The ugly side of retail is the reality of theft. From warehouse to website and shelf to doorstep, every step in the chain has a potential for loss on your P&L. “When it comes to criminals, they’ll find the product. The opportunities really are where ever you put the item.” That’s what Eric White of Tyco Retail Solutions/Johnson Controls said in a recent interview on the 8th & Walton Conference Call podcast.
Eric and his team support businesses every week in loss prevention. As we went further into our conversation, he shared intriguing insight into today’s theft, but also the growing technology to combat it.
There’s Always the Opportunity for Theft
Eric continued his opening thought by expanding on the simple side of theft. As the old saying goes, criminals will “fish where the fish are.”
“If you’re shipping it through your distribution centers, on trucks, to people’s houses, there are opportunities throughout that chain,” Eric explains. “In the brick-and-mortar world, it is what it’s always been: if someone can access it on the shelf, there’s a chance that someone will steal it.”
Though the brick-and-mortar opportunity remains the same, technology changed the game for both retailers and criminals. Today’s loss is happening more prominently in creative, multi-step ways.
As Shopping Grows More Sophisticated, So Does Theft
We asked Eric about just how complex theft has become, and how easy it is to facilitate. It’s a threat he and his team assist retailers with more and more.
“One of the largest threats financially in online business is really the fraud aspect of the transaction,” he begins. “Someone uses either a fraudulent credit card or creates a fake identity to order product. To the retailer, it looks like it’s a legitimate transaction. Then, the bad guy accumulates products and moves his shop somewhere else, making them difficult to track down.”
For the criminal, is there really reward with so much risk? Eric reveals the criminals today reap higher rewards for their complex setups. “In their fencing operation, they can move product for up to 80 cents on the dollar,” he illustrates. “The old rule used to be 10 cents on the dollar. However, when you get really good branded product and you have a means to move that product, it’s becoming more and more lucrative to set up those fraudulent groups that operate in a fairly sophisticated manner.”
With so much pre-work done by the criminal operation, the retailer suffers in the end. Online fraudulent transactions provide a comfortable window to receive and move stolen product. “When the retailer is faced with only finding out after the transaction that there was something wrong, it’s really had to intervene,” Eric concludes. “Understanding your true customers’ behaviors can help predict whether a transaction could be fraudulent.”
Technology Takes on the Criminal
The good news for retailers is crime doesn’t pay in the end! While the thieves develop tactics to steal, companies like Tyco Retail Solutions/Johnson Controls are there to stay one step ahead. It’s exciting to hear Eric explain great innovations in loss prevention technology.
“In the last year or so, we’ve seen an acceleration of technologies at a faster rate than we’ve seen in decades in the loss prevention industry,” he explains. “Everyone is trying to use their technology to identify product, where it is, who it’s associated with, and what their intentions are with it.
“Technology, whether it’s video or a radio frequency or a beacon or any number of technologies are trying to do the same thing. They want to identify the product that’s of highest risk and what’s happening to it. Then, predict what’s going to happen to it at that point of purchase.”