROTECT conference in Dallas, over 120 LP retail practitioners and solution partners assembled in the 98-degree Texas heat for a day of networking and fun. Thanks to the generosity of the participants and over twenty corporate sponsors, the event raised over $35,000 that will fund more than fifty scholarships—designated the Bob MacLea Scholarships in remembrance of the recently deceased TJX executive who

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contributed much to his company as well as the industry. Another $5,000 was raised for the foundation’s Loss Prevention Benevolent Fund (LPBF) that provides critical relief to help support colleagues and their families in times of exceptional need, such as injury or death in the line of duty. In addition, $7,000 was donated to the USS Foundation, the legacy sponsor of the golf tournament. “On behalf of everyone at the Loss Prevention Foundation, we want to thank all of the guests that participated in this tremendous event and especially our generous sponsors that were so instrumental in making our vision for this day a reality,” said Terry Sullivan, LPC, president of the foundation. “We’re very excited for the many opportunities that these Bob MacLea Scholarships will provide to the loss prevention community and the support that our efforts can bring to those in need through the LPBF.” Now that the scholarships have been funded, it’s up to those loss prevention professionals who strive to continue their educations and advance their careers to take advantage of this opportunity. Individuals may apply for a Bob MacLea Scholarship by going to the website yourLPF.org.

Jack Trlica Managing Editor

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EDITORIAL BOARD Charles Bernard Group Vice President, Asset Protection and Comprehensive Loss, Walgreens Erik Buttlar Vice President, Asset Protection, Best Buy Jim Carr, CFI, CCIP Senior Director, Global Asset Protection, Rent-A-Center Ray Cloud Senior Vice President, Loss Prevention, Ross Stores Francis D’Addario, CPP, CFE Emeritus Faculty Member, Strategic Influence and Innovation, Security Executive Council Charles Delgado, LPC Regional Vice President, Store Operations, Academy Sports Scott Draher, LPC Vice President, Loss Prevention, Safety, and Operations, Lowe’s Scott Glenn, JD, LPC Vice President, Asset Protection, The Home Depot Barry Grant Chief Operating Officer, Photos Unlimited Bill Heine Senior Director, Global Security, Brinker International Frank Johns, LPC Chairman, The Loss Prevention Foundation Paul Jones, LPC Director, Asset Protection and Risk Management, CKE Restaurants Holdings Mike Lamb, LPC Vice President, Asset Protection, The Kroger Co.

David Lund, LPC Vice President, Loss Prevention, DICK’S Sporting Goods John Matas, CFE, CFCI Vice President, Asset Protection, Investigations, Fraud, & ORC, Macy’s Chris McDonald Senior Vice President, Loss Prevention, Compass Group NA Randy Meadows Senior Vice President, Loss Prevention, Kohl’s Melissa Mitchell, CFI Director, Asset Protection and Retail Supply Chain, LifeWay Christian Stores Joe Schrauder Vice President, Asset Protection, Walmart Stores Tina Sellers, LPC Director, Asset Protection, Retail Business Services LLC, an Ahold-Delhaize Company Hank Siemers, CFI Vice President, Global Retail Security, Tiffany & Co. Quinby Squire Vice President, Asset Analytics and Insights, CVS Health Mark Stinde, LPC Vice President, Asset Protection, 7-Eleven Paul Stone, CFE, LPC VP Security, Goodwill Industries of SE Wisconsin Pamela Velose Vice President, Asset Protection, Belk Keith White, LPC Senior Vice President, Loss Prevention and Corporate Administration, Gap Inc.

Loss Prevention, LP Magazine, LP Magazine Europe, LPM, and LPM Online are service marks owned by the publishers and their use is restricted. All editorial content is copyrighted. No article may be reproduced by any means without expressed, written permission from the publisher. Reprints or PDF versions of articles are available by contacting the publisher. Statements of fact or opinion are the responsibility of the authors and do not necessarily represent the opinion of the publishers. Advertising in the publication does not imply endorsement by the publishers. The editor reserves the right to accept or reject any article or advertisement.

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LOSS PREVENTION MAGAZINE 700 Matthews Mint Hill Rd, Ste C Matthews, NC 28105 704-365-5226 office, 704-365-1026 fax MANAGING EDITOR Jack Trlica JackT@LPportal.com EXECUTIVE EDITOR James Lee, LPC JimL@LPportal.com EDITORIAL DIRECTOR Jacque Brittain, LPC JacB@LPportal.com MANAGING EDITOR, DIGITAL Kelsey Seidler KelseyS@LPportal.com CONTRIBUTING WRITERS Adrian Beck Read Hayes, PhD, CPP Tom Meehan, CFI Walter Palmer, CFI, CPP, CFE Colin Peacock Maurizio P. Scrofani, CCSP, LPC Garett Seivold Shane G. Sturman, CFI, CPP Bill Turner, LPC David E. Zulawski, CFI, CFE CHIEF OPERATING OFFICER Kevin McMenimen, LPC KevinM@LPportal.com DIRECTOR OF DIGITAL OPERATIONS John Selevitch JohnS@LPportal.com SPECIAL PROJECTS MANAGERS Justin Kemp, LPQ Karen Rondeau DESIGN & PRODUCTION SPARK Publications info@SPARKpublications.com CREATIVE DIRECTOR Larry Preslar ADVERTISING MANAGER Ben Skidmore 972-587-9064 office, 972-692-8138 fax BenS@LPportal.com SUBSCRIPTION SERVICES

NEW OR CHANGE OF ADDRESS LPMsubscription.com or circulation@LPportal.com POSTMASTER Send change of address forms to Loss Prevention Magazine P.O. Box 92558 Long Beach, CA 90809-2558 Loss Prevention aka LP Magazine aka LPM (USPS 000-710) is published bimonthly by Loss Prevention Magazine, Inc., 700 Matthews Mint Hill Rd, Ste C, Matthews, NC 28105. Print subscriptions are available free to qualified loss prevention and associated professionals in the U.S. and Canada at LPMsubscription.com. The publisher reserves the right to determine qualification standards. International print subscriptions are available for $99 per year payable in U.S. funds at circulation@LPportal.com. For questions about subscriptions, contact circulation@LPportal.com or call 888-881-5861. Periodicals postage paid at Matthews, NC, and additional mailing offices.

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INTERVIEWING

Life Is Like a Circle: Part Three

by David E. Zulawski, CFI, CFE and Shane G. Sturman, CFI, CPP

n part one of this series, we talked about organizing the harassment investigation based on the complaint, the individual who made the outcry, and company policy. We also addressed the order in which interviews should be conducted and the importance of a complete and thorough conversation with the complainant. This is a time for the complainant to do the majority of the talking, while the interviewer spends most of his time listening for facts, biases, and assumptions. Once the complete story has been related, it is only then that the interviewer uses probing questions to enhance the level of details of the story. In part two of the series, we addressed the confidentiality of the investigation, its timeliness, and the preservation of evidence. Then we went on to discuss the strategy and preparation to begin the interviews with the victim, witnesses, and alleged harasser. In this article, we will focus on the actual interview process and how it differs between the parties involved. The interviews themselves help the investigator establish the facts, potential witnesses, and evidence that may corroborate the different parties’ statements.

The Complainant

The first interview to be conducted is a thorough conversation with the complainant. The complainant may or may not be the victim—it could also be another individual who

This may be an emotional time for the victim as they struggle with anger, shame, uncertainty, or any other number of emotions. The interviewer needs to be supportive, and one of the best ways to do this is to be a good, nonjudgmental, empathetic listener. 12

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Zulawski and Sturman are executives in the investigative and training firm of Wicklander-Zulawski & Associates (w-z.com). Zulawski is a senior partner, and Sturman is president. Sturman is also a member of ASIS International’s Retail Loss Prevention Council. They can be reached at 800-222-7789 or via email at dzulawski@w-z.com and ssturman@w-z.com.

heard the victim’s outcry. Victims, for any number of reasons, may be reluctant to make a complaint against another employee or a supervisor. However, once the complaint has been made, it must be investigated in a timely manner. If the individual who heard the victim’s outcry comes forward, he or she should be carefully debriefed in great detail not only focusing on the statements made by the victim but also examining the victim’s demeanor and relevant facts concerning the work environment. This interview generally begins with rapport building between the interviewer and subject before asking the open-ended question, “Tell me in as much detail as you can, what happened?” This interview should also ultimately provide a context for the investigation relating to the personalities and general environment of the workplace. Without a context for the event, the investigator in future interviews may not ask the right questions or may make erroneous assumptions about day-to-day events. If the complainant is the victim, the interviewer should start after establishing rapport with an open-ended question that directly addresses the individual’s complaint. This may be an emotional time for the victim as they struggle with anger, shame, uncertainty, or any other number of emotions. The interviewer needs to be supportive, and one of the best ways to do this is to be a good, nonjudgmental, empathetic listener. Open-ended questions let the victim relive the event in their own words without contamination by the questions, biases, or assumptions that the investigator may have made or had.

The Cognitive Interview

Often the victims may have suffered a pattern of harassment, which will require the interviewer to break the interview into portions that can address each of the incidents in the pattern. One of the best ways to address this type of interview is to use a cognitive interview, which encourages the victim or witness to provide a detailed account of each event. The cognitive interview starts out with rapport building and then moves on to instructing the witness or victim on what is expected of them in the conversation. Generally, the interviewer will ask the individual to be as detailed as possible in their recollection of events reporting even the smallest details. They continued on page 14

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continued from page 12

could also be told to step into their memory remembering things that they saw, heard, felt as they went through the experience. The interviewer will also let them know that they may be asked the same question more than one time. The witness or victim should understand that asking a question multiple times is not because the interviewer doesn’t believe them, but he simply wants to encourage them to go into more detail or clarify their previous statements. The interviewer then opens the interview with an open-ended question that encourages the subject to give a narrative answer: “Tell me in as much detail as possible, what happened from beginning to end?” The interviewer should just listen to this untainted narrative from beginning to end without interruption. Once the interviewer has the subject’s untainted story, he can divide the story into sections to develop details, facts, and evidence that may support or disprove the account.

Research has shown that the Cognitive Interview helps the interviewer judge an individual’s truthfulness. The truthful individual’s story generally has a wealth of detail mixed with emotions. The interviewer now selects a portion of the story to begin further development, which is best done in a chronological order since this does not disrupt the memory but enhances recall. The interviewer asks the subject, for example, “Tell me in as much detail as possible what you saw, heard, and felt between meeting him in the hall and walking to the elevator?” The interviewer now carefully listens for additional information, facts, biases, or assumptions as the individual adds more detail to the story. As the interviewer listens to the retelling of this section, he may ask more open-ended questions to continually expand the person’s narrative. An open-ended question relating to some detail might sound like this: “Now you said he ‘seemed excited.’ Tell me more about that?” Notice that the interviewer did not add any information to the question but used a quote from the individual’s statement to ask for clarification and expansion. The interviewer continues to explore each subsequent section or incident of the victim’s story in the same way saving any closed-ended questions until the very end to avoid contaminating the person’s story. A closed-end question is asking for a specific piece of information: “When your boss said, ‘I’m going to ruin your career,’ was Janet in the room?” The closed-ended questions supplies a specific answer, not the important narrative the open-ended question achieves. Once the victim and witnesses have been interviewed, the investigator should examine each of the individual’s

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narratives against the evidence, context of the event, and statements for consistency. Research has shown that the Cognitive Interview helps the interviewer judge an individual’s truthfulness. The truthful individual’s story generally has a wealth of detail mixed with emotions. The story makes sense in its structure and has a logical portrayal of events. The deceptive story is much more likely to be bare-bones lacking in detail, illogical in nature, or told in a way that leads the interviewer away from pertinent events. At the end of the day, it will be the investigation that supports a particular individual or conclusion. There may be verifiable facts, supporting witnesses, or even in some situations recordings of the incident.

The Harasser

Usually the harasser will be the final person interviewed in the investigation. The interviewer has now had an opportunity to evaluate the victim’s and witnesses’ accounts and investigate and establish certain facts, and believes the investigation warrants an in-depth conversation with the alleged harasser. There obviously may be some variations based on whether the harasser is aware of the complaint or specific company policy or political issues to taking certain courses of action, but regardless the conversation with the alleged harasser should be a detailed inquiry into the circumstances surrounding the events. The Cognitive Interview is often an appropriate way to introduce the topics under investigation and obtain the alleged harasser’s explanations or view of the situation. Once the interviewer has a complete explanation of the situation from the alleged harasser, he can begin to use evidence or statements made from other parties that contradict the individual’s story. The interviewer obtains and carefully examines each of the subject’s responses to these contradictions locking down in detail each of his statements. The individual’s responses to the contradiction should be noted and placed within quotation marks in the interviewer’s notes and final report. Depending on company policy and the general investigative practices of the organization the deceptive subject may be confronted to obtain an admission to the allegation. The transition to an introductory statement, which discusses who the interviewer is and what he does, the types of cases investigated, and how investigations are conducted, makes a smooth transition to offering a showing of understanding of how people make errors in judgment. Using third-person stories, the interviewer offers the subject an opportunity to save face and admit his indiscretion without being subjected to ridicule. This conversational approach allows the interviewer an opportunity to understand the subject’s decision-making and feelings relating to the event. The interviewer, after obtaining the admissions to the incident, may take a witnessed written or recorded statement to document the individual’s statements. Unlike a traditional theft investigation where there may be video or solid documentation of the fraud, a harassment interview requires more detailed attention to victim and witness interviews to bring the case to a successful conclusion.

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FEATURE

SAFELY INTO THE NIGHT LP SUCCESS STORIES SHOW THWARTING THIEVES AFTER HOURS TAKES MANY FORMS By Garett Seivold, Contributing Writer

SAFELY INTO THE NIGHT

fter hearing loss prevention leaders describe recent efforts to enhance the security of their stores after closing, it becomes immediately clear that the long, delicate dance between burglars and security continues. There is change, certainly, such as in the drivers of nighttime risk, with organized gangs, the opioid crisis, ATMs, and enhanced residential security raising the threat of retail store break-ins, and in the increasing availability and affordability of tools to protect stores, including remote video surveillance, more robust locks and other physical protection, and better overnight visibility through more feature-rich alarm or access control systems. But while risk and security have both evolved, the push and pull between opposing forces seems the same as it has ever been. Burglars look for retail victims that have what they want and offer a way to get it; LP executives button up their stores enough to dissuade them within strict financial confines. This is why LP stories offer useful instruction. They indicate how retailers balance protection and budget; what LP leaders are selecting from today’s security menu; and what they’ve found useful—or not—to thwart nighttime adversaries. While any LP case study necessarily relates to a retailer’s specific threats, risk, and vulnerability, they all suggest avenues for beating overnight criminals to the punch—or at least countering their schemes more quickly and efficiently. It’s vital intelligence because in the dance to protect stores after they close, it’s better to lead than to follow.

Where Do We Stand?

Unfortunately, as an industry, retailers might currently be on their back feet. FBI data indicate that while residential homes have never been safer from burglars, the same is not true for retail stores and other commercial establishments. Perhaps as a result of the availability and popularity of Internet-connected home security technology, there was a substantial 7.1 percent drop in residential burglaries in 2016, the latest year for which law-enforcement data is available. But it’s a different story for commercial

more problematic over the last five years. In 2017, 12 percent of businesses were victims of burglary attempts, compared to 11 percent in 2012. On the ground in the US, LP executives report to LP Magazine that burglary risk ebbs and flows, often following local crime patterns. “We see the same amount year over year,” said Chris McCarrick, CFI, senior manager for asset protection solutions at Kroger. “The needle hasn’t Chris McCarrick really moved.” So the problem that burglars pose to retailers may not be substantially worse than in years’ past, report LP executives. But it certainly isn’t going away.

Let’s Get Physical

businesses, of which retail establishments have the highest burglary rates, along with office-park suites and single office buildings. In 2016, burglary of nonresidential properties, such as stores and offices, rose by a substantial 2.6 percent. Overnight burglaries increased by an even greater amount, by 6 percent, according to FBI data. The average value of losses in commercial burglaries is also growing, topping $2,500 in 2016. By comparison, a robbery of a gas station continues to offer thieves a smaller payday, falling to $970 on average. Burglary isn’t only stubborn in the US. In Britain, according to the 2018 Crime Report by the Association of Convenience Stores (ACS), burglary of convenience stores is significantly less common than robbery events, but it is more costly to the industry overall. On a per-incident basis, the average loss in burglary events is triple that of losses in robbery incidents, according to the survey of ACS members. More broadly, across all premises in the wholesale and retail sector, data from the UK Home Office’s Commercial Victimization Survey indicates that burglary has grown slightly JULY–AUGUST

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How products are merchandised in stores continues to be a major risk factor of overnight raids, according to several LP leaders interviewed by LP Magazine, including Mike Keenan, CPP, CFI, LPC, who has led LP at Macy’s, Ross, and Gap and is now president of Mike Keenan and Associates, a retail loss prevention consulting company. “It seems like a simple thing, but defense starts with not tempting people, like not putting the most expensive stuff in windows,” he said. As such, Keenan and other retail security experts believe that robust burglary prevention needs, at its foundation, for LP to understand their business and items that are most likely to entice thieves after hours. Then, LP can erect barriers between thieves and Sean Ahrens their targets, added asset protection consultant Sean Ahrens, CPP, security market group leader at AEI. “It’s been true in the past, and it’s still the case, that the goal is to delay an aggressor’s access as long as possible, ideally to the point of response,” he said. The role of enticement is highlighted in a 2014 report from the Center for the

SAFELY INTO THE NIGHT Study of Crime and Justice at Colorado State University, “Pharmacy Robbery and Burglary: The Offender Perspective.” Said one offender: “As we left [the store], I told my buddy, ‘Hey, did you see all those Lortabs on the service desk?’ He stated, ‘That’s not even the best part; they leave those pills there over night after they close.’ To myself, I said, ‘Is that right?’ So began my habit of pharmacy burglary.” Several years back, product availability was acting as a catalyst of overnight incidents at Food Lion stores, according to Joe Darnell, manager of asset protection services for retail business services at Delhaize America and its Food Lion and Hannaford brand stores. Baby formula and cigarettes were kept at service centers located at the front of Food Lion stores, sometimes unprotected and sometimes protected behind glass cases with flimsy doors. Although the items were safeguarded during the day Joe Darnell from boosters, the products were inviting targets after stores closed. “We were having a rash of breaking and enters where they’d bust out the glass at the front door and, inside of a minute, steal $5,000 worth of cigarettes,” Darnell explained. “So we had to determine a way to combat that problem.” Step one in the winning security formula employed at Food Lion stores was to shed some light on after-close security events. The LP team added relays to panels to integrate its energy management and alarm systems, so an alarm activation immediately floods the front of the store in light, in addition to subsequently triggering loud sirens and strobe lighting effects. “Some might say that we were making it easier for burglars by lighting the store for them, but our findings were that it helped attract police response and also acts as a deterrent because it lets the individuals breaking in know that they are visible.” The move helped improve suspect identification via store surveillance video and undoubtedly chased away others, but it was an incomplete solution. “They’d still

have time to hit us and get out. We had to slow them down,” explained Darnell. Using store remodels as an opportunity, with the goal of upping the effort necessary to make off with targeted merchandise, the LP team retrofitted the existing product cases with heavier doors and sourced hardened display cases when new ones were purchased. “We wanted them to have to work,” said Darnell. “One minute is a long time when there is an alarm and lights are on, and you’re still just trying to get to the product.” Ultimately, they surpassed their target goal. In internal tests—taking hammer to cases—time required to break through case doors averaged one minute and twenty seconds. “We felt like if we could slow them down, we could catch them, or they’d go somewhere else.” The measures have clearly done the trick. Food Lion stores have tracked a steep decline in break and entry, from a high of seventy-eight incidents in 2013 to just twenty in 2017. Losses have similarly dropped. The typical $5,000 in merchandise loss from break-ins five years ago is now often limited to just the cost of repairs to damaged property as thieves often give up and leave before they get at the products they’re after. The same layered physical security approach is central to after-hours protection strategy for Bill Heine, chief security officer at Brinker International,

which owns the Chili’s restaurant chain among others. The restaurants face a fair number of burglaries annually, but more than burglar alarm systems—and the increasingly sluggish response they garner—Heine relies on physical barriers to keep individuals who break in from leaving with items of value. “We create Bill Heine physical barriers inside the building that make it very difficult to get to any product that people want,” Heine explained, noting that liquor stock is locked up and that even locked food coolers are further subdivided so that expensive food items, such as high-end steaks, are behind yet another locked barrier. Floor-bolted safes and computer equipment reside safely behind several layers of protection in back offices, which include higher-end doorframes and reinforced doors that are almost impenetrable. Internal layers of security can’t be merely for show, however, as burglars will test to find weak spots or overlooked vulnerabilities, suggest comments in the “Offender Perspective” report. One burglar, on the topic of a retail store using steel cages after hours to protect its pharmacy,

Food Lion Stores Reduce Break and Entry by >300% 78%

60%

33%

29% 20%

15%

2012

2013

2014

2015

2016

2017

Source: Retail Business Services, Delhaize America

LP MAGAZINE

JULY–AUGUST 2018

SAFELY INTO THE NIGHT

Do You Have What It Takes to Prevent Store Break-ins? Insights, Opinions, and Advice LP Magazine interviewed more than one dozen retail security consultants, industry leaders, and LP executives and asked what they think about different security tools and strategies to prevent after-hours store break-ins. Their responses suggest that retailers might benefit by asking, “Are we…”:

Up and running?

“A common misconception for stores is assuming that their security system is on and working; therefore, there is no need to run maintenance tests or update the system,” warned Catherine Walsh, senior vice president and general manager of Tyco Retail Solutions.

Loud enough?

“An audible alarm is very effective. It creates an added level of anxiety for the thief,” said retail security consultant Mike Keenan. Consultant Sean Ahrens agrees, suggesting a 128-decibal horn. “It should be as loud as possible inside and also outside to add witness potential,” he said.

Bright enough?

Numerous LP executives cited quality security lighting as vital to their efforts to protect stores overnight. “Motion detector lights are also a very effective deterrent. People don’t want to be seen,” said Keenan.

Locked up?

Building hardening is important, and that has to include the roof, warned Ahrens. “I’ve seen otherwise well-protected stores with scalable roofs that provide thieves with easy access inside.” Secure rooftop skylights, ventilation shafts, air conditioning and heating ducts, and other possible entry points on the inside with grilles or grates. Those that cannot be secured should be alarmed. Ahren also advises connecting key-containing Knox boxes to the building’s alarm system, examining window wells used for emergency egress, see if there are connections to other buildings, and so on. “You need to see how everything looks through a criminal’s eyes.”

Installing to standards?

Ahrens advises retailers to have detailed specifications for alarm installations. “I’ve seen too many stores where a guy comes in, slaps an alarm on the wall, and says, ‘You’re good to go.’ Then someone breaks in and just rips it off the wall.” Consultant Pat Murphy suggested that large retailers can effectively balance risk and budget by creating a few specific alarm and camera packages to apply to different stores based on their risk profiles.

Securing evidence?

In the event of a break-in, you don’t want to find that the thief was able to destroy evidence of their crime by taking store security equipment. “You want to have that video in the cloud” or have some other solution to protect video evidence of a break-in against such tampering, advised Keenan.

Following guidelines?

“It’s not uncommon for retailers to put together great [crime prevention] programs but then not have them followed by store managers,” said Keenan. “I’m a big believer in audits.” Conducted in conjunction with other operational and compliance audits, he suggests that a quarterly security review with a mini audit in the final quarter is optimal for ensuring that a retailer’s burglary prevention is as good in the store as it looks on paper.

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said, “They pull that steel cage down over the counter; it’s really pointless. I jumped on the counter, and I removed a ceiling tile out of the way, and I just climbed up into the ceiling and dropped down to the other side. I think I left there with nine bottles of Lortabs, 500 pills each.” As a result of its hardened, layered approach to security, a typical burglar hitting a Chili’s restaurant might do $1,500 to $2,000 worth of building damage by the time they tear up a door or bust out glass, but they don’t get away with anything of real value—“maybe a few half-empty bottles of booze before running off,” said Heine. “And they usually drop half of those.” Heine thinks a lot of new security technology is great but notes that retail establishments with doors and windows are still vulnerable to a good crowbar. “It’s been my experience that creating physical barriers is ultimately more important than the burglar alarm system.” Indeed, while the latest motion detection or glass-break sensors may notify retailers of an intrusion, they aren’t much of a deterrent to a gang of smash-and-grab thieves. And as high-tech security systems become more commonplace, retailers have to expect that more thieves will simply attack facilities head on and count on quick getaways rather than trying to commit theft undetected. This summer, one of the toniest streets in the country, Rodeo Drive, provided a cautionary example. High-end retailers were hit six times over the course of two months, including a burglary crew smashing a glass wall at a Saks Fifth Avenue department store. Hoping for some assistance from the public, police released security video of one of the break-ins in late May. In it, four cars slow to a stop alongside luxury shops in the early morning hours. Crews hop out of the vehicles armed with sledgehammers and begin trying to smash their way into a store. Police said thieves gave up trying to shatter the extra-strong security glass of a Saint Laurent display window, so the gang moved next door and smashed into Zadig & Voltaire. They made off with thousands of dollars worth of clothes—disappearing less than two minutes after they started the assault.

SAFELY INTO THE NIGHT Because a lot of these gangs know they have limited time before an alarm goes out, it’s always valuable to take steps that complicate the ability to enter in the first place, advises consultant Mike Keenan. While there is always a level of force that can defeat security glass—ramming an SUV into a store front will certainly get you inside—several experts suggest hardening windows to the extent that building parameters make it possible, by taking advantage of new construction to install laminated or tempered glass for example, or adding window film to existing windows and doors. Security window film might not prevent a determined individual from gaining entry—someone with a baseball bat might be able punch around the edges of a window and push it through—but it is an easy and substantial upgrade over glass that simply shatters when someone throws a rock at it. “You want that thief to pick someplace else, and in a lot of cases that will be enough to do it,” said Keenan. Window film is cost-effective compared to installing new windows and comes

in a variety of solutions to help retailers meet a range of protection concerns, from bomb blasts to break and entry to weather events, according to Jake Oberle, US marketing supervisor for 3M Window Film & Architectural Finishes. But it is not, he warned, bullet proof. “That is one of the biggest misconceptions,” he said. “The main purpose for safety Jake Oberle and security window film is to keep the glass intact, making entry of individuals or objects harder to penetrate.” Oberle advises retailers to understand testing methods as well as performance data on the film they are planning to use. “Installation is also extremely important. The product can be ideal for a specific situation, but it has to be installed correctly.” He added that retailers should ensure that companies they’re working with have experience and/or certification in installing safety and security film.

Like Food Lion stores and Chili restaurants, after-hours protection at Academy Sports + Outdoors stores relies heavily on knowing its risks and having a hardened physical exterior and layers of security. “We have always been very cognizant of what’s in our stores and focused on perimeter protection and denying entry,” said Joe Matthews, Joe Matthews vice president of loss prevention. Their toughened building envelope includes a variety of features, such as reinforced glass, tilt-wall construction, bollards, risk-based use of iron gates, and hurricane shutters. Moves to toughen the building perimeter have paid significant dividends for Academy Sports + Outdoors. “We used to have a lot of smash and grabs, but as we really hardened our stores, we’ve seen a major decline in the number of burglaries,” said Matthews. Measures taken inside stores—to isolate and protect merchandise

They have a great shopping experience.

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SAFELY INTO THE NIGHT most likely to be targeted—also thwarts theft by extending the time necessary to commit it. “Most of our locations have very quick response times, so we look at the specific time it takes and then examine what needs to be done to delay them even more,” explained Matthews.

After-Hours Visibility

As part of a larger company initiative targeting waste and improving operations at Kroger supermarkets, the limitations of its existing alarm systems—or the lack of them at some locations—was identified as an area of risk. So as part of its project, the company approved capital dollars for new alarms, and the company is currently in the middle of a large installation rollout. It is already paying off. “Preliminary results have been fantastic,” said Chris McCarrick. More than simple alerts, the system is providing visibility into overnight store operations, improving the safety of overnight store associates, and curtailing shrink due to theft. An hour after close, the new system must be armed until an hour before opening while specific doors can be disarmed without taking down the entire system, which allows for enhanced security without disrupting workflow. After being armed, individual PIN codes and exception reports provide intelligence on store activity during the night. “The feedback we get from the field and store management teams is that it’s giving them better control over the building. Before, a back door could be opened in the middle of the night, and if it was a direct store delivery, someone propping open a door to have a smoke, or a bad guy, they might never know it,” said McCarrick. “This gives us line of sight when those activities occur, when parts of the system are disarmed and by whom, and provides exception reporting to understand those activities.” The capabilities of today’s alarm systems are a significant upgrade to the monthly alarm company report from years’ past, according to J. Patrick Murphy, a former LP director and now a consultant and expert witness with LPT Security Consulting. “The technology has allowed LP to work smarter not harder,” said Murphy. “It allows the LP manager to

Technology has had the effect of democratizing retail security—providing smaller retail establishments the feature-rich functionality of a surveillance video management system but as a service. Indeed, in some cases it is retailers with smaller footprints that are most apt to embrace advanced security technology.

know every day if anyone has bypassed an alarm zone and to investigate the reason, if it’s some problem with alarm training, or if it’s an equipment issue, or if it’s something more ominous than that.” McCarrick notes that the new alarms, which are monitored internally by the Kroger Central Alarm Center in Portland, Oregon, have J. Patrick Murphy required a culture change. “Because if the building isn’t armed as required, the calls start to go out,” he said. To help ease transition and to help managers get the most out of intelligence features, district AP managers go into each store to provide instruction, JULY–AUGUST

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answer questions, and provide training on the system. By running a contact from the alarm panel into the back of Kroger store DVRs, alarm system exceptions are bookmarked by the video surveillance system. So, for example, if a door is opened overnight outside of a scheduled time, a manager can immediately scan a time line to identify that exception and then click it to watch a video of the event. “Video review is a great supplement to the system,” said McCarrick. Joe Matthews also highlighted the role of video in after-hours protection of Academy Sports + Outdoors stores. “There is a short window of time from the moment they open the door to when the alarm bells, whistles, and sirens go off—and we also have surveillance video from the parking lot and video of them entering the store.” Marrying video and alarm systems can also improve management of alarm events, a valuable asset since false alarms continue to be a significant nuisance and source of expense, according to several LP executives. “For some c-stores or strip center stores, false alarms are the number one item they’re concerned with,” said Ed Warminski, general manager at Supreme Security Systems, a security alarm system solutions company in the Northeast. In addition to fines, false alarms eventually provide Ed Warminski a drag on police response, and thieves may intentionally trigger alarms over the course of weeks in the hopes of causing just this type of casual response. As a result, Warminski said its retail clients are increasingly opting for the company’s Supreme Verified service, which provides video verification by pairing security alarm signals or motion sensors with video surveillance cameras. Remote users can look in live on the camera associated with the triggered alarm, and clips of what caused the alarm get immediately sent to central station operators as well as to the cell phones or

SAFELY INTO THE NIGHT emails of store personnel who need to see it. If the cause of the alarm is an intruder, police—now knowing they’re being asked to respond to a crime in progress—respond 85 percent quicker on average than they do to an unverified alarm, according to some data. Arrest rates also increase, Warminski noted. “False alarms fines can be very expensive, and responding to those alarms are a waste of manpower for police,” said Keenan. “So it’s a win-win for the municipality and the retailer if you can make it happen.” In 2014, Food Lion stores began putting IP cameras in their parking lots. When an alarm comes in to the Delhaize America central station they can immediately pull up video of the scene. “We’re now able to tell the police department that the suspect’s vehicle is ‘a dark color sports utility, possibly a Ford Explorer,’ and sometimes we’re even able to give them the license plate number or part of it because we get that good an image,” said Joe Darnell. Even though it has been possible to access store surveillance video over

the Internet for more than a decade, Pat Murphy believes it’s a technology solution that has not been adequately leveraged by the retail industry. “It’s the greatest technology. You can confirm that someone is in the store, and police can get a description, or you don’t have to go to the store in the middle of the night because it’s just something that fell off the shelf,” he said. “It’s now so inexpensive, and the additional capability more than justifies any additional cost.” While image quality isn’t the same, Murphy noted that even old analog cameras can be retrofitted to provide LP practitioners a remote view inside their stores. “The fact is that there is no real hurdle to change from a camera system that can only operate within the store to one you can see from anywhere,” he said.

Security for All

smaller footprints that are most apt to embrace advanced security technology. While most major retailers continue to use the traditional metal key for entry, for example, some smaller ones are leveraging value from electronic access control, such as Soupergirl, a DC-based food delivery company with one production facility, two store locations, and thirty-five employees. “The traditional key and alarm situation was not going to work for us,” said owner Sara Polon in describing her company’s use of Brivo’s cloud-based physical security platform in a May webinar, “Small Business Doesn’t Mean Small Security.”

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SAFELY INTO THE NIGHT Polon said the scalable cloud-based platform was needed to address numerous pain points common among small retailers. “Employee turnover is a huge problem, and there is no way of knowing who’s made a copy, so rekeying is a big problem. And people forget alarm codes, and sharing them is an issue. And I can’t be everywhere, and contractors and delivery people need access at different times,” said Polon. “But all those problems disappeared,” she said. If an employee leaves, Polon just deletes him or her from the system, and the worker no longer gets in. And if an ex-employee kept a key fob and tries to enter, she can see that. If there is an alert or an issue at a store, she can log in and see video of what’s going on. “I don’t have to run out there in the middle of the night.” She also doesn’t have to ask employees to run to the store to let workers in after hours. “I was literally in New York City when one of our contractors got to one of our DC stores. I just let him in to our facility from my hotel room.” Polon says the reporting and alert features of the software, as well as remote video capabilities, have been critical for her as she tries to stay hands on as she manages the company’s growth. She can run one-time or scheduled reports on activities, see who is coming in and when, limit store access to employees based on when they need it, and get alerts if they try to enter at other times. But it is the remote access capability that is her favorite feature. “It has been a gamechanger for us—letting deliveries in, letting contractors in, and enabling work to get done.” Large retailers seem intrigued by the idea of electronic access control but not yet driven to embrace it. “Using access control in a store environment is kind of a difficult thing to do; it just hasn’t seemed to be cost effective,” according to consultant Mike Keenan. Delhaize America is dipping their toes in, using fob access instead of keys for side doors of some Hannaford stores. Joe Darnell suspects, as they continue to evolve their security program, that card access will begin to play a bigger role. “It seems to be where the industry is heading,” he said. Several LP executives report that they successfully manage traditional rekeying costs with products that offer interchangeable core locks, and others don’t see the security need to do away

It’s the opinion of some in the industry that cutting-edge exterior and interior video surveillance technology is needed to take protection against after-hours burglaries or break-ins to the next level. True or not, LP leaders also believe that strong physical protection is still the most critical source of after-hours security. with traditional keys. “I was never worried about key control if the alarm system was working well,” said Keenan. One LP executive offered a similar view. “In my twenty-three years, I’ve never had anybody break in with key,” he said. Kroger’s Chris McCarrick said they examined the possibility of using the solution in conjunction with its security upgrade but concluded that the cost wasn’t justified. “Card access is very expensive when you’re rolling out at scale,” he said. That is not to say that retailers aren’t utilizing some of the latest technology in service of burglary prevention, but they could do a better job connecting technologies, according to Catherine Walsh, senior vice president and general Catherine Walsh manager at Tyco Retail Solutions. “A major flaw among retailers in their security strategy is not having a cohesive approach,” she said. “Video surveillance, access control, and intrusion detection are a few of the critical components that comprise a layered approach to help prevent intrusion, but they’re much more effective when working together as an integrated security solution.” JULY–AUGUST

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She said new technology is available to seamlessly integrate with existing systems for insight into loss events and to help retailers better understand, in detail, why after-hours loss events are occurring. It’s the opinion of some in the industry that cutting-edge exterior and interior video surveillance technology is needed to take protection against after-hours burglaries or break-ins to the next level. True or not, LP leaders also believe that strong physical protection is still the most critical source of after-hours security. It’s not sexy, but devices like locks remain vital to store protection, according to Sean Ahrens. “I firmly believe that the first line of defense, and the number one thing retail organizations should do, is to harden the facility, including properly designed doors and good-quality locks that are life-safety code compliant but provide really rigorous defense against prying.” He suggested that, for high-risk stores, the added expense and installation time of three-point locks are worth it and that little things—uncovered hinges, a tiny gap that allows a crowbar into a door frame, the quality of the deadbolt—“make a big difference to someone trying to break in.” He also prefers doors without handles when they’re not necessary. “I hate handles. They’re pry points.” Good physical protection has another advantage: it typically won’t break the bank. Most practices recommended by police crime-prevention units are affordable, such as securing sliding-glass windows with the same types of locking devices used for sliding-glass doors; installing security bars on side, rear, or other windows that a burglar might break to enter; and installing locked security guards on ladders and trimming tree limbs to prevent roof access. “Naturally, with an unlimited budget, you could add an awful lot for burglary protection, but realistically you need to be strategic and maybe not invest the same in low-crime areas as others. Protection strategies need to be cost effective, strategic, and based on risk,” Keenan advised. “Understand the business, understand the risk, and understand what’s doable—that’s really where the science meets art in protecting stores after hours.”

Stand out from the crowd

Sc Bob A ho M pp lar ac ly sh Le for ip a a at LP yo Q/L urL P PF C .or g

Unlock your full potential with the LPQualified or LPCertified certification course Join over 1,900 of your professional colleagues who have earned their LPQ or LPC certification. Those letters after your name show employers as well as your peers that you have the knowledge needed to

succeed in the constantly evolving loss prevention industry. That’s why dozens of retailers prefer applicants with these certifications. Stand out from the crowd—start your certification journey today.

Visit www.losspreventionfoundation.org for more information.

Educating an industry one leader at a time.

CERTIFICATION

Stepping Up Your Game as an LP Professional

Interview with Lucas Moeller, LPC Moeller has over fifteen years of loss prevention, safety, and operations support experience with Best Buy and his current employer, Lowe’s. During his career, Moeller has held several management positions including loss prevention agent/specialist/manager, area loss prevention manager, fire safety and operations specialist, and currently corporate safety manager.

Learning about these topics helped me become more well rounded in my loss prevention perspective. Should I ever take on a more focused role involving one of these objectives, I will be able to utilize what I learned through the LPC and apply it immediately.

Why did you decide to pursue your LPC certification? Loss prevention is a field that changes rapidly from one day to the next. Depending on the industry, “loss prevention” can mean different things to different people. How loss is measured, what specifically is focused on, if safety is a component of those losses—all changes depending on company direction. Being loss prevention certified helps give a strong foundation of knowledge and understanding to all loss prevention applicable industries. It ensures everyone who has the same certification can speak the same language regardless of company focus. Also, it has become a staple for what people look for when networking or hiring at any company.

Was the LPC coursework what you expected? The coursework absolutely blew me away. You learn a lot on the job over the years, and I pride myself on being able to retain and apply the things I have learned. The LPC took a fresh approach to these and stretched me mentally in several different ways. To say I learned a lot would be an understatement.

Talk about the process of going through the coursework and taking the exam. After seeing how much coursework there was, I set out to plan how long I thought each chapter should take me including note taking. Once I had my timeline, I realized quickly I needed to be more flexible. Chapters where I was familiar with the materials went much faster than ones I was unfamiliar with. More specifically, the content around pharmaceuticals took me longer to absorb since I hadn’t been exposed to it previously. After completing the content, I took the readiness test two to three times until I felt comfortable and then spent additional time looking over the “gopher notes” I had taken in each section. When I felt prepared, I scheduled the exam at the testing center. Despite my hard work, to be honest I was somewhat intimidated to take the test. But sure enough, between the content being easy to absorb and ample opportunities to study, I was able to pass the exam.

Looking at your own personal background and knowledge, what information in the course helped you the most?

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I think the section that was most enlightening was about taking a holistic approach to loss prevention versus working in a silo. The content did a good job of explaining the importance of this and how ultimately many groups are able to find common ground through profitability synergies.

What benefits have you seen from taking the course? It means a lot to me to have a certification that has so much industry value. The truth of the matter is the loss prevention industry is a relatively small group of individuals, and earning your LPC makes you stand out from everyone else.

If you could offer one key takeaway to someone currently considering getting certified, what would it be? You should always be willing to invest in your own development. As a loss prevention professional, you know we are always measuring the return on investment. There is no question that the LPC certification earns its ROI several times over in both content and industry clout.

How would you compare the foundation certifications to other educational courses that you’ve taken? I have several other more niche industry certificates, and the LPC absolutely had the most value. This is both in content and format. I like that I was able to use the notes section to keep track of the most important “takeaways,” and I was able to pace myself on overall ingestion of content.

How has certification changed your expectations of loss prevention as a career, for yourself and for others? The certification has raised everything to the next level for myself and others I know who have taken the course. Transitioning to new or unfamiliar positions within the loss prevention field is easier knowing that the foundational learning completed during the LPC will fill in any knowledge gaps.

Would you recommend certification to others?

Distribution and pharmacy are sections that helped me the most as I have had limited, if any, exposure to these areas with my career.

What was the most eye-opening information that was part of the curriculum?

The short answer is absolutely. Whether your goal is to continue at the retail level or build a loss prevention organizational program

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from the ground up, the LPC certification can benefit you. I had the opportunity this year to get a lifetime membership and jumped at the prospect. Investing in yourself as well as industry accreditation is a “must,” especially when trying to differentiate from others.

Newly Certified

Our Success Starts with Our Partners

Following are individuals who recently earned their certifications.

DOCTORATE LEVEL PARTNERS

Recent LPC Recipients Matthew Barnett, LPC, Belk Department Stores Francis Benesz, Jr, LPC, Sears Holdings Ian Cherry, LPC, Marine Corps Community Services Ernesto Contreras, LPC Peter Danner, LPC, Signet Jewelers Miguel Falcon, III, LPC, Sears Holdings Brandan Hearne, LPC, Kmart Victor Jacinto, LPC, IKEA North America Services Andrew Jordan, LPC, Six Flags Over Georgia Polly Kelly, LPC, Lowe’s Josiah Leite, LPC, Sears Holdings Peter Lewandowski, LPC, DICK’S Sporting Goods William Macaulay, LPC, PETCO Animal Supplies Nicholas Martinson, LPC, Lowe’s Jason Merwin, LPC, Sears Holdings Charles Miller, LPC, DICK’S Sporting Goods Ryan Mogel, LPC, Ralph Lauren Kylene Nomakchteinsky, LPC, American Eagle Outfitters Michael Rock, LPC, Walmart Stores Brigette Ross, LPC, Vector Security Services Kyle Smith, LPC, Blain’s Farm & Fleet Randall Sneed, LPC, PETCO Animal Supplies Keith Snyder, LPC, Walmart Stores Sergio Tovar, LPC, TJX Mark Tow, LPC, PETCO Animal Supplies Christopher Weaver, LPC, Walmart Stores Derrik Welsh, LPC, The Home Depot Shayla Werner, LPC, Walmart Stores Andrew White, LPC, CFI, King Soopers

MASTER LEVEL PARTNERS

BACHELOR LEVEL PARTNERS

ASSOCIATE LEVEL PARTNERS

Recent LPQ Recipients

DIPLOMA LEVEL PARTNERS

Michelle Baldwin, LPQ, Yum Brands! Christopher Buszka, LPQ, Bed Bath & Beyond Gregory Dolcich, LPQ, Security Resources Anton Dontain, LPQ, Goodwill Industries Sacramento Emily Ferguson, LPQ, John Lewis Partnership Pauline Garcia, LPQ, Vector Security Services Christopher Gipson, LPQ, 7-Eleven Rigoberto Hernandez, LPQ, O’Reilly Auto Parts Matthew Kell, LPQ, Goodwill Industries Sacramento Phun Lay, LPQ, John Lewis Partnership Katelyn Murphy, LPQ, Walmart Stores Ethan Oppenheim, LPQ, Best Buy Nicola Price, LPQ, ORIS Media Joseph Tuilua, LPQ, Onehunga Business Association Gregory Watts, LPQ, Caffe Nero Barbara Weaver, LPQ, Best Buy Kenneth Wu, LPQ, Mountain Equipment Co-Op Allison Wyatt, LPQ, Walmart Stores LP MAGAZINE

Professional development is key to a fulfilling career. Visit www.LossPreventionFoundation.org to find out more. SM

Educating an industry, one leader at a time. |

JULY–AUGUST 2018

LPM EXCELLENCE

LPM “Magpie” Awards: Applauding Excellence

The LPM “Magpie” Awards offer a means to celebrate industry accomplishments on an ongoing basis, recognizing the loss prevention professionals, teams, solution providers, law enforcement partners, and others that demonstrate a stellar contribution to the profession. The ability to influence change is a product of drive, creativity, and determination, but

it also requires a unique ability to create a shared vision that others will understand, respect, support, and pursue. Each of the following recipients reflects that standard of excellence, representing the quality and spirit of leadership that makes a difference in our lives, our people, and our programs. Please join us in celebrating the accomplishments of our latest honorees.

Excellence in Leadership

Excellence in Community Service

Carr has steadily climbed the loss prevention career ladder throughout his career, working for Jamesway, TJX companies, and Pep Boys prior to joining Rent-A-Center in 2009. As senior director of global asset protection, he currently serves on LP Magazine’s editorial board, is a member of the Certified Forensic Interviewer Continuing Education Committee, serves as ASIS Retail Loss Prevention Council membership chairman, and is a member of the ASIS CSO Center for Leadership. Carr believes that true leadership requires a dedication beyond the limits of our basic skills and abilities. The capability to be flexible, adaptable, and open-minded heightens our career potential. “Demonstrate your learning agility and commit yourself to a life of continuous learning,” said Carr. “We must always remain adaptable and ready for change. Bounce back from professional setbacks, learn from them, reinvent yourself, and stay relevant in a changing industry. Businesses are changing more frequently than ever. With these changes come new business strategies, priorities, and initiatives. With every change you must recalibrate your team’s strategy and initiatives to insure you’re properly aligned to support the new business. The key is to keep your team relevant and focused on what’s most important to your organization.” Carr feels that genuine transparency, humility, self-awareness, and a curiosity to stay current with business trends and technology are hallmarks of leadership. However, he also believes that strong relationships—having the support of our families as well as those we work with—are the pillars that everything else is built upon. “Emotional intelligence is the foundation of relationship building and collaboration,” said Carr. “People like to partner with coworkers whom they know and enjoy working with. Put your smartphone in your pocket, get out from behind that monitor, and get to know your colleagues and business partners.”

“I’ve witnessed firsthand the emotional and financial turmoil that a sudden loss can cause,” said Duke, the committee chair of the Loss Prevention Benevolent Fund (LPBF). “After a colleague and good friend of mine passed away, I vividly recall the helpless feeling as his family was dealing with this tragic loss. While he did have life insurance, in the short term his family was facing no income, no health-care benefits, funeral costs, mortgage payments, and monthly bills—all adding great anxiety to the grief they were already experiencing. If our assistance can help a loss prevention professional or their family in their time of need and help relieve some of that anxiety, it’s well worth it.” The benevolent fund was established by the Loss Prevention Foundation to provide financial assistance to surviving families who have lost a loved one while preforming the duties of the loss prevention/asset protection profession. LPBF also provides financial grants to eligible participants who experience a verifiable economic hardship as a result of qualifying circumstances. Support for the program has been outstanding with contributions coming from industry associations such as the Retail Industry Leaders Association and the National Retail Federation, solution providers, and retailers that have adopted the LPBF as a charity of choice. Duke has proudly served with the LPBF since its inception. “It’s not easy for any of us to balance all of the many priorities that we have in our lives,” said Duke. “But once you’re engaged in something that you’re truly passionate about—something that’s in your heart and you truly believe in—you find the time and keep going back for more. It’s a humbling and emotional experience to see the gratitude and relief that these donations can bring. It’s all the motivation I need. We are all blessed to be involved in such a giving and caring community, and I’m honored to be a part of it.”

Jim Carr, CFI, CCIP, Senior Director of Global Asset Protection, Rent-A-Center

Chris Duke, LPC, Corporate Loss Prevention Manager, Heinen’s Grocery Store

Nominate Your Peers at Excellence@LPportal.com We want this to be your program. Those of you working as LP practitioners witness these exceptional performances on a regular and ongoing basis, and we strongly encourage you to provide us with nominees for each of the award categories. We encourage creative nominations and want the program to cast a positive light on the many tremendous contributions of the loss prevention community. Nominations can be submitted via email to excellence@LPportal.com. 26

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LOSSPREVENTIONMEDIA.COM

FEATURE

REFLECTING ON THE EVOLUTION OF RETAIL SECURITY The World of LP According to Paul Jones By James Lee, LPC, Executive Editor

INTERVIEW EDITOR’S NOTE: Paul Jones, LPC, is the new director of asset protection and risk management at CKE Restaurants Holdings, Inc. The twenty-five-year retail veteran started his career at Jordan Marsh and Mervyns before moving into management roles at Luxottica Retail, Sunglass Hut, and Limited Brands where he was senior vice president of LP and global security. Jones also led the loss prevention functions at the Retail Industry Leaders Association as well as at eBay. Most recently he was COO for Turning Point Justice before moving to CKE. Jones has long been active in the industry as an original member of the LP Magazine editorial board and founding member of the Loss Prevention Foundation. EDITOR: You recently took a position with CKE Restaurants. Tell us who CKE is and what brands they represent. JONES: CKE Restaurants Holdings, Inc. owns two brands in the quick-service restaurant (QSR) industry, Carl’s Jr. and Hardee’s. We are headquartered in Franklin, Tennessee, just outside Nashville with more than 3,900 restaurant locations in forty-two states and in twenty-eight countries. EDITOR: Didn’t CKE start in Southern California? JONES: That’s correct. CKE’s founder, Carl Karcher, began his entrepreneurial venture in Los Angeles in 1941 with hot dog stands and quickly grew the business. By 1945, the Karcher family had opened the first Carl’s Jr. restaurant in Anaheim. The restaurants steadily spread throughout the West Coast in the post-World War II growth of the American highway system. A couple of years ago, the company made a strategic decision to move the California corporate offices in Anaheim and Carpinteria along with the St. Louis, Missouri, office to Tennessee. EDITOR: Carl’s Jr. is predominately still on the West Coast, correct? JONES: In the US, Hardee’s restaurants are predominately east of the Mississippi and Carl’s Jr. on the west, but the brand recognition for the Happy Star is

First and foremost, my heart is in retail loss prevention and always has been. While I had great learnings as a solution provider and have newfound respect and admiration for those in the solution-provider space, I had a desire to get back into retail. nationwide. Both Carl’s Jr. and Hardee’s pride themselves on providing great customer service and innovative menu options while still maintaining their charbroiled burger roots. EDITOR: You were most recently the COO of an LP industry solution provider. What enticed you to make the move back to the retail side with CKE? JONES: Well, a couple things. First and foremost, my heart is in retail loss prevention and always has been. While I had great learnings as a solution provider and have newfound respect and admiration for those in the solution-provider space, I had a desire to get back into retail. As I JULY–AUGUST 2018

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worked with my network, the opportunity at CKE was presented to me as a group that was looking to change and transform their company. They were looking for a leader of asset protection and risk management that could help them with that transformation. I had the pleasure of interviewing with our Chief Operating Officer Tom Brennan, and we really clicked. I was very excited about the type of change the whole executive leadership team at CKE envisioned. It reminded me of my early Sunglass Hut days when I was part of that company’s dramatic change. Today that company is still a vibrant, successful retailer as part of Luxottica Group. The CKE Leadership Team is committed to

INTERVIEW It’s been really rewarding to take a new group of people—some with QSR experience, some with none—and onboard them very quickly knowing that we’re in this challenge learning the QSR space, because it is a different space.

driving our global business forward, running a great QSR business, and having a global footprint to make this a very profitable company. EDITOR: What areas of responsibility do you have? JONES: Today I have asset protection, safety, and risk management. The QSR world is a little different from regular retail. Safety in our world is not only reviewing accidents to get to the root cause and figuring out solutions but also actually getting into the pipeline of how we build our restaurants, the type of equipment we use, developing new equipment when what’s out there isn’t working, and creating processes that will further enhance our safety culture. Then we have a compliance function behind that, so as new products or solutions are introduced, we train and educate our employees to ensure they are working safely. In the QSR space, safety issues can be a bigger hit to the P&L than actual shrink loss. EDITOR: Thus far, what have you found to be the major challenges and issues? JONES: Currently, we have a unique challenge because we have an existing team running the business that’s in place

in California that we’re replacing. So we almost have two jobs: one to develop a new team, new protocols, and new methods and procedures to attack losses and safety and risk, but at the same time managing the existing team. It’s pretty unique to some of the transformations that I’ve done in the past. If you think about it, it takes a certain type of care and motivation for those associates who need to continue to drive the business forward while knowing that they are transitioning out of the company. But I’ve got to tell you, the team that we have in place in Anaheim has really stepped up to the challenge. They’ve been ultimate professionals in helping us build a new team in Franklin and making sure that they hold the business together with true integrity and honor in order to leave us with a better process and a better team. EDITOR: Are you currently hiring your own team? JONES: That’s my second-biggest focus. How do you hire a team of ten in a period of sixty days and get them trained within ninety days while not missing a beat with your current business? We’re in that process now of recruiting talent. Incidentally, I was able to find all our asset protection people using LPjobs.com. LP MAGAZINE

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EDITOR: Is your team going to be situated across the company in regional locations? JONES: No, we went to a centralized model as I have done in past companies. When I started looking at the challenges and what the future looks like, it made sense to centralize the team and fly them out when we need them in the field. We’re moving to a telephone-interviewing model and high-prevention model—how we prevent incidents so that we’re not taking cases but really mining the data to go after only ones that are most meaningful. We’ve spent the last ninety days putting all the data sets together so that we fully understand all the drivers and triggers of profit loss, risk loss, and accident causes throughout the business. EDITOR: Explain that a bit more. JONES: We’ve done a ton of work to make sure that we understand the historical data to allow us to plan for the future. Part of the plan on the asset protection side is speaking to the field team in a way that they really understand what their losses are because today they don’t fully understand that. What we’ve done is come up with simple risk models—one, two, three, four, five—and input into risk models their food loss, accident cost, coupons, voids, and cash loss. What we see, as we all know the 80/20 rule, we can focus the field team on where we need better training, where we could maybe use more staffing, and where we could use investigations. In the past, they didn’t have the ability or the tools to be data-centric, whereas today we’re building those metrics so that we can move forward. EDITOR: Talk about some of the technology solutions that you already have or that you plan to implement. JONES: We’ve done just basic data mining using some internal tools, taking all the disparate databases in the company

INTERVIEW from audit scores to past cases to food loss to voids to chargebacks to turnover rates and building risk models with that. In the past, CKE looked at those things separately, but as we know as practitioners, we gain a lot more insights putting them together and looking at that total picture. We found it necessary to break out Carl’s Jr. as a separate entity from Hardee’s when doing that type of data analysis because the shrink problems, food loss problems, safety problems are different in both locations. There are drivers, for instance, on food loss in a Hardee’s environment that’s being driven by certain products, mainly biscuits and the way we do buns. In the Carl’s Jr. environment, it’s not as centric for breakfast, so there’s less food loss as it relates to those items. EDITOR: Risk management is not always an area most LP executives manage directly. How have you handled that responsibility? JONES: One of the reasons this job was very appealing to me is I’ve never managed the risk management function.

I’ve managed safety but not risk. So I was excited to be able to learn a new discipline. I had several industry friends help me prepare for that. Leo Anguiano spent several days with me talking about how to think about risk. Maurice Edwards spent time with me discussing risk and total cost of risk. I appreciate that people were very generous with their time. Also, internally we recruited a solid risk management professional, and over the last four months I’ve spent a lot of time digging into understanding risk, the cost of risk, how to manage risk, how to do things maybe differently. We’ve found that we can use some technology solves into our risk pipeline to reduce costs. For one, we’re implementing a traveler care nurse line with Travelers Insurance. So instead of filling out forms and having an adjustor call our injured employees, crew members will be able to get on the phone with a nurse the minute an accident happens. Companies that use this approach find a reduction of 20 to 30 percent in their cost. Calling other people in the QSR space, asking what they’re doing, and then looking at our approach and adjusting it,

I’ve found to be pretty exciting because there’s some simple fixes that we’re doing that should save us hundreds of thousands of dollars. EDITOR: Over the next twelve to eighteen months, how will you measure your success? JONES: I think from the asset protection side, it will be, has this smaller team performed at the level of the past team or above? Have we reduced losses to the company? Have we been true business partners, and have we helped the field organization make their restaurants more profitable? On the risk management side, it will be, what is the cost of risk and have we reduced it? A lot of that will be helped by our broker, Marsh, who has several QSR restaurants in their portfolio, who can help us answer, what is the total cost of an accident for worker’s comp and slips, trips, and falls? And are we at or above that? We’re starting to put quarterly measurements into place now to try to find that out because we haven’t done that historically here. Our quarterly metrics

Safety in the QSR world is not only reviewing accidents to get to the root cause and figuring out solutions but also actually getting into the pipeline of how we build our restaurants, the type of equipment we use, developing new equipment when what’s out there isn’t working, and creating processes that will further enhance our safety culture. 30

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INTERVIEW will tell us, for this same store subset, are we better or worse per total cost, per accidents per 100,000 employees, and how long has a claim stayed open? We are very aggressively working with our provider to go after the claims reviews and making decisions quickly on whether we settle or whether we move forward and litigate the claim. Again, these are new learnings for me. I’ve got to say there are at least a half dozen QSR peers that have taken my calls and helped educate me on their programs. I’m taking the nuggets I get from each of them and working them into the program that we have. EDITOR: Are more of the issues employee claims as opposed to customer claims? JONES: The biggest loss issues in the QSR risk space are employee claims. Those accidents tend to be the more egregious accidents. But slips, trips, and falls in QSR can also be a nightmare. So we’re working on a lot of things. What are best methods for keeping floors clean and keeping them from being wet? Do we

have the right mops in place? Do we have the right signage in place? Are we using the right utensils in the back? Are we cleaning our fryers the right way? Do we have the personal protection equipment on? Are people wearing the right shoes? All that is audited by a third party for us, and our safety manager follows up with stores with low scores to make sure they are retrained. EDITOR: What role are you playing today with the franchisees? JONES: Today we’re a support role only. When they call and need something, we help them. The goal is as soon as our program is fully up and running, we will look at an approach for supporting our franchisees to help them be the most profitable they can be. I envision determining what are the best methods and sharing what we do. We certainly don’t tell franchisees how to run their business, but we can give them our best practices. Secondly, we have to establish a dialogue with the franchisees, which has not been part of our historic process. For

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example, I speak almost weekly with Tracey French at Boddie-Noell, one of our largest Hardee’s franchisees, to both learn what he’s dealing with and exchange different ideas that we’re considering. There are areas that we can collaborate and vendors that have more experience in the QSR environment. For instance, both Boddie-Noell and CKE just put in Vector Security. To us it’s a great solution, it’s the right price, and they totally understand this type of business. We both separately, without actually knowing it, have implemented ThinkLP. For us, ThinkLP will be a loss prevention portal that will handle risk management, safety, asset protection, crisis management, and will help us follow up with the field compliance piece. It will handle accident reporting and risk management paperwork, and we’re considering setting up a module that will help handle HR and maybe even legal. EDITOR: So over the next year or so, a whole lot of things will likely change in terms of your relations with the franchises.

INTERVIEW

Today as we move to a total cost of loss strategy, I think it helps us build a better return on investment. I believe most LP practitioners have always taken into consideration what the total cost of loss is, but now there is framing around it that creates a more powerful message to speak to the corporate business leaders. JONES: That’s right. Again, my boss, the COO Tom Brennan, his sole goal is to ensure that his team, including us, are finding ways to help the restaurants and the franchisees be more profitable. So if I take that as my headline, I have got to build a path to help us get there. And again, it’s a different relationship because you can’t force your ideas on them, but you certainly can say, “Here’s what’s worked for us and for others, and here are solution providers that we can recommend and stand behind that you might want to think about.” We think there are a number of things that we can do to help franchisees around the globe be more profitable. EDITOR: I’m confident you will make that happen, Paul. Let’s turn to some of your other unique roles in the industry. You had a great run with eBay. Tell us about that. JONES: What a great experience eBay was for me. When I was leaving RILA (the Retail Industry Leaders Association) and looking to get back into the industry, eBay offered me the opportunity to talk to them. I was a little suspicious because I knew that their site had stolen goods and believed at that time that they seemed to be resistant to taking care of that. But as I talked to them and met with individuals there, it became clear to me that the entire eBay retail problem centered around a lack of trust and communication. I looked the folks at eBay in the eyes and believed that they really, truly wanted to fix the problem. So I joined knowing that there was nowhere to go but up with

the relationship. I started with just one focus—to try to bring eBay and retailers together. So in a quick period of time, I was able to show key people in eBay that there were stolen goods on the site and that we could use data to try to pinpoint that. EDITOR: How did you do that? JONES: One of my first hires was a programmer. I asked him to get me all the pawnshops on eBay who were selling baby formula, Crest Whitestrips, and diabetic test strips. There were hundreds of them on eBay. And from that point on we were able to drill into it to find out that they didn’t have a clear supply chain, that they were actually buying product from people committing crimes, and we were starting to address some of those sellers on our site. That gained instant credibility with the senior team at eBay, and I became very trustful that eBay wanted to fix those problems. As I went around the world getting onboarded with eBay, I found out that we had something like sixty people who manually processed subpoenas. It seemed very odd to me that we were doing this manually through faxes given eBay was one of the largest technology companies in the world. So we came up with an approach to automate the process, so law enforcement would go through the web to give us their subpoenas. We would pull the data automatically. We built a system that does this, which works very well today in multiple languages. We took the payroll that we saved from that and hired asset protection managers. We started looking at not only stolen JULY–AUGUST 2018

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goods but also counterfeiting, exploitation of children, and money laundering on the PayPal side. We built reporting and mechanisms to not only identify those crimes but also actually go after some of those criminals. From forgeries in art and autographs to clearly stolen goods to someone scamming the system by buying stuff but not paying for it, we had different approaches across the globe for all of that. We made a real dent in crime, and within a couple years, as you guys highlighted in the magazine, instead of pointing fingers, retailers and eBay were working together to solve the problems as a joint collaborative team. I’m hearing that they’re still doing great things with the retailers, which is really good. EDITOR: After eBay, you moved to the solution-provider world as COO of Turning Point Justice. What did you learn from that experience? JONES: At eBay, I had spent 80 percent of my time on the road. Moving to the solution-provider side was a big risk for me, but one of the real positives was it allowed me to work within two miles of where I lived. I had met Lohra Miller, the former district attorney of Salt Lake City, who talked to me about her technology project and her vision for helping the criminal justice world with petty crimes by educating offenders as opposed to having them arrested. It’s something I have always believed in. She advised me that she was a partner with the National Association continued on page 34

INTERVIEW continued from page 32

for Shoplift Prevention (NASP), who I had been associated with for twenty years. Frank Johns and I rolled out one of the first retail pilots of NASP’s offender education program in Los Angeles twenty years ago. Given this technology startup was paired with a very reputable group of people that I knew were passionate about fixing shoplifting and helping retailers, I thought Turning Point Justice (TPJ) was a good fit for me. When I say that TPJ was a true startup, I really mean that. For the first six months we had a small office with plastic tables, using our own cellphones, and holding meetings in hotel lobbies to try to get sales and make things happen. I worked hard to get some key retailers to give us a chance and build our sales, and we did quite well with that. We were able to put operating disciplines in place to make sure we had good purchasing, that we had the right product. We were able to always continually adjust our technology product to make sure that we were in line with both legal and statutory requirements, whether it be district, state, or county. I really enjoyed the entrepreneurship. As you know, one day you’re doing HR work, the next day you’re recruiting, the next day you’re packing boxes and shipping stuff, or you’re on the phone with your retail counterpart. Some days that’s good, and some days you’re scratching your head saying, “What did I accomplish today?” as you’re driving to the mailbox to drop off shipments. It was a great experience for me to help build that company and put an infrastructure in place. EDITOR: You’ve also had one other very important industry involvement as one of the founding members of the Loss Prevention Foundation and are currently on its board of directors and executive committee. Why have you remained so actively involved in the foundation? JONES: I remember sitting in a room talking about why our industry didn’t have an organization that was committed to

developing the professionalism of the loss prevention industry. We all knew that there were many great leaders of loss prevention that you could put against any senior operator, and they could run the business as well as the next person. But how do we make sure that we didn’t lose the new generation of LP people coming in? I think that concern really inspired me to be part of the LP Foundation, to help be a beacon out there for loss prevention people coming in. I get a real kick out of going on LinkedIn and seeing these new loss prevention professionals so proud that they passed the LPC. And I just am proud to see that so many of these people that have gone through LPQ and LPC have gone on to be leaders in our business. I can testify that certification is not just something where you sign your name, pay the money, and get credentials. It’s a course that truly puts a framework around what it is that we should do as practitioners. I’m also proud that we have stayed on course and never strayed from our mission. It isn’t about making money or prestige. It’s about taking care of this profession and making sure that it continually grows, that it’s professional, and that it’s taking on new challenges. I know we have a number of new offerings coming out from the foundation, and I’m very excited about them. EDITOR: You deserve a lot of credit for where the foundation has grown today. If you could, reflect back on the last twenty years of what you’ve seen in the loss prevention industry and give us your thoughts on where we have been, where we are, and where we are going. JONES: I can say ten to fifteen years ago, we were all about driving numbers, hoping shrink would come along with it. Sometimes we had data, but most often we were going on instinct. As technology evolved and we had exception reporting, we learned how to use data to start driving decisions. In fact, what I saw in my career is that we in loss prevention did it better than the operators. We took the time to make sure that data drove decisions, and then JULY–AUGUST 2018

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we developed the solutions around what the data told us. We developed programs, built training, and awareness behind that, and then we saw our shrink get fixed. When you take that approach to allow data to drive the decisions, and you make the investment in getting the right people who are very smart, you’ll have a great solution. I hope to get people sitting around me that are smarter than I am and very diverse in their thinking. I’ve seen a number of times in our industry where retailers make an easy decision to put an operator to run a loss prevention organization. More often than not, it hasn’t worked out so well. It reminds me that an LP executive brings a unique discipline to the table with the understanding of how to put together what the data tells you with how to build a program and pull the levers to make sure that you are driving your shrink down, at the same time impacting your sales in a positive way and keeping people safe. Loss prevention professionals really are great leaders who add more and more value to their companies. If you look back to the aftermath of 9/11, most of us took on crisis management roles. As the world changed, we had to learn what to do about workplace violence and organized retail crime. Now we’re managing programs for active shooter. Some are starting to take on data-security roles and looking at cyber crime. And now risk management. Today as we move to a total cost of loss strategy, I think it helps us build a better return on investment. I believe most LP practitioners have always taken into consideration what the total cost of loss is, but now there is framing around it that creates a more powerful message to speak to the corporate business leaders. I really can’t think of another industry with professionals who add value and impact their company as much—an industry where a high percentage of people are willing to take phone calls, share a program, and give you their advice. That, to me, has made this a phenomenal industry to be part of.

ACADEMIC VIEWPOINT

The Blurring Lines between ORC and Cyber Crime I

By Tom Meehan, CFI Meehan is the chief strategy officer and chief information security officer for CONTROLTEK. Previously he was director of technology and investigations with Bloomingdale’s, where he was responsible for physical security, investigations, systems, and data analytics. He currently serves as the chair of the Loss Prevention Research Council’s innovations working group. Prior to his thirteen-year tenure at Bloomingdale’s, he worked for Home Depot in loss prevention, and has had various technology, loss prevention, and operational roles at several other companies. He can be reached at tom.meehan@controltekusa.com.

n 2003 the Loss Prevention Research Council (LPRC) worked on a three-year international research project with the University of Leicester, UK. The research was focused on the impact of organized retail crime (ORC) on communities, businesses, and individuals. This became the pivotal point when retailers transitioned away from using the term organized retail theft (ORT) and started using the term ORC. I recall reading the research project and realizing that this was the first time I had seen fact-based research that covered the broad scope of ORC. The project talked about the real reach of ORC, police corruption, collateral damage, illegal immigration tactics, and many other facets of it. “Our sixty-plus retail chain members are increasingly describing more ORC crews that have moved in part or totally from in-store to online activities. The move is mostly dependent on having the needed skills,” said Read Hayes, PhD, a research scientist at the University of Florida and director of LPRC. Fast-forward to 2018, and you would probably see all the same topics with the addition of the terrorism funding and potentially human trafficking.

The ORC Triad

When I think of ORC, I break it down into three categories. One is theft, which could be theft of goods, service, or cash—basically theft of anything. The second category is fraud. Just like theft, this could be any type of fraud—check, credit card, document fraud, and others. And lastly is cyber crime. I think that’s the one that’s often missing when we talk about ORC, especially in retail. If you ever heard me speak about ORC, you would hear me refer to the “ORC triad,” and this term refers to the three categories I just described. I believe that looking at ORC as this triad is all-encompassing, and this allows you to build programs and culture around the total scope of ORC. ORC today differs from years ago. Now a shoplifter turns booster, then moves to fraud, then easily jumps right into cyber crime. The dark web and the Internet in general have a host of tutorials and manuals on how to commit cyber crime. For example, the dark web has groups like The Shadow Brokers (TSB), which allows people with little to no computer skills to purchase malicious software and instructions on how to deploy it. TSB even offers a subscription-like service to its members for access to new releases of the latest and greatest tools to commit the nefarious LP MAGAZINE

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actions via computer. You read it right—you can search the web to learn how to become a hacker, or you can pay a subscription fee and have someone provide you all the tools. What could be easier?

Bridging the Gap

In July 2016 I wrote an article in this column titled “Bridging the Gap between Cyber Crime and ORC.” I received a lot of feedback and have spoken about this topic several times since then. The number one question I got was on how to determine if it’s ORC or cyber crime when the lines are blurred. The simple definition of cyber crime is criminal activities carried out by means of computers or the Internet. However, my goal is not to redefine ORC or cyber crime; rather it is to have organizations rethink their approaches and realize how often they are one and the same. I’ll use an example that we often see in retail. Someone enters the store with a stolen credit card and uses it to purchase three mobile phones. Is that cyber crime? The short answer is no; it’s credit-card fraud. But what if that same person purchased that credit-card number on the dark web and made a counterfeit credit card? Does that change the response? Is it cyber crime now? Retailers are facing these types of cases day in and day out. In my experience, it is a lot easier to put a case together for local, state, or federal law enforcement when there’s an element of a computer crime. I personally had experiences where I worked with law enforcement on ORC cases with several million dollars of loss, and it took several years to bring those cases to closure. I also had personal experiences where cases were much smaller in volume but were easily prosecuted when they involved the cyber-crime or computer-crime element. I reached out to Joseph LaRocca, the senior advisor at Retail Partners, who is a globally recognized expert in shrink reduction and retail crime issues. I asked him about his thoughts on the evolution of ORC. LaRocca said, “Organized retail crime activity continues to evolve, and with the development of new technology, criminal bad actors are refining their techniques to target traditional physical assets and virtual assets across vast geographic hubs.” I hope this article gives you a different point of view on ORC and on its evolution and impact. Cyber crime is a global issue certainly much larger than any individual retailer. It’s important to keep up to date in the latest trends and how they are affecting other retailers. JULY–AUGUST 2018

EVIDENCE-BASED LP

Deterring Determined Offenders

by Read Hayes, PhD, CPP Dr. Hayes is director of the Loss Prevention Research Council and coordinator of the Loss Prevention Research Team at the University of Florida. He can be reached at 321-303-6193 or via email at rhayes@lpresearch.org. © 2018 Loss Prevention Research Council

kay, it’s not just complicated; it’s complex. At least that’s the opinion expressed by some tweeters recently. The “Twitterland” consensus seemed to suggest controlling crime is often more difficult than handling some medical pathologies such as broken bones. Here’s their reasoning: with some exceptions, setting a broken leg now and hundred years ago is pretty much the same thing, and this applies to whether the patient is in China, Iceland, or Iowa. But trying to deter a determined offender is affected by what’s been described as “a rat’s nest of small effects.” These effects come from multifaceted people, places, times, malfunctions, and interactions. The fancy way to say it is crime is polygenic (multiple simultaneous and sequential causes). Crime events often arise when motivated offenders come across a desirable and seemingly vulnerable target. But they don’t always, or even usually, occur in those conditions. That’s because it’s complex. Other conditions, like an offender’s situational perceptions, mood, capabilities, and so forth, play a role in an offender deciding to initiate a crime attempt. And because crime generates injuries, fear, loss, and disruption, we should take controlling it very seriously. Crime and loss control should be well thought out, focused, systematic, rigorously tested, and kept relevant and impactful. To this end, I’ve laid out some key concepts we might all consider.

Aware-Understand-Act

Sensors help and can be hotline-type reporting, transaction exceptions, audits, cycle counts, reporting, or electronic, for example. To plan and act, we need to detect or know of a problematic person, crew, pattern, or place, and the sooner the better. But we also need to carefully define the issue—in other words who, what, when, where, why, and how—to properly prescribe precisely targeted responses. Our efforts should be designed to affect offender perception and response. They should increase crime effort and detection risk and reduce potential benefits. And testing should reveal how to shape our responses to local conditions as cost-effectively as is reasonable.

Crime and Place: Why Crime Emerges, Persists, and Desists in Specific Places

Very few things randomly occur. There’s a reason, and again, it’s usually complicated. Our sensors and risk ratings should help us find priority locations (physical or digitally connected), but why are some places riskier than others and some of those especially risky? We look at what the place routinely does and carries, who leads it, how the building, parking lot, or connections are laid out, what protective

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tools it deploys (and how), and what is right near it. We also look at who and how many reside near it and how easy it is to get to and from it compared to other desirable targets. The more you know about problematic places, and how and why they differ from similar unproblematic places, the better you’re able to affect positive change. And always remember that threat level is what a place is exposed to; vulnerability level is how well the place can handle varying threat levels. Risk levels result from the interaction of these two dynamics. And vulnerability can actually change daily depending on who’s currently in charge. It’s tough to affect threat levels (zone 5, beyond the parking lot), even though we’re working on that. So our primary actions are shaping zone 4 (the parking lot), and zones 3 to 1, the building interior, nearby the asset, and the assets themselves.

SARA: Specific Issue Problem-Solving

It really is important to emphasize situational problem-solving. Problems are clustered for a reason as we’ve been discussing. SARA came from criminology and law enforcement’s problem-oriented policing and provides a simple framework to increase impact. Find your problem (S for scan), carefully define it (A for analyze), now devise and deploy targeted solution sets (R for response), and finally review your results and of course your program execution (A for assess). It’s not that difficult, and it’s only our laziness that precludes this simple process. Crime creates injuries, fear, loss, and disruption, so our preventive and responsive actions should rise to the occasion.

Supportive Therapies: Make Primary Treatments More Efficacious

A last premise here is when putting together treatment packages, think about how they work. How do they affect an offender before or after they initiate? How might they deter or at least disrupt an offender? How do I best dose or deploy this intervention? And what other interventions might make this one work better or longer?

LPRC: A Research and Results Community

Our Loss Prevention Research Council (LPRC) team has absolutely enjoyed engaging with so many loss prevention/asset protection (LP) professionals, including solution developers at the Retail Industry Leaders Association (RILA) and National Retail Federation (NRF) conferences—fantastic people working together to reduce so much crime and loss. We’re also planning our 2018 LPRC Impact Conference to be held October 1–3 on the University of Florida (UF) campus. It looks like we’ll have a whopping ten interactive Learning Labs this year.

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Learning Labs are twenty-five-minute dives into brand new anti-theft, fraud, violence, and error LP research. The groups go through the project, then discuss how they might use the results in their businesses. Also look for a brand new “Mad Scientist” gamification to bring together new concepts and fun. We’re also featuring a new UF STRATEGY@Impact breakout led by Mike Scicchitano, PhD, for the most senior LP executives where they’ll interact with three UF faculty and each other to brainstorm more strategic concepts for rapidly evolving retail enterprises. This program is made possible by UF, LP Magazine, the Loss Prevention Foundation, and LPRC. We hope to see you in Gainesville this fall to learn and build together with LP executives from sixty retail chains, seventy solution tech companies, and research scientists.

IF THIS IS HOW IT FEELS TO CHANGE YOUR LOCKS...

Research in Action

We’re always working to make protective efforts work or work better. Evidence indicates offenders aren’t deterred unless they notice, recognize, and respect countermeasures (See, Get, Fear). To further practical, persuasion science, the LPRC conducted a series of in-person offender interviews in a big-box store lab to understand the impact of deterrent signage. The signage in this small-scale exploratory study featured specific technological claims to measure offender perceptions and actions. The LPRC collected data from eight active shoplifting offenders while in a shopping setting. LPRC Senior Research Scientist Mike Giblin and team collected all data in September 2016 for offender interviews. In past research, offenders often cited a lack of a specific and credible threat as their reason for not being deterred. All stores have cameras, so a sign alerting them that they’re being recorded doesn’t present a new, specific, and credible threat to them. They know they’ve been successful with currently deployed technology in place, leading our research to focus on seemingly new advances in loss prevention technology and ways to prime or reinforce the presence and credibility of the treatments. Furthermore, we sought to study specific and commonly understood technological claims. In the current study, the team exposed offenders to signage marketing the presence of a DNA technology (stimuli) to preliminarily measure if this tactic might provide a new and more credible threat to would-be victimizers.

Summary of Key Findings

ALL ITEMS OF PROPERTY ON THIS SITE ARE MARKED WITH A DNA FORENSIC CHEMICAL

A majority (75%) of offenders noticed the DNA claim before being prompted, citing it as the first aspect of the sign that drew their attention. ■■ A larger majority (88%) understood that the claim was referring to DNA forensics for the purposes of solving crime. ■■ All offenders (100%) who recognized the concept of DNA believed the claim to be related to human DNA, when in fact this technology works by adhering a traceable plant DNA to a suspect. ■■ Most offenders (70%) believed the DNA claim to be true. ■■ Finally, 75 percent of offenders were strongly deterred by the DNA claim signage, while the remaining 25 percent were somewhat deterred. This research brief is just part of one of several studies measuring how differing marketing methods and options affect offender perceptions, and it ties into larger randomized controlled trials conducted across test and control retail locations. ■■

LP MAGAZINE

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Don’t Miss LPM Online An All-Digital Magazine with All-New Content

LPM Online is an all-new magazine experience. LPM Online publishes every other month on even-numbered months in between our print editions. The inaugural edition went live in August. You can view it and our current edition on the LPM Online tab on our website, LossPreventionMedia. com, or by entering LPM-online.com in your browser. The exciting feature of LPM Online is how we can use dynamic elements in both the articles and advertising—things like embedded videos, podcasts, and animations that will bring the information alive. Plus, it is optimized to view on smartphones, tablets, and desktop computers.

To receive notice of all editions of LPM Online, you need to be a digital subscriber of LPM. It’s free and gives you access to all our digital content, including our extensive website, print magazine archives, special reports, and much more. If you are not a subscriber, use the SUBSCRIBE NOW link on our website. If you are a solution provider and want to reach the loss prevention audience with a medium that allows you to demo your technology, show a corporate video, or otherwise showcase your products and services, contact our advertising manager Ben Skidmore at BenS@LPportal.com.

LPM Online—A Dynamic Magazine for LP Professionals

FEATURE

EUROPE

$29.05 BILLION

USA

$42.49

ASIA PACIFIC

BILLION

$24.04 BILLION

LATIN AMERICA

$3.99 BILLION

THE WORLDWIDE IMPACT OF SHRINK GLOBAL RETAIL SURVEY COMPARES THE DRIVERS OF SHRINK IN THE US VERSUS THE REST OF THE WORLD By Meg Costa

THE WORLDWIDE IMPACT OF SHRINK

Global Retail Shrink Distribution, USD Losses by Region

EUROPE USA

$42.49 BILLION

36%

$29.05 BILLION

21%

38%

23%

22%

17%

ASIA PACIFIC

18%

$24.04

25%

LATIN AMERICA

$3.99

BILLION

29% 24% 29%

18%

GLOBAL SHRINK

$99.56

27% 21% 29%

23%

BILLION

Dishonest Employee Theft

n the United States and around the globe, shrink continues to be a challenge for retailers, especially as competition grows, profit margins constrict, and the availability of quality employees becomes increasingly limited. Retail companies in the US have been hit especially hard by shrink in the last five years, but technology is helping brands combat both internal and external theft. Shrink cost US retailers an incredible $42.49 billion last year, according to the latest Sensormatic© Global Shrink Index study. US losses account for almost half of the total $100 billion in losses across all nations surveyed—a reality that has a significant impact on retail companies, employees, and shoppers alike. The study found that US retailers are more likely to be plagued by external theft and shoplifting than internal theft. When comparing verticals, fashion and accessory retailers had the highest rate of shrink. While the US is in the top five countries in terms of investment in LP technology, the survey suggests there is room for improvement—even for those

Admin/Noncrime Loss

that already account for shrink in their business models. “Controlling shrink is critical to the profitability of any retailer,” said Mike Keenan, CPP, CFI, LPC, managing director of retail loss prevention at TAL Global, an international security-consulting and risk management firm. “If you are able Mike Keenan to reduce shrink, you’re bringing back real dollars to the bottom line.” Tyco Retail Solutions commissioned the global shrink study, which was conducted in October 2017 by PlanetRetail RNG, a global retail intelligence and advisory firm. The online survey included more than 1,100 retail decision makers across four regions, fourteen countries, and thirteen retail segments. The retailers surveyed operate more than 229,000 stores and generated an estimated $1.56 trillion from 2017 into 2018, accounting for 80 percent of total retail sales worldwide. JULY–AUGUST 2018

LOSSPREVENTIONMEDIA.COM

Supplier Fraud

The Global Leader

Shoplifting

The impact of shrink on the US retail industry is substantial, in part because of the sheer size and value of the market in this country. The rate of retail shrink in the United States—1.85 percent—is only slightly above the global rate of 1.82 percent. However, since the United States is the largest global consumer market, its total losses are much higher than any other nation. In fact, America’s retail losses of $42.49 billion dwarf those of the countries with the next highest shrinkage values—China at $13.52 billion and the United Kingdom at $7.45 billion. In the United States and globally, fashion and accessories stores experienced the highest rate of shrink. US fashion and accessory retailers reported losing 2.43 percent of sales to shrink, which was higher than the global average for that vertical at 1.98 percent. Experts indicate that stores selling clothing, shoes, and accessories likely are more attractive to thieves, since those products are generally worth more than other verticals, such as office equipment stores, which had the lowest shrink rate.

THE WORLDWIDE IMPACT OF SHRINK

Key Insights into US Shrink Performance

rank in losses wordwide

LARGEST CONSUMER MARKET IN THE WORLD

$42.49

9th

largest shrink rate globally

1.85%

BILLION

The rate of retail shrink in the United States—1.85 percent—is only slightly above the global rate of 1.82 percent. However, since the United States is the largest global consumer market, its total losses are much higher than any other nation ($42.49 billion). Kim Warne, vice president and chief marketing officer for Tyco Retail Solutions, explained that fashion merchandise is always in high demand, which is part of the reason why loss due to shrink in this vertical totaled more than $4 billion in 2017. “By definition, fashion changes with the season, and these products are relatively higher Kim Warne priced and are highly brand specific,” Warne said. “The latest hot fashion items such as athletic shoes or purses being promoted are also the most likely to be stolen as the relative higher unit value makes them more attractive to thieves.” The leading source of shrink will likely come as no surprise to US retailers. Nearly 36 percent of losses were reported to have come from external shrink, a figure that is slightly above the global average. Shoplifting was the main source of external losses at 51.5 percent. Return fraud was reported for 26 percent of

external shrink cases, and organized retail crime (ORC) ranked third at 20 percent. Internal shrinkage, including employee theft, was rated the second-highest source of shrink in the United States, at about 25 percent. Vendor and supplier losses totaled just over 21 percent of shrink, while administrative losses accounted for less than 19 percent. Interestingly, the rates of shrink in certain US verticals ran contrary to those in the rest of the world. A prime example is the shrink rate for consumer electronics stores in the US (1.84%) versus the global rate (1.93%). This is a strong indication that US retailers have fully recognized the threat of shrink at high-value electronics stores and responded by installing effective loss prevention tools.

Factors Driving Retail Shrink

For many brands, effectively combatting shrink means first understanding the factors that drive it. The survey authors point to four factors driving increased shrinkage rates worldwide—growing urban population densities, difficult economic conditions, LP MAGAZINE

JULY–AUGUST 2018

limited workforce pools, and the growth of online shopping. In many countries and in areas throughout the US, expanding city populations and difficult economic conditions are conspiring to give employees and shoppers alike the motives for theft. Meanwhile, a shortage of retail workers and the proliferation of the Internet are creating greater opportunities for stealing products. Keenan says the Internet has dramatically changed the landscape for external and internal thieves in the US. Perhaps that’s why employee theft of merchandise was the largest overall contributor of internal shrinkage losses at 41.6 percent, much greater than vendor and supplier losses and administrative losses. Meanwhile, shoplifting was by far the biggest source of external shrink in the US, accounting for more than 50 percent of such losses. “When you think about what really drives external theft, it’s actually the capability to offload the product,” he said. “Prior to the Internet, the primary way you were able to sell large amounts of stolen merchandise was through a fence. The

THE WORLDWIDE IMPACT OF SHRINK

US Shrink Rates by Vertical, 2017–2018 Fashion and Accessories Stores

2.43%

2.03%

Drugstores. Pharmacies, and Perfumeries

Convenience and Forecourt Stores

2.05%

1.95%

Variety Stores

Home, Garden, and Auto Stores

2.05%

1.90%

Supermarket and Neighborhood Stores

Sources of Shrink PERCENT OF REVENUE

AVERAGE MONETARY VALUE IN USD

35.55% 24.54%

$1,401.68 21.47%

Other Than Organized Retail Crime

18.44% $71.75

Internal/ Employee

External/ Shoplifting

Vendor/ Supplier Loss

product would be sold in illegal stores, flea markets, and even out of personal homes. But now, all those products can be sold directly online. People can do it themselves. They don’t need a fence.” Warne points out that the Internet has also created more of a market for ORC syndicates. “There’s increased pressure from organized retail crime because online channels are making it more profitable for these groups to sell stolen goods,” she said. To make matters worse, ORC pays better in America. Survey respondents in the US reported that the average value of each ORC incident was more than $1,400, significantly higher than the value of ORC thefts globally.

The Role of Employees

The survey indicates that the tight labor pools that are challenging US retailers

Administrative Loss

Internal/ Employee

could be partially responsible for the uptick in shrink over the last five years. Warne says limited access to high-quality employees and high turnover are making it more difficult to combat shrink. “Staffing in stores is declining, making it easier for potential thieves to take merchandise,” she said. “Plus, the US has more stores per capita than most other countries, and store footprints are larger.” Keenan believes customer service is one key to combating external theft. “The number one deterrent to external theft is good customer service right now,” he said. “If you build a culture of good customer service, you deter people who are thinking about stealing. And you really have to integrate loss prevention into virtually everything you do.” Keenan recommends that brands incorporate loss prevention training into JULY–AUGUST 2018

LOSSPREVENTIONMEDIA.COM

$89.80 External/ Shoplifting

Organized Retail Crime

their customer service training. He said a bit of situational awareness training—meaning learning those behaviors that indicate a customer may be thinking about shoplifting—can go a long way toward amplifying a store’s loss prevention capabilities. Meanwhile, he says, stores should educate employees on how shrink affects them directly in order to get their buy-in on loss prevention. “In my mind, you need to teach the employee about why loss affects them,” he said. “If there is high loss, they won’t get as many hours because the company is less profitable. They may not get pay increases or bonuses either. People want to know, ‘What’s in it for me?’ Once they understand, you’ll have them as part of your LP team.” However, for some retailers, it may not be enough to train employees on how to

THE WORLDWIDE IMPACT OF SHRINK

The study found that US retailers are more likely to be plagued by external theft and shoplifting than internal theft. When comparing verticals, fashion and accessory retailers had the highest rate of shrink. spot a potential shoplifter. Warne said that in the United States, omni-channel fulfillment is providing new opportunities for items to go missing. This means retailers also have to keep a closer eye on their own associates.

Impact of Shrink

As the sources of shrink evolve, how are retail losses impacting the industry and its customers? Of course, when shrink gets out of control, it can hurt a retailer’s bottom line, particularly for smaller retailers that might not have the budget to “absorb” shrink. This can affect the company at large, as well as its employees who might see their hours cut or their bonuses and raises eliminated. Theft can also impact customers, many of whom are gradually growing accustomed to being inconvenienced due to shrink, Keenan says. “High shrink does cause inconvenience to the customer— having to remove security tags to try something on, not being able to access products without an associate’s help, or waiting in line longer as protective devices are removed or deactivated,” Keenan explained. “In the past, there was always this concern about how you were coming across to the customer. Too much security meant that maybe a store wasn’t safe. But I think our world is changing. Today, people understand. They see a security guard out front, and they appreciate it. I think today the need for security is understood by the customer, but it’s still an inconvenience.” Meanwhile, as many brands work to cut costs to remain competitive with online retailers, some are hiring fewer employees. This can also be an inconvenience to the customer when they are looking for help or waiting in long lines to check out. For those retailers being hit hardest by growing competition, Keenan emphasizes that shrink should be a priority for senior leadership—precisely because of the industry’s tight margins. “When you think about low margins and the competitive landscape, if you do have high shrink, there is a profit opportunity if you can reduce it,” he said. “All retailers accrue for shrink based on past results. If you accrue at, say, 2 percent, and you come in at 1.5 percent, all those dollars go back to the continued on page 44 LP MAGAZINE

JULY–AUGUST 2018

THE WORLDWIDE IMPACT OF SHRINK

continued from page 43

bottom line. And so when you’re looking for dollars to save, shrink is a good place to find them.” Keenan tells retailers to think of shrink as two-fold: If product is lost or stolen, it is not available to sell. You lose the cost of the product in shrink, but you also lose the margin. By protecting the merchandise, you can both reduce shrink and increase margin. “Controlling shrink impacts the business—and in so many ways,” he said. “If you don’t control shrink, it could be a pathway to going out of business.”

Technology as a Force Multiplier

As retailers grapple with these and other challenges, Warne and Keenan agree that technology is key for closing the gaps that exist around both internal and external shrink. Although the survey indicates that US retailers are doing a good

job of protecting many high-value verticals, such as consumer electronics, there is always room for improvement. When it comes to shoplifting, one of the top overall sources of shrink for US retailers, electronic article surveillance (EAS) is the leading tool and has been adopted by more than 92 percent of US respondents to the survey. After EAS, the next most popular is alarm monitoring, followed by access-control systems, exception-based reporting, and CCTV. Facial recognition was listed as the least popular loss prevention tool among US retailers, followed by RFID and public-view monitors. The fact that US retailers struggle more than their counterparts in other countries with external shrink suggests that they may be able to close the gap by embracing some loss prevention tools, such as RFID, that are still being underutilized. In the US, the RFID adoption rate of 76.5 percent is lower than in any other JULY–AUGUST 2018

LOSSPREVENTIONMEDIA.COM

country surveyed. Part of the reason might be the fact that US retailers tend to use RFID more for loss prevention and asset protection, while for the rest of the world’s retailers, inventory tracking and visibility are the dominant use case. Keenan believes that RFID simply hasn’t reached the cost-effective “breaking point” that other tools have. “I believe eventually all retailers will have RFID,” he said. “But you have to consider the cost of the tags and readers. Adding a cost to every item is not something that any company takes lightly. There must be an ROI.” Keenan says the price of RFID tagging needs to fall before it reaches widespread adoption in the US. Advances in technology may spur that process, he says, if RFID readers can, for example, be developed to provide more accurate, consistent tracking of product. Keenan and Warne both agree that public-view monitors can be a powerful loss prevention tool for retailers of

THE WORLDWIDE IMPACT OF SHRINK

In many countries and in areas throughout the US, expanding city populations and difficult economic conditions are conspiring to give employees and shoppers alike the motives for theft. Meanwhile, a shortage of retail workers and the proliferation of the Internet are creating greater opportunities for stealing products. all sizes. Smaller retailers in particular are challenged to prevent shrink with relatively few associates on the store floor, which creates greater opportunities for shoplifting, associate theft, and sweethearting. “Technology becomes critical for these [smaller] merchants,” Warne said. “Electronic public-view monitors act as a visual deterrent, keeping an eye on stores when an associate isn’t immediately on hand. At the same time, retailers are turning to lower-cost, cloud-based, remote video monitoring and analytics tools for 24/7 coverage to efficiently augment their current security strategy.” Keenan says “reverse” public-view monitors—where the screen displays the point of view of a loss prevention professional—can be even more impactful. This is especially true for experienced thieves who may doubt that a store’s cameras are working or being monitored. Meanwhile, US retailers also fall below the global average of merchandise tagged with EAS tags, both by the manufacturer or supplier and in-store. For retailers that are struggling to keep shrink manageable, upping their EAS tagging might be an easy, cost-effective way to minimize both internal and external theft. Warne points out that EAS will only become more high tech in the coming years in response to more sophisticated techniques being used by shoplifters and ORC groups. For example, EAS source tagging will mean goods arrive tagged and ready for merchandising, and smarter EAS will only alarm when tagged items exit the store. In addition, EAS systems are now being integrated with video to

provide real-time loss-event validation, alerts, and responses—rather than simply showing footage of an event that is already occurred. As thieves become savvier, retailers are deploying advanced tools and features beyond EAS that help detect and investigate theft. For example, as described in a feature article in the January–February 2018 edition of LP Magazine, Rite Aid is using the power of social media and crowdsourcing to get the public to help track down robbery and shoplifting suspects. And Warne says more retailers are starting to leverage LP analytics through tools such as cloud-based shrink management as a service (SMaaS) platforms. These systems show retailers where spikes in organized crime are happening, so they can proactively prepare and even prevent ORC crime from flourishing.

Looking Ahead

While the sheer cost of US retail shrink may seem daunting, Warne points out that it’s simply part of the business. “As long as there are retailers, we will have retail loss,” she said. The trick for retailers is minimizing the losses. As thieves become more sophisticated in their tactics, retailers have an opportunity to respond in kind. For both nationwide brands and local mom-and-pop stores, loss prevention technology can serve as a force multiplier, deterring and detecting theft in both new and tried-and-true ways. In today’s challenging retail landscape, these tools might be the difference between failure and success. LP MAGAZINE

JULY–AUGUST 2018

Read the Full Sensormatic Global Shrink Index Report “The Sensormatic© Global Shrink Index benchmarks retailer performance globally and sheds light on other factors affecting loss prevention. Knowing the state of shrink helps retailers better assess the challenges and solutions to make merchandise secure yet accessible for a better customer experience,” said Catherine Walsh, senior vice president and general manager of Tyco Retail Solutions. The statistics contained in this report highlight the magnitude of shrink’s impact on retail and affords the opportunity to dive deeper into the sources of shrink, particularly in the US, as well as the loss prevention tools to help combat loss. To view the full report’s findings, visit shrinkindex.sensormatic.com.

MEG COSTA is a freelance writer who frequently covers the physical security industry. Over the last eleven years, she has written for industry trade publications, done corporate communications for a leading residential monitoring company, and worked in public relations for a variety of security companies. She has a master’s in journalism from the University of North Texas. Costa can be reached at meg@mightypenmedia.com.

PERSPECTIVES

Stepping Outside of What’s Considered Safe Innovation Thrives When You Reach Beyond Your Comfort Zone

ecently we discussed developing a culture of innovation and how the power of open minds can lead to the greatest and most productive results—both with solution providers as well as inside the retail enterprise. But innovation is typically the product of need as much as it is an outcome of ideas and often requires reaching beyond our comfort zones. The reach and influence of the entrepreneurial spirit can present itself in many different ways, and the insights of those willing to step up and think outside the box can have a signifcant and lasting impression on our communities as a whole as well as the loss prevention industry in particular. For perspective and input, we turned to Jorge Nazer, chairman and founder of Grupo ALTO and ALTO US to discuss his thoughts on the subject.

By Jacque Brittain, LPC

Brittain is editorial director for LP Magazine. Prior to joining the magazine, he was director of learning design and certification for Learn It Solutions, where he helped coordinate and write the online coursework for the Loss Prevention Foundation’s LPC and LPQ certifications. Earlier in his career, Brittain was vice president of operations for one of the largest executive recruiting firms in the LP industry. He can be reached at JacB@LPportal.com.

What do you think it takes to create a successful startup company in retail asset protection? NAZER: Since founding our company just over ten years ago, I’ve had the opportunity to talk about this very issue with many different entrepreneurs, both in Latin American and across other latitudes. Some were successful, and some were not. But what I´ve found is that I keep coming back to the same basic principles over and over again, and I believe that those lessons are at the core of what makes a successful and growing company. First, it’s important to think big and to do so from the very beginning. As an entrepreneur, it’s essential that you don’t limit your own vision—not in size, scope, nor ambition. We founded our company as a pilot in a single supermarket in Puerto Varas, a small town in the south of Chile. The store was affiliated with Walmart, and our plan was to expand from there to other locations throughout Chile. But from the beginning we resisted thinking merely in terms of becoming partners with just one retail chain or even the idea of expanding exclusively within a single industry. We knew that we had something special with our model and felt that it could become something larger and more universal. We saw ourselves taking the company to any place and situation where theft, fraud, and malpractice were having a negative impact both on business and on society as a whole, even if that took us out of our comfort zone. We dreamed from day one of becoming international, of adding more and more companies to our network, adapting our model to different industries with different needs, and reducing losses for our clients regardless of location, activity, industry, or even language. It’s been ten years since then, and today we are reducing losses for clients not only in retail but also in logistics, health care, utilities, insurance, and even public transportation. In this first decade we have grown tenfold, and the potential is still immense. I really don’t think we would have achieved this if we had remained in our comfort zone and limited our vision. Thinking big is what gives you the passion to drive your dream forward and convey it to the people that work with you, especially when you have a deeper purpose and a meaning behind what you’re doing that transcends a specific industry, geography, or national culture.

What do you feel is the key to successfully meeting the needs of this diverse business model while managing such rapid growth? NAZER: Put people first. More specifically, put your people at the forefront of innovation and growth. We have been capable

continued on page 48

Jorge Nazer, chairman and founder of Grupo ALTO and ALTO US

JULY–AUGUST 2018

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of successfully replicating our model in different industries and deploying that model on a large scale in several countries because of an internal focus on innovation. That really drives everything that we do. Our predominant mindset has been that we consider each one of us within the company to be an entrepreneur. We go to great lengths to realize the potential of our team through a culture that emphasizes the value of ideas developed inside the company. We continually reinvest in idea development through an innovation process that allows us to capture and develop ideas from our people, our clients, and other parties with whom we become involved as part of our operations. We’ve already spent several million dollars in internal innovation projects. As a result, four of the six businesses that ALTO currently operates have sprung from ideas submitted by our own employees or by our partners, which were completely developed in-house. When you look at it this way, you realize that being entrepreneurial isn’t so much a matter of one individual but must rather be a distinctive feature of the team as a whole. To put it in other words, I cannot be the only person that embodies entrepreneurship within our business. It’s imperative to empower your people with that same vision and big thinking. You don’t need to look elsewhere for great ideas and growth opportunities; harvest them inside.

In order to succeed, you have to shake the fear of stepping outside of what is considered safe and learn to embrace the self-destructive nature of your ideas. That is the only way to truly innovate. This forces us to be creative in terms of continually finding new ways and situations in which our presence could be relevant. What do you feel is the best way for leaders to capture and maintain an innovative mindset?

NAZER: In order to succeed, you have to shake the fear of stepping outside of what is considered safe and learn to embrace the self-destructive nature of your ideas. That is the only way to truly innovate. This forces us to be creative in terms of continually finding new ways and situations in which our presence could be relevant. And, in a way, that effectiveness has played in our favor in the past. Our logo, for instance, which was initially only recognized by law offenders, is now also relevant for other groups, such as

JULY–AUGUST 2018

employees and customers. It is associated with compliance, respect for the law, and security, both in internal work environments and in public spaces. This has allowed us to take our services to places as diverse as offices and warehouses, parking lots, and, more recently, public transportation. For example, the results in public transportation have been amazing. Previous estimates placed the evasion rate in Santiago, Chile, at 50 percent of passengers during peak hours—half the passengers weren’t paying for their tickets. With the introduction of ALTO’s model, in a little over eight months, fare evasion in Santiago diminished by 20 percent, which means that 400,000 more people were paying their fares. In this case, the success of the model rests in large part on the effectiveness already achieved in other settings, such as retail stores. So rather than having a diminishing effect over time, our impact becomes amplified when approached creatively. So don’t be afraid of self-destruction. What appears to be an inherent problem with your idea in the long run could be a blessing in disguise—if you look at it the right way.

Why do you think so many startups struggle to get past the first stages of development?

NAZER: This is not an easy question to answer, but I believe that it must be asked for every startup that really wants to transcend and be successful. As an entrepreneur you have to aim to make an impact. And by this, I mean an impact on society as a whole. Look to make a change for the better that is broader than what your company does, but one you can identify with and make your own. In our case, this impact is the reduction of certain types of crimes that translate into fewer losses for our clients. That is the core reasoning behind our model, and it was certainly its inspiration from the beginning. After all, we set to tackle the root causes that explain theft, petty crime, and small offenses in many industries and locations, and those causes are deeply engrained in our culture and social behavior. By acting upon those causes, we were effectively changing things. To this day, one of the most significant and rewarding aspects of my job is seeing the ALTO model literally interrupt criminal careers before they actually become careers. By ensuring a fair and timely sanction of individuals that are just entering that path, we are tackling the problem before it’s too late for them and too costly for society as a whole. They become visible to the system in time for better reinsertion and better opportunities. This was one reason that ALTO’s model was adopted by the Chilean government in 2010 while developing a new national program for crime prevention and control. At the request of Chile’s president, I had the privilege of heading a governmental effort that took our principles to the realm of public policy. It created a precedent: a successful private endeavor could provide inspiration for improving the safety and the quality of life of the community. This is the kind of impact that I’m talking about—one that inspires both you and your people, giving meaning to your vision and crystalizing your passion. This kind of impact literally becomes fuel for your company. So as entrepreneurs, we must ask ourselves, “What impact am I making? What impact can I make?”

LOSSPREVENTIONMEDIA.COM

FEATURE

WOMEN OF LOSS PREVENTION LP LEADERSHIP REACTS AND RESPONDS TO THE RESULTS OF THE SURVEY By Jacque Brittain, LPC, Editorial Director SPONSORED BY

TO DOWNLOAD THE FULL SURVEY RESULTS, GO TO LOSSPREVENTIONMEDIA.COM/FREE-REPORTS

WOMEN OF LOSS PREVENTION

s we reported in our recent May–June edition, the Women of Loss Prevention survey offered a comprehensive look at how women view their current roles in our industry, how they feel they are perceived as industry professionals, the role they feel gender and gender bias has played in their ongoing career opportunities, and the responsibility that every LP professional has to remain accountable for their own career growth and development. The goal of the survey was to offer an objective window into the thoughts, ideas, and opinions of the women of LP regarding these key areas, open doors for additional discussion, and perhaps spark fresh thoughts and ideas on how we can best address these topics to further enhance our LP teams. Yet as important as it is to mount these critical discussions, our efforts only bear fruit if that dialogue leads to action. In this follow up to our article, we look to further digest and interpret response to the survey. As part of this process, we felt it vital to hear the voice of industry leadership, including how today’s leaders reacted and responded to the results. To help us find the answers, we canvassed loss prevention leadership to garner their insights and opinions on the subject. We compiled those responses to provide both general consensus and specific views on the ways that they see the role of the women of loss prevention, some of the hurdles that we will face in the process, the skills and resources necessary to power the transference, and how that will drive the future of the industry.

The Wheels of Change

The recent past has provided us with a massive wave of growth, changes, and challenges across the retail industry. The way that we shop, the products we buy, and even the way that we pay for goods and services are changing in ways that we never would have imagined just a few short years ago. Yet the common assessment is that this is merely a glimpse of what lies ahead. And as the gap broadens between where we were and where we’re headed, the role of loss prevention will continue to evolve as well.

But how will it change—and to what extent—remains largely unanswered. As we’ve all learned, real growth requires much more than just the passing of time and is largely the product of open minds. Each and every one of us must reach out, discover, and accept the need for change within ourselves. The complexity of the subject should remind us that there is never one side, one opinion, or one solution. A shared responsibility and a shared accountability have brought us to where we are today. This is just as true with the way that we react and respond to each other, recognizing our commonalities and accepting our differences for the betterment of all involved.

The Role of Women in the Workforce

According to the Equal Employment Opportunity Commission (EEOC), women’s presence in the labor force has increased dramatically since the mid-1960s, with 57 percent of women currently participating in the American workforce. According to the Bureau of Labor Statistics, women represented 47 percent of the total labor force in 2017. As the nation’s largest private-sector employer, the retail industry supports

over 42 million American jobs. Yet while there have been strides made in retail management positions, women hold only 37 percent of executive positions, and in loss prevention those numbers are significantly lower. Less than 6 percent of retail CEOs are women. The National Retail Federation’s (NRF) 2018 Nation Retail Security Survey (NRSS) found women account for 25 percent of LP management positions, showing slow and steady progress when compared to 19 percent in 2008. However, NRF research further indicates that 47 percent of women in retail hold a manager title, revealing a clear disparity in LP in contrast to our other retail peers. Is this a product of education? Not according to the National Center for Education Statistics, which reveals that women earn more degrees than men, with women earning more than half of bachelor’s degrees (57%), master’s degrees (59%), and doctorate degrees (53%) in the United States. Women are investing in their future, helping to raise the bar for the entire industry. “In my experience with our member companies at RILA, I’ve seen firsthand that women can find success in loss prevention, and in fact, it’s a field with an incredible path for growth,” said Lisa LaBruno, Esq.,

Participation rate for women in the American workforce 57%

60%

48%

50%

51%

52%

1996

2002

53%

2008

2013

42% 40%

34% 30%

27%

20%

14% 10%

0% 1966

1972

1978

1984

1990

Source: US Equal Employment Opportunity Commission

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2017

WOMEN OF LOSS PREVENTION

their companies are doing a good job of senior vice president of retail operations recruiting and developing women but feel for the Retail Industry Leaders Association this isn’t a consistent practice across the (RILA). “This survey supports that notion, industry and others may not emphasize as well. But with that in mind, there is no this effort as much as they should. Others question that the industry has a long way ticipation rate for women in the American workforce believe there is also disparity between to go to achieve greater gender equality policy and practice and diversity within our ranks. We know 57% in many cases. Here are some of the comments offered that those conversations are taking place 53% 53% 52% by industry leaders: now at retail companies, and it’s part of 51% our mission at RILA to help encourage 48% “The inclusion of women is critical, but and facilitate the industry’s progress from it has to start with the LP leadership. As we 42% Given these commitments, that perspective. take on the challenges in retail today and in we’re optimistic that the future of the future, we need diversity of thought and retail—one shaped by diversity of thought a mindset to look for solutions that are not 34% and inclusion—is in our sights.” founded in the status quo.”

27%

Recruiting and Developing Talent

In response to the survey results, we asked industry leaders if they felt % that retailers are doing an effective job of recruiting and developing female talent in loss prevention. While the response was mixed and most feel that significant strides have been made, most agree that an 1972 1978 also1984 1990this remains 1996 2002 area of opportunity. qual Employment Opportunity Commission In general terms, industry leadership believes that the inclusion of women in loss prevention—and more specifically leadership roles—is a critical aspect in the future of the profession. Several believe

Are we doing an effective job of recruiting and developing female talent in loss prevention? No 45%

Yes, but... 45%

Yes 10%

“Generally, I think retailers are doing a good job in this area, but there are still some pockets where there is very little female representation. I don’t think retailers are doing a great job with developing females beyond middle-management positions. There are still far too few women in senior levels of leadership in retail loss prevention. “The best leaders learn to identify talent, ask the2017 right questions to confirm 2008 2013 that talent is genuine, and then take the right steps to secure and develop talented individuals. That’s true regardless of gender or any other distinction. I believe this is a skill that many believe they have, but most lack, and that greatly contributes to the problem.”

The Blind Spot

Many women believe that a “good ole boy” network still exists in loss prevention that somehow excludes women and/or others outside of the group. We then asked industry leaders for their thoughts on this issue. While some wouldn’t specifically refer to it as a “good ole boy” network, every industry leader who responded stated they feel that while there has been a significant improvement in recent years, a subculture remains that appears to carry an exclusive bias, intolerance, misconception, or misunderstanding of others. There are those who tend to network and interact within their own group, a niche environment that lacks broad acceptance or inclusion. Most also agree that this is true throughout the business world and not exclusive to loss prevention. LP MAGAZINE

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“I’ve seen firsthand that women can find success in loss prevention, and in fact, it’s a field with an incredible path for growth. This survey supports that notion, as well. But with that in mind, there is no question that the industry has a long way to go to achieve greater gender equality and diversity within our ranks. Given these commitments, we’re optimistic that the future of retail—one shaped by diversity of thought and inclusion—is in our sights.” – Lisa LaBruno, Esq., Senior Vice President of Retail Operations, Retail Industry Leaders Association Reviewing the many comments on the subject that were made as part of our survey, it could be more specifically inferred that most women making these comments simply didn’t feel included rather than deliberately excluded. There was a general perception that little effort is being made to change certain habits, rethink some events to make them more inclusive, welcome new faces, or otherwise modify behaviors to create a more inviting environment for women.

WOMEN OF LOSS PREVENTION “During conferences and similar occasions, who is gathered together at the events?” said one industry leader. “It’s many of the same people over and over again. We don’t often make the effort to include women or newer professionals.” This points to one of the most powerful reasons for the lack of progress in this area. We all have blind spots when it comes to certain perceptions, and it’s difficult to solve problems that we don’t see or understand clearly. We’re comfortable with the status quo and don’t feel the urgency to change. This can most certainly include gender diversity. For example, many men may believe women are well represented in leadership, when in fact there are far fewer than they think. Further, many men don’t fully grasp the barriers that hold women back at work and aren’t fully aware of the need for change and as a result are less committed to the issues that women face or the hurdles that can stand in the way. By the same respect, women may make certain assumptions as well, perhaps misinterpreting a lack of understanding with a lack of empathy. Of course, there are those who simply resist change and don’t feel they should change or that they have to. There are those who prefer to hold firmly to past norms and those who choose to find fault in the behaviors of others rather than considering flaws in their own way of thinking. There are also those who use excuses as tools of destruction rather than using reflection as an agent of change. But for most of us, awareness is the first step. Whether reflecting on our own habits or learning to recognize it in others, we need to resist the trappings of finger-pointing and focus on modifying behaviors—including our own. Both men and women need to swallow the pill and get better. Here are some additional comments from industry leadership: “I don’t think our teams hear enough from the leaders in our industry. We have to make people feel more than included. We must give them a sense of belonging.” “I do think a good ole boy network still exists. As one of the few women in leadership, when asked to participate in an industry function, lead a session,

or comment for an article, I’m usually relegated to a subject matter considered traditionally more female.” “I wouldn’t refer to it as a ‘good ole boy’ network; however, I think that there exists a tight network that has a certain standard that they follow, and breaking into that network can be difficult regardless of gender. It’s important leaders make decisions with their eyes and their minds open. It’s changing, but we still need to keep moving in the right direction.”

Leaders Stepping Up

Promotions and other advancement opportunities should always be based on merit, productivity, commitment, potential, flexibility, ingenuity, and other performance-based factors. Overcoming disparities requires that we develop strategies that focus on engaging all talented individuals in growth opportunities regardless of gender or other nonperformance issues. When asked what steps retailers can take to develop female talent for LP leadership roles, industry leaders offered many suggestions: ■■ Create a forum for minority and female leaders to share their concerns, successes, and needs with a direct pipeline to senior leadership. ■■ Set specific goals and identify measurements of success. Accountability has to start from the top and reach every level. ■■ Take personal accountability to identify talent and assign mentors. ■■ Look for developmental opportunities that put everyone in the mix for promotions. ■■ Educate your talent on both linear and nonlinear career paths. Stretch assignments both within and outside the department. ■■ Support them in industry developmental programs like the Loss Prevention Foundation and Wicklander-Zulawski. ■■ Support diversity training for leaders at every level. ■■ Take real steps to ensure that hiring, promotional, and developmental decisions are based on merit, potential, and commitment, and hold leaders accountable. JULY–AUGUST 2018

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“We sponsored this survey as it provides a unique and objective window into the ideas and opinions of the women of LP regarding key areas related to their roles. We have women in every aspect of our organization, from engineers to product managers, from sales to marketing leaders. We’re also seeing many LP decision makers and pyramid heads in retailers’ organizations, so we wished to recognize and support the outstanding women in the industry.” – Catherine Walsh, Senior Vice President and General Manager, Tyco Retail Solutions Use depth charts, forecasting plans, and other initiatives that serve to support our talent. ■■ Conduct more career conversations with top talent to ensure they know there is potential for them for next steps. ■■ Support opportunities for additional exposure by putting talent out front as speakers, presenters, and subject-matter experts at conferences and events. ■■ Denounce double standards for behavior, including and especially in social situations. ■■

WOMEN OF LOSS PREVENTION ■■

Be intentional and purpose-driven in the effort.

Owning It as Individuals

While it’s important for retailers to step up and support their teams, no one, regardless of gender or any other nonperformance trait or characteristic, should expect their company to do the legwork for them. Ultimately, we are all responsible for our own growth and development as well as our actions, decisions, and performance. Even when we’re good at what we do, that doesn’t necessarily mean that we will excel—or even be successful at the next level. Promotions always involve additional responsibilities and different skill sets. Similarly, tenure doesn’t necessarily translate into experience. For example, if someone performs the exact same job for five years without looking for ways to develop or grow, do they have five years of experience or one year of experience repeated five times? Every true leader must be able to see this in themselves and be able to identify those same abilities in others when making these decisions, just as

every individual must refine their skills as they climb the ladder. Each one of us needs to find our place. We must learn to understand our own strengths and opportunities, accept our limitations, embrace the gifts we have to offer, and determine how we want to use them. We think differently. We learn differently. We apply information based on our own personal experiences. We must be thoughtful, respectful, open-minded, and patient enough to make the best decisions for ourselves, our families, and our careers. We asked leaders what advice they would give women or anyone else wanting to get ahead: ■■ You have to be good at what you do. That cannot be taken for granted. ■■ Capability is the bottom line. Mission accomplishment, leadership, inspiration, and communication are critical attributes, not seniority. ■■ Be engaged, passionate, and authentic. Take advantage of opportunities and showcase your talent. ■■ Be a sponge for education and learn to stand on the shoulders of others through programs like the industry certifications.

Be flexible, mobile, confident, assertive, and persuasive. Learn to take calculated risks. ■■ Diversify your interests. Explore every opportunity. Be open to everything. ■■ Distinguish yourself, volunteer for assignments that no one else wants to take, and learn as much about the business as possible. ■■ Demonstrate leadership, respect your partners and peers, and show that you can be successful. ■■ Intellectual curiosity, guts, and professionalism are next-level skills. Know your business and be able to speak to it. ■■ Express your desire and ambition for career advancement. Don’t assume that others are aware of your career aspirations. ■■ It’s never wise to blindly accept the status quo. The world is always changing, and we have to be willing to change with it. ■■ Work harder than those around you and self-market in a way that demonstrates that ability. ■■

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WOMEN OF LOSS PREVENTION From LP agent to director, you have to believe in yourself and your skill sets. This must come from you because it’s up to you. Some additional comments from industry leaders included: ■■

“Opportunities to get ahead should always be based on merit, but sometimes it’s also our ability to impress those qualities on others and voice our interest and desire to get ahead. I agree that there are times when a promotion might not be perceived as fair, and surely there are times when they’re not. But it’s also important that we’re willing to reflect on ourselves and try to figure out what we might have done differently or better. These decisions aren’t made on the spur of the moment, and attempting to narrow it down based on gender or any other nonmerit distinction can also be a self-serving rationalization rather than a true factor in the decision process.” “There is no doubt that where you work and for whom you work will have an impact on your opportunities for advancement. But you control what you do and how you do it. Everyone needs to do the job, be present, show up, go above and beyond, own everything you do for better or worse, reject entitlement, embrace inclusion, be a team player first, and pick your battles. If you embrace these simple rules, gender shouldn’t matter.”

Mentorship Programs

When asked whether organizations, or the industry in general, should support mentorship programs, industry leaders made it very clear where their thoughts lie. Every leader we asked offered an unequivocal “yes.” This subject sparked significant discussion from industry leaders as they reflected on the importance of mentors and sponsors as part of their own career development and advancement. Several named specific individuals, while others chose to offer their own experiences. What was most clearly offered was that our industry leaders strongly believe in the value of these programs and recognize the value of mentors and sponsors as part of career development. “I’ve had mentors and sponsors in my life that knew more about my potential

“Our entire industry owes a rousing debt of gratitude for the success that the diversity of experience, talent, thought leadership, toughness, and vision our women in LP bring to the LP community. We need to continue to mentor and encourage our emerging women leaders upward into the management ranks, where they can make a greater difference and continue their professional development.” – Bob Moraca, MBA, CPP, CFE, Vice President of Loss Prevention, National Retail Federation than I did. Every organization should have a program, and they should invest time and money into it.” “I wouldn’t be where I am today if it weren’t for those that saw some raw potential in me, challenged me, counseled me, and stuck with it. If the company you’re with doesn’t have a formal process, do it informally—or more importantly, lobby them to implement one. Having a mentor is absolutely critical in today’s relationship-driven world.” Further, there was a consensus that the women of loss prevention should seek out all types of mentors, underscoring the importance of JULY–AUGUST 2018

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having mentors from outside the loss prevention profession as well. Women should seek out both men and women to serve as mentors, sponsors, and “life-skill coaches,” and should also search for opportunities to serve as mentors themselves. “I was very excited to review the results of the women of LP survey and your findings,” said Bob Moraca, MBA, CPP, CFE, vice president of loss prevention with the National Retail Federation. “The NRF loss prevention community has been supportive of the women in LP movement for close to two decades. With strong female leadership, we have proudly developed several programs to enhance the growth of women in the loss prevention profession. Over the years we have developed a mentoring program, hosted women-centric professional development calls, and NRF proudly hosts the largest gathering of women in the industry at our ‘Women in LP Luncheon’ at NRF PROTECT every year.” Moraca added, “Our entire industry owes a rousing debt of gratitude for the success that the diversity of experience, talent, thought leadership, toughness, and vision our women in LP bring to the LP community. We need to continue to mentor and encourage our emerging women leaders upward into the management ranks, where they can make a greater difference and continue their professional development.”

The Value of Diversity

Diversity provides our country with its unique strength, prosperity, and resilience. By recognizing and embracing our human differences, we learn to better understand each other and the unique contributions that those differences can provide. These same attributes serve us in the workplace as well, with the rich and varied individual characteristics of people and the wide spectrum of traits that make up who we are creating a positive and nurturing work environment that maximizes the potential of all employees. With the opportunity for different insights, varied opinions, and better solutions, gender diversity is the absolute

WOMEN OF LOSS PREVENTION lifeblood of retail and is critical as we look for the best ways to serve and interact with our customers and employees. As the blending of our society continues, there is an ongoing need to modify our way of thinking to effectively deal with the issues of communication, tolerance, adaptability, variety, and change. Unfortunately, a majority of women who participated in the survey (72%) believed that there are gender biases that remain in the loss prevention industry today. And while most LP leaders feel that there have been significant improvements, most also believe that those gender biases remain. Gender biases do exist across every aspect of our society. Men and women think differently. For the most part, we’re raised differently. We have different expectations, social norms, habits, and biology, and that just scratches the surface. But as is true with every other aspect of our lives, we need to learn to better embrace our differences rather than allowing those differences to create a gap between us. Diversity encompasses not only how we perceive others but also how we perceive ourselves. Those perceptions will have a direct impact on how we perform individually and how we interact with each other. Our goal should be to build a culture of respect where the attitudes and actions of people will encourage mutual understanding, creating an environment where people of all attributes can be valued and successful in the workplace.

Venus and Mars

There may be a million ways to celebrate our differences, but there are a million and one reasons to praise how we are the same. The world is changing, and the rules are changing along with it. This is a time of tremendous evolution in almost every aspect of who we are and what we do. It’s true that there was a time when many of the lines were much clearer. But it’s just as true that some of those lines were wrong, unfair, and unjust. By the same respect, the door has to swing both ways. Throughout the

“As a woman who has worked in loss prevention the majority of her career, I appreciate the opportunities that have been afforded me and the ability to advance my career through my hard work and determination. This Women of LP project was perfectly timed for all to gauge where we stand in the opportunities afforded women. Plus, the professional way the survey was crafted, distributed, and communicated made supporting this project that much easier.” – Kris Vece, LPQ, Director of Client Relations, Protos Security survey, there were many comments made by women that might also appear demeaning and inappropriate to men. For example, we shouldn’t make blanket statements like, “Men are better than women in leadership roles.” However, we also shouldn’t make blanket statements like, “Women make better interviewers than men.” The latter can be equally unjust and inappropriate, widening gaps rather than closing them. LP MAGAZINE

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Everyone wants to be respected. We want to be treated fairly and as equals. If we want to create an environment in loss prevention that’s inclusive for everyone, we have to be open-minded, but we also must be patient and understanding. As we blend as a country, we are also blending on social, personal, and professional levels, and all of us have to play our parts. We must face these issues head-on and find solutions that benefit us all.

Moving Forward

Complicated problems aren’t typically solved with a survey and a single discussion. We have to increase awareness in a way that’s fair and objective, hold meaningful conversations that address the real issues, and move to action in a way that’s positive and productive. It’s truly been an industry effort to bring us to where we are. From those who took the time and effort to help us construct our survey, to the incredible women who shared their thoughts and opinions, to the tremendous industry leaders and sponsors who offered their guidance and support, and to all who have voiced their commitment and passion to the women of loss prevention, you have our gratitude. At the end of the day, we all want the same thing. We just need to find the best way to get there.

EDITOR'S NOTE: To download the full survey results, go to LossPreventionMedia.com/free-reports. JACQUE BRITTAIN, LPC, is editorial director for LP Magazine. Prior to joining the magazine, he was director of learning design and certification for Learn It Solutions, where he helped coordinate and write the online coursework for the Loss Prevention Foundation’s LPC and LPQ certifications. Earlier in his career, Brittain was vice president of operations for one of the largest executive recruiting firms in the LP industry. He can be reached at JacB@LPportal.com.

ASK THE EXPERT

Five Tips to Mitigate Retail Physical Security Threats What supplemental security measures can be provided to increase a retail facility’s ability to protect against threats? Our world is full of threats both external and internal. Most facilities have addressed access control and the securing of main doors, but those should be measures of last resort. There are steps you can take—some that you may not have considered—to mitigate the threat before it arrives at your front door. Supplemental security measures, such as securing perimeter entrances and installing devices to warn when secondary entry points are compromised, can increase your ability to protect your environment against threats in retail locations, distribution centers (DCs), or the corporate campus. Examining security and safety from a holistic viewpoint can help prevent threats from materializing. You can enhance life safety and security measures on your property with the addition of cutting-edge technology that works in conjunction with your existing systems, such as: 1. Delayed-egress devices with alarms, 2. Perimeter fencing emergency exit and access control, 3. Door-prop alarms, 4. Tailgate-detection systems, and 5. Lockdown systems.

How are delayed-egress devices useful in a retail environment? Delayed-egress devices in retail facilities can protect assets. By installing delayed-egress exit devices, you can prevent unauthorized exits and redirect foot traffic. When combined with electric latch retraction and automatic door operators, staff can move freely throughout the facility while controlling unauthorized foot traffic. Where life-safety codes restrict traditional locking of certain exits in perimeter fencing around DCs or some retail locations, weatherized delayed egress may be an acceptable application, depending on the authority having jurisdiction. Weatherized delayed-egress systems emit a loud local alarm encouraging a person to move away from the area while alerting staff that someone is attempting to exit. This provides the staff time to react before the exit unlocks and helps to avoid a dangerous situation. This type of system can be tied into a fire alarm override, providing safe, delay-free exit during a fire emergency.

How can retailers enhance their existing door security? Supplementing existing door security with door-prop alarms is one way to enhance your security environment. A door left propped open, even for a few seconds, can provide an

JULY–AUGUST 2018

Interview with Ken Kuehler Kuehler began his career in retail loss prevention with Reebok before moving to Detex nineteen years ago where he has held positions of national account manager, marketing manager, and director of marketing and sales. Kuehler earned a bachelor of science degree in criminal justice from Texas State University and lives in Central Texas near Detex headquarters in New Braunfels. Kuehler can be reached at kk@detex.com.

easy access point for threats. Door-prop alarm hardware will alert personnel to an unsecure door via audible alarm while sending an alert to any central security monitor. It helps prevent unauthorized personnel from entering and assets from exiting the premises.

Is tailgate detection useful for retailers? Tailgate-detection technology can be used to control access in a variety of retail environments, allowing only authorized personnel access to restricted areas. Tailgate-detection systems will sound an alarm if someone attempts to follow an authorized employee through a secure door. It will also help secure areas that may contain sensitive material such as personnel records, expensive equipment such as computer rooms, or cash-handling rooms.

What is the safest, fastest, easiest, and most cost-effective means of locking down a retail facility? There are many answers; however, one way that has been overlooked by many security-door consultants is the use of panic exit devices with electric dogging. “Electric dogging” allows all locking devices to be activated by one or more control switches that can be located in strategic areas of the building to lock doors in case of a required lockdown. When electric dogging is applied to entry doors, it removes the need for a staff member, perhaps in the height of a crisis, to remember where the key is and how to lock the doors. Electric dogging can allow doors to be dogged for push-pull operation during specific hours and automatically revert to secure mode at a preselected time, locking the doors to entry while allowing individuals leaving to exit.

What other tips can you give a prospective retailer looking to enhance their current security technology? Ensuring all the pieces of technology will work together is key. Manufacturers and some dealers will create a kit to fit your application that includes best-in-class products along with wiring and riser illustrations to fit your application. Be careful of specification writers who supply only a list of products without a wiring diagram or information on how the items are integrated together. Failing to install the items correctly can create years of headaches and wasted money. Ensure the supplier understands your needs and offers time-tested products. Additionally, make sure they can support the installation with wiring diagrams, riser illustrations, and technical support. LOSSPREVENTIONMEDIA.COM

SOLUTIONS SHOWCASE INSTAKEY

Blending Lock Manufacturers to Optimize Savings on Lock Changes

ometimes the best solutions are unconventional. To InstaKey® Security Systems, unconventional solutions can be a result of working with clients to develop a means to organize and control locks, keys, and associated expenses in the most effective and efficient way possible. In this particular case, InstaKey provided a solution that combined their brand of locks with another manufacturer’s locks to offer their client the security, convenience, and control they needed in their stores at a lower cost.

Opportunities at Bob’s Discount Furniture

Six years ago, Patrick Burns, CPP, LPI, joined the corporate team at Bob’s Discount Furniture as the vice president of loss prevention. Burns was brought on as an experienced loss prevention professional and was tasked with ensuring that the company’s LP programs were indeed contributing to profitability. One of the first things that Burns looked at was the company’s key-control policies. There, he identified some opportunities for improvement. The big-box format at Bob’s Discount Furniture was different from the specialty retailers from his past, with additional exposures to loss at receiving docks, a cash office, and a number of other areas to be considered in physical security. At the time of Burns’ arrival, thirty-nine locations had opportunities to improve key Patrick Burns control and organization of keys and key

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Not only does Bob’s Discount Furniture benefit from savings on the front end with the combination of lock manufacturers, but also there are the savings on the back end with the restricted keys and rekeyability. Bob’s Discount Furniture saves approximately 75 percent with the solution that InstaKey developed. holders. It was customary to have a locksmith come out to locations that needed lock changes to drill out locks and install new ones. The expenses associated with locksmith call outs were high as can be expected in environments with high employee-turnover rates. Burns, experiencing these challenges before, had an idea for a solution, having partnered with InstaKey in the past.

Partnering with InstaKey

Burns knew there was a way to spend less on lock changes and improve key control to further reduce exposure to loss. So he contacted InstaKey to see if they had applications that big-box stores could also benefit from. InstaKey worked with the Bob’s Discount Furniture team to first get an understanding of Bob’s Discount Furniture

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SOLUTIONS SHOWCASE INSTAKEY standards to then be able to architect a key system that would fulfill the needs of the business for cost control and security. The system that was developed included InstaKey’s small-format interchangeable (SFIC) locks for more sensitive access points, like the front door, the cash office, and other sensitive areas. These locks were chosen for those access points because they are on restricted keyways for increased security. For other access points, InstaKey offered to fulfill a nonrestricted brand of interchangeable cores at a lower price than the InstaKey brand cores. This blend of brands and lock types allowed Bob’s Discount Furniture to keep tighter control on costs and security while having a sole-source provider for their mechanical lock needs. “InstaKey really made partnering with them a no brainer. From the process of understanding our standards and specific needs to the development-review process to getting the new key system installed. InstaKey took care of everything and made it so easy—just like they did for me before,” explained Burns.

“InstaKey really made partnering with them a no brainer. From the process of understanding our standards and specific needs to the development-review process to getting the new key system installed. InstaKey took care of everything and made it so easy—just like they did for me before.” – Patrick Burns, CPP, LPI, Bob’s Discount Furniture

Training for Key-Holder Transition

After the new key system was installed, Bob’s Discount Furniture’s loss prevention team was trained on best practices for KeyControl® by InstaKey. Part of the training helps leadership develop policies and practices that stress the importance of getting keys returned after key-holder transition. When keys are returned, the need to rekey is eliminated because the keys are restricted. Restricted keys are not available on the open market, so keys cannot be copied at a local hardware store or by a locksmith. This practice alone has allowed Bob’s Discount Furniture to significantly reduce the number of times a rekey is needed, reducing costs. When a key is not returned and a rekey is necessary, the user-rekeyable locks do not require a locksmith to come out and make the change. It can be done easily by on-site personnel, with just the turn of a key. Rekeys are also performed more quickly, reducing exposure.

Secure Web-Based Software

Organizing keys, key holders, and access points has been made easier and more transparent with the use of InstaKey’s SecurityRecords.com®, a secure web-based software that uses unique serial numbers from the restricted keys to keep track of who is in possession of what keys and what those keys open. This makes for quick and easy auditing when the time comes, and there’s no more uncertainty about what might be vulnerable. Not only does Bob’s Discount Furniture benefit from savings on the front end with the combination of lock manufacturers, but also there are the savings on the back end with the restricted keys and rekeyability. Bob’s Discount Furniture saves approximately 75 percent with the solution that InstaKey developed. Six years later, Bob’s Discount Furniture has grown by over sixty locations, and at least seven more stores will be opening by the end of 2018.

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LPM DIGITAL

Facing Crises

Kelsey Seidler Seidler is managing editor, digital. She manages the magazine’s digital channels that includes multiple daily e-newsletters featuring original content and breaking news as well as pushing content to various social media platforms. Seidler recently earned her master’s degree in technology and communications through the University of North Carolina’s School of Media and Journalism. She can be reached at KelseyS@LPportal.com.

ollowing are a few article summaries that can provide you with a small taste of the original content available to you every day through our daily digital offerings, which are offered free through LossPreventionMedia.com. In addition to our daily newsletter, a comprehensive library of original content is available to our digital subscribers at no cost to you. Visit our website to gain access to all of our content. You can also follow us on Facebook (search LP Voices), Twitter (@LPMag), and LinkedIn.

Have You Deleted Your Facebook Account Yet? By Bill Turner, LPC

Publishing experts tell us that, in retail loss prevention, cyber security and data protection are hot topics that we should cover regularly. Our experience tells a slightly different story. Historically, articles on these subjects have not typically “rung the bell” with our readers. Okay, you say, “Not a huge topic of interest for me.” But wait. You need to read this article. Now it’s Facebook at the center of a huge and disturbing data-breach crisis. What happened, and what are the ramifications? It all began when it came to light recently that Cambridge Analytica, a political data firm hired by President Trump’s 2016 election campaign, had gained access to private information on more than 50 million Facebook users. The firm claims to offer tools to identify personalities of Americans and influence their behavior. Its clients have ranged from Mastercard to the New York Yankees to the Joint Chiefs of Staff. According to the New York Times, the data collected from Facebook included details on users’ identities, friend networks, and “likes.” Facebook has said that “no passwords” or sensitive information was taken. Facebook is insisting that the Cambridge incident was not a data breach because the platform routinely allows researchers to access user data for academic purposes. Facebook users consent to this when they open an account. Instead, Facebook maintains that Cambridge crossed the line and broke the rules when they provided the information to a political consulting firm. Cambridge Analytica originally denied that they had obtained or used Facebook data but changed their story a couple of weeks ago. They now claim they deleted the information two years ago when they realized they were LP MAGAZINE

in violation of Facebook’s rules. Facebook also said it had demanded and received certification that the data had been destroyed. But now Facebook says it recently received reports that not all the data was deleted. The Federal Trade Commission is investigating whether Facebook violated a 2011 consent agreement to keep users’ data private. Some members of Congress have asked for a hearing on Facebook’s ties to Cambridge Analytica, and a British Parliament committee has asked Facebook founder and CEO Mark Zuckerberg to appear before them over the incident. Rumors are circulating that hundreds of thousands of Facebook users are deleting their accounts, although Mark Zuckerberg says he has not seen a “meaningful number” of accounts being closed. To make matters worse, it has been revealed that a watchdog group warned Facebook in 2011 that relying on developers to follow information rules in some cases was not enough. Regular readers of the LPM Insider know that we talk a lot about crisis management and crisis communication basics. Some of those fundamentals include: ■■ Have the most senior executive possible act as the company spokesperson—and quickly. ■■ Immediately respond to major issues with candor and openness. ■■ Show concern and empathy. ■■ Closely monitor the developing situation on all forms of communication: social media, television, and radio—and know what’s being said. So how has Facebook handled this crisis, and how effective has their initial response been? Facebook has tried to stay out in front of the story and has issued multiple press releases in anticipation of increasingly negative news stories. Yet, initially, Mark Zuckerberg was completely silent. He even failed to show up at a highly publicized question-and-answer session for Facebook employees concerning the incident. Even Sheryl Sandberg, Facebook’s highly visible COO, remained silent. Their silence was a very serious strategic mistake. Zuckerberg finally took to social media last Wednesday to update the Cambridge Analytica situation from the company’s perspective and say he was “really sorry” for the “major breach of trust.” Was it too little, too late? Facebook and Zuckerberg missed a golden opportunity to immediately connect with its employees and users in a forthright and candid manner. That practice is a crisis JULY–AUGUST 2018

management 101 basic. It’s amazing how many of the country’s most powerful and successful companies still miss those basics. Don’t let your organization be one of them.

In Memoriam: The Loss Prevention Community Remembers Rob Shields By Loss Prevention Media Staff

Rob Shields, a long-tenured and highly respected member of the loss prevention community, passed away suddenly and unexpectedly on Wednesday, May 16. A friend and mentor to many across the industry, Rob had a passion for helping others within the community and across the industry through various charitable efforts to include local food pantries, various church-related functions, and the Loss Prevention Benevolent Fund, where he served as treasurer since the inception of the charitable organization directly benefiting those who have served the loss prevention industry. Rob is survived by his wife, Joanne, and daughters, Cassidy Rob Shields and Madison. Serving as director of global loss prevention field operations, Rob spent more than twenty-one years with Staples. He joined the Staples team in April of 1997 after spending ten years with CVS Pharmacy, taking on positions with additional responsibility throughout his tenure with the company. His passion for serving both his company and his team and his support for the entire loss prevention community will be warmly remembered by those that knew him. “Rob was one of the most generous human beings I’ve ever met,” recalled one colleague. “He was more than just a mentor—he was a close friend to so many that worked with him and for him over the years. He was always there for support and guidance and had a deep passion for the loss prevention industry and those who served alongside him. He will be deeply missed.”

Smart Investigation Practices When It Comes to Sexual Harassment in Retail

4 Steps for a Swift and Effective Investigation of Sexual Harassment in Retail By Garett Seivold

The daily work of retailers typically seems a world apart from the goings-on in the entertainment industry or government, but #MeToo movement reverberations are being felt well beyond Hollywood and Washington, DC. As victims find their voices across industries, behavior that may have remained buried in the past is now more likely to be the subject of complaints and forced into the light. Are companies ready? Not according to their lawyers. In a February 2018 poll, 46 percent of outside counsel surveyed said employers aren’t taking workplace sexual harassment training, prevention, and response “seriously enough.” “The #MeToo movement is an important wake-up call to corporate America,” said Stephen Hirschfeld, CEO and founder of

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the Employment Law Alliance, which conducted the survey of 382 attorneys. “Company directors and executives need to understand that this isn’t a fad.” Retail companies face greater risk than most firms do. In an October 2017 study by Rand Corporation, one in five workers said they face a hostile or threatening environment at work, which can include sexual harassment and bullying. And retail workers and other workers who have to face customers endure a disproportionate share of the abuse, according to the survey. In a highly publicized environment, as today’s world surely is, sexual harassment carries additional reputational risk for retailers. Additionally, the threat of legal action is ever present. In March, for example, a New Jersey federal judge rejected a motion by a national auto parts retailer to dismiss a worker’s sexual harassment suit. The judge ruled that the statute of limitations’ clock started to tick when the worker received a right-to-sue letter from the EEOC, and not when the violations occurred. The retail worker is alleging she was subjected to sexual harassment at three different locations as she was moved from store to store following complaints of harassment. The alleged harassment included unwanted sexual advancements and a coworker telling customers she was a prostitute. Overall, sex discrimination, which includes allegations of sexual harassment, is the third-leading cause of discrimination claims, accounting for roughly 30 percent of claims, according to EEOC data.

The climate surrounding sexual harassment has employers on edge, according to their lawyers. More than 70 percent of outside counsel report that their clients are worried about a “rush to judgment” when harassment complaints are made. Additionally, 51 percent of company leaders feel some measure of pressure to publicize results and disciplinary actions following a misconduct investigation, according to the survey of outside counsel. Clearly, the stakes are high—and perhaps higher than ever given today’s environment—for getting a sexual harassment investigation right. So how can a retailer reduce the likelihood that employees will criticize the sufficiency of an investigation? Not every employee allegation of sexual harassment or misconduct is legitimate. Some complaints are proved to be unsubstantiated and may be made in an effort to avoid disciplinary action or out of personal animus. Even when legitimate, an employee who alleges harassment may not be satisfied with the manner in which an investigation is conducted, and he or she may dispute the outcome. In short, there are plenty of reasons why an organization’s investigation process may be to be called into question—or be subject to lawsuit. One reason investigations shouldn’t draw fire, however, is because of a lack of clarity and communication with the complainant. Anxiety typically accompanies complaints of sexual misconduct, and in the absence of communication, complainants are likely to assume the worst about an investigation—even if the security organization is following investigation best practices. Some causes for dispute are hard to avoid, but a failure to communicate with complainants is an unforced error. From experts in security and human resource investigations, we examine four LOSSPREVENTIONMEDIA.COM

PRODUCT SHOWCASE steps organizations should take to give stakeholders confidence that a company is committed to swiftly and effectively investigating allegations of sexual harassment in retail. 1. Clarify. One common source of complaints about an organization’s investigation protocol is ambiguity over whom to report sexual misconduct complaints to and who is in charge of investigating them. When complainants are confused about how things are supposed to play out, it is easy for them to think they aren’t getting a fair shake. That is one reason why it is common for settlements in legal actions to demand defendants clarify processes for handling various types of sex discrimination. Organizations may find it advantageous to write, disseminate, and educate its stakeholders on policies and procedures covering: ■■ The name or title, office address, email address, and telephone number of the individual(s) responsible for taking action, including clarification of any differences in the role of individuals with responsibility to take action on complaints; ■■ Procedures for adequate, reliable, prompt, and impartial investigation of all complaints, including the equal opportunity for the parties to access, review, and present witnesses and other evidence; ■■ Reasonable time frames for the major stages of the investigation; and ■■ A requirement for written notification to the parties of the outcome of the investigation, hearing, and appeal. 2. Act quickly. Make sure your company’s response to a sexual harassment or misconduct complaint is timely. It helps to show the employee that you take the matter seriously and instills confidence in your investigation process, say experts. It’s also important because court cases, particularly “hostile workplace” claims, suggest that companies often face legal woes because they go “on hold” as they wait for results from an investigation. Supervisors and managers must know they need to respond fast—within forty-eight hours of receiving a complaint. If they don’t, a company may open itself up to charges of negligence for leaving an employee exposed to the

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harassment. Failing to act quickly also makes it appear that your company is trying to discourage complaints. It’s important to notify the complainant of his or her options to avoid contact with the alleged perpetrator to protect complaining parties during investigations. 3. Act consistently. Investigations against high-level managers should follow the same process as one against a store associate. If an employee complaining of sexual harassment believes they’ve seen inconsistency in enforcement in the past, they are more likely to raise complaints about the handling of their case. 4. Confirm accuracy. Complaints lodged against investigations are less likely when employees have confidence that investigators are on the same page as them regarding what they said took place. So following the taking of a complaint, investigators should get the employee to confirm the accuracy of reports. Go over the complaint with him or her and ask if the report leaves anything out. Document the employee’s agreement with the version of events as documented in the report. Remind the employee that he or she should report any further incidents and document that the employee received this reminder.

July 19, 2018 Cyber Security Summit: Seattle The Westin Seattle, WA cybersummitusa.com August 5–8, 2018 Restaurant Loss Prevention and Safety Association 39th Annual Conference Hyatt Regency, Dallas, TX rlpsa.com August 29, 2018 Cyber Security Summit: Chicago Hilton Chicago, IL cybersummitusa.com August 29, 2018 GRAORCA Retail Crime Conference Hyatt Regency Downtown Atlanta, GA graorca.org

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