Doug Henze| Crain’s Custom Media
With the holiday shopping season in full swing and sales at their annual peak, training employees to be on guard for fraud is key for retailers.
In addition to being alert to customers layering stolen apparel under heavy coats or slipping items into shopping bags, stores need to protect themselves against high-tech thefts.
“Businesses that accept electronic payments have targets on them,” said John Mayleben, senior vice president of technology and product development for the Michigan Retailers Association. “Bad guys want to get into their systems to get data and do bad things with it.”
Especially with seasonal employees coming on board, retailers should reinforce the practice of logging in on secure networks, he said.
Mayleben recalled a case where a representative from a Michigan retailer used public Wi-Fi to check on company sales and inventory from an offsite location. Criminals captured electronic credentials and installed a virus that stole customer credit card numbers.
“It was in the hundreds of cards that were impacted,” Mayleben remembered.
Handling credit card transactions at stores also can pose problems for store associates. Training them to check signatures on cards and to use only phone numbers provided by credit card companies when verifying cards that won’t swipe can prevent theft.
Criminals sometimes scam store clerks by getting them to call phony numbers on the back of credit cards they manufacture, Mayleben said.
“The number on the card is answered by the guy’s friend and (the thief) walks out with a 75-inch flat screen TV,” Mayleben said.
Stores also need to monitor employees to make sure they’re not using skimmers or smartphones to steal customer credit card data, he said.
While technology has expanded the range of retail crimes, old-fashioned smash-and-grab-type crimes are still in fashion.
“We’ve seen the recent phenomenon where it’s a flash mob, organized on social media,” said William Hallan, chief operating officer and general counsel for the MRA. “They’ll come in and wipe out a whole store.”
In training materials aimed at helping its members discourage theft, the MRA offers several suggestions, including:
- If items are sold in pairs, display only half the pair;
- Acknowledge all customers;
- Never leave a store or a department unattended;
- Don’t allow stocked items to block views; and
- Lock registers when not in use.
“It’s a huge issue,” Hallan said of retail fraud.
The MRA estimates retail crimes resulted in nearly $90 million in losses in 2012.
Nationally, the figure is $30 billion, according to the National Retail Federation.
The problem goes well beyond teen-agers looking to score free merchandise, Hallan said. It’s become a staple of organized crime.
“They’re given a shopping list of times that can be stolen and easily resold,” he said, adding that razor blades, baby formula and other items not behind counters are easy targets. “It’s a premeditated crime.”
Hallan sits on Michigan’s Organized Retail Crime Advisory Board, created in 2013 as part of a law that created tougher penalties for people who steal merchandise with the intent to resell it. That’s now a five-year felony, with additional fines and restitution, he said.
The advisory board is creating a database, which it expects to be complete by Jan.1, to provide a shared resource for law enforcement, retailers and others. Creating public awareness also is a goal, he said.
“Consumers should care about retail crimes,” he said.
While retailers want to get the word out about retail crimes, they don’t typically share their security measures with the public.
For example, Minneapolis-based Target Corp., the victim of a massive credit card data breach in 2013, issued the following statement in regards to its safeguards:
“Our assets protection team members are trained to maintain a safe shopping environment, protect against theft and monitor suspicious activity. We do not provide specifics on our security procedures because doing so could compromise their effectiveness and inhibit our ability to provide safe stores for our guests.”