Shoplifting seems to be theme of the week.  Two articles in my local newspaper on the same day caught my eye.  The first was two guys that stuffed merchandise into backpacks while 60 police officers were in the store helping 155 children pick out clothes and school supplies for the annual “Shop With a Cop” event.   Evidently their theory was the officers would be too distracted to notice.  What they also counted on was the store security personnel also being distracted.  They weren’t.  Both went to jail charged with theft.

In our training classes, we often discuss customer service.  It is ALWAYS about listening to the customer and then delivering more than they expect.  Another topic we discuss with our clients is how relevant their rules, policies, and procedures are in the way they do business.  Do they make sense?   Very often, routines are entrenched that have become obsolete or no longer applicable in the marketplace.

A friend of mine who knows that I consult with retailers and restaurants on loss prevention sent me this e-mail below on an experience he had at his favorite fast food (QSR) restaurant.  Well, I guess I should say what used to be his favorite lunch spot.  Unfortunately, the situation he describes is not uncommon, and generally falls into the “unintended consequences” category.  The manager made some decisions, probably for good reasons, but with disastrous effects.   My friend does a pretty good job describing the various effects of those decisions on losses and profitability.  There was no presence of the usual suspects on profit drains – theft, manipulation, fraud or other crime.  It simply is poor management, but profit draining just the same.  Upset customers will give feedback on poor operations – they won’t come back.

I attended the 31^st annual conference of the National Food Service Security Council in St Louis, MO this past week with over 200 fellow professionals that support the restaurant industry with security, safety, risk management or products and services.  It was great to see old friends and make new acquaintances.

How would you like a 5% increase in your retail or restaurant business?  According to an article in The Street, fraud is responsible for an estimated 5% drain on profitability.  Stop fraud and theft directed at you from several sources and realize an increase in profitability.  Loss Prevention Professionals and Fraud Examiners will certainly verify the negative effects of theft and embezzlement in business at a median loss of $160,000.  When applied to the 2009 gross world product, the losses to fraud are estimated at more than $2.9 trillion! That’s trillion!  Even I had a double take at that number.

When a $100 bill is tendered in a fast food (QSR) environment, the cashier freaks out a bit and calls the manager over to inspect it.  He or she gets a bit nervous as they go about looking it over, holding the bill up to the light, not quite sure what they are looking for.   With profit margins being so narrow in quick serve restaurants there is not a whole room for error in accepting a phony bill – particularly a $100.  If they are further along in training they may swipe the bill with one of those iodine ‘counterfeit’ pens.  There is a slight sigh and a quick nod to the cashier to accept the bill.  Other fast food establishments may refuse to accept the $100 bill as a policy, which is a whole other subject. 

OK, now this is getting scary. According to a newspaper article in The Ledger in Lakeland, Florida, thieves are now using blue tooth technology in their credit card “skimming” crimes.  Credit card skimming is the crime of obtaining customer information from the magnetic stripe on the back of the credit card.  In retail shops and restaurants, dishonest employees handling customer credit card transactions swipe the card through a portable device that captures customer information.  They then usually sell the information to others in organized crime rings that create fraudulent credit cards in the customers’ names and buy expensive items or gift cards that are easily fenced for large profits. 

“They treated me like a common criminal”, said the employee after being escorted from the building after being let go from his employer of 12 years.” “It’s hard to recover from watching terminated co-workers escorted to the door”, stated another employee of a company involved in laying off employees in the midst of downsizing.  So why does it happen this way?  Why do companies resort to such protective actions?  It is not so much of a fear of a violent response, but more as, it is protection of proprietary information and the brand.  Policies are created to prevent a just terminated employee from walking out with client lists, memos, or other proprietary information; some of which may or could be used against the company.  To guard against the theft of information, sabotage, or disgruntled or even violent behavior, their departure is closely supervised. 

Could your business be a target of a “scam vendor”?  If you are unaware of potential scams, how they operate, and what to do about them, you certainly are vulnerable to being ripped off. 

An employee of a grocery store was charged with felony theft for allegedly stealing more than $6,200 from fraudulent refunds in six months.  The news article states that $5900 of that amount had been stolen within the past 30 days.  The employee allegedly admitted to watching supervisors log onto cash registers to authorize the transactions. She then used their operator numbers and passwords to create the fraudulent refunds.