Loss Prevention Strategies
By Angela Altass
“ORGANIZED RETAIL CRIME IS CONTINUOUSLY GROWING IN CANADA,” SAID NIGEL RAMOUTAR, EXTERNAL FRAUD AND CRIME SPECIALIST, REXALL PHARMACY GROUP, DURING A RECENT RETAIL LOSS PREVENTION FORUM HELD VIRTUALLY BY THE RETAIL COUNCIL OF CANADA. “IT’S BECOME A LUCRATIVE BUSINESS WITH INTERPROVINCIAL ACTIVITY.”
A lot of things have been put on pause since the start of the pandemic but loss prevention requirements continue to be an essential part of business because COVID-19 hasn’t stopped crime.
“Organized retail crime is continuously growing in Canada,” said Nigel Ramoutar, external fraud and crime specialist, Rexall Pharmacy Group, during a recent Retail Loss Prevention Forum held virtually by the Retail Council of Canada. “It’s become a lucrative business with interprovincial activity.”
Ramoutar advised retailers to network and share information.
“Organized retail crime is not just limited to stores but also fraud groups targeting e-commerce space,” said Ramoutar. “I can tell you the results from networking with our law enforcement partners has led to more groups and repeat offenders being identified and apprehended.”
Representatives from several police forces told the forum that they are interested in increasing the efficiency of information sharing with retail partners.
“I am hoping that if we develop our networks, we will create channels that we can use going forward to improve our relationships and deal with the issue of retail theft across this country,” said Gary McCoy, constable, alternative response unit, Ottawa Police. “I suggest that retailers looking to connect reach out and join any network they can and if there isn’t a network to join, create one. Host opportunities for partners from police, community associations, politicians, and crown attorneys to get together for open discussions and dialogue on an ongoing basis.”
Vern Crowley, detective sergeant, cybercrime investigations team, Ontario Provincial Police, spoke on issues around the reporting of cybercrime, cyber insurance and the importance of having an incident response plan. He spoke about malware, ransomware and other forms of cybercrime.
“Data has a lot of value,” stated Crowley. “Cybercrime is flourishing and criminals are making a lot of money. Attacks often go unreported, sometimes because of concerns over brand reputation.”
Cyber-attacks can happen to businesses of all sizes and it is important to ensure that proper backup is available so data can be restored without paying criminals a ransom fee, noted Crowley. If you don’t have an incident response plan, Crowley advises creating one.
“From a loss prevention point of view, the plan needs to be easy to follow,” said Crowley. “Have a checklist in place and once it has been created share it and review it with those who will be implementing it. When a cyber-attack happens and your system is going down and they are trying to figure out if data has been stolen, the level of anxiety will start to rise as employees realize the information that has been stolen includes employee records. If you don’t have good offline backups, the level of jeopardy will be high.”
Crowley advises such things as multifactor authentication and use of password managers will help.
“Data is gold,” he stated. “Isolate and understand what information you have and once you know what is the most valuable to your business or organization, put protection there and make sure you have offline backup that uses a different set of credentials. Think before you click on emails and make sure your data is encrypted.”
Further information on cyber security can be obtained from the Canadian Centre for Cyber Security and the Canadian Anti-Fraud Centre.
Sean Sportun, security professional and chair, Crime Stoppers Toronto, shared experiences and strategies that lowered violence as well as increased sales during his tenure as manager of security and loss prevention, Central Canada, at Circle K.
Sportun noted that there has been an increase of violent situations occurring in retail spaces and he advocated for partnering with Crime Stoppers.
“To stay ahead of crime issues, you need to be creative in your approach,” said Sportun. “I am going to share a unique approach Circle K took to reduce an increase in youth crime as well as violent crime by being creative and innovative. Aside from achieving the goal of reducing crime, it also enhanced brand reputation, overall community safety and increased average store sales.”
Sportun and Circle K approached Crime Stoppers and secured a formal partnership with the organization.
“Through the partnership, not only did Circle K bring awareness to some of the issues we were having but also made an impact on some overall community issues,” said Sportun. “Some of the key issues were theft of gas, contraband tobacco, and organized retail crime. Even though we were a small box environment, we were seeing that offenders were coming into our stores and using their payment cards to test them out before they hit the big box stores.”
Circle K responded through the creation of community engagement programs that worked on the philosophy of crime prevention through community. A social media campaign in partnership with Crime Stoppers worked to get information to the public and the community to assist investigators with offender identification.
“Over time, we were seeing that we were basically putting the message out there to potential offenders not to come to Circle K to commit a crime because here’s what we are going to do to help identify you,” said Sportun, “and we started to see a trend in the number of robberies going down.”
Circle K created coupons for cold or hot beverages that police officers handed out as positive tickets to youth who were exhibiting positive behaviour in the community.
“Since its inception in 2007, 1.9 million positive tickets have been strategically issued directly to recognize and motivate youth,” stated Sportun. “This program is at a 36 per cent redemption rate so it’s clear that the kids are taking the coupons and using them. The message is getting through and we have been able to leverage this with our marketing department to track the sales redemption of the coupons. We could see the individuals were purchasing other products, such as bag of chips or a chocolate bar, when getting their free froster or hot chocolate.”
The Circle K street art program, which began in 2012, turned graffiti into a positive experience for stores that were experiencing crime problems.
“We started seeing crime issues occurring in Northern Ontario,” recalled Sportun. “There was one store in particular with a high amount of robberies. We tried everything: increased lighting, outside cameras, removing escape routes, working with police and then I had an idea to build a mural at the store that was relevant to that community and how that could work to reduce crime. We quickly saw a transformation taking form, with the store now being policed by the community itself and since 2012 we haven’t had one incident at that store. It wasn’t just putting up a mural. It was engaging youth and community, having police on site and breaking barriers.”
Circle K tried the mural concept at other locations and Harvard University took notice and provided a grant to do more murals.
“The graffiti artist we used was key and strategic in what we did because he was able to speak to the youth and talk about legal and illegal graffiti,” said Sportun. “Harvard funded a documentary video that covered, from beginning to end, what we were doing. Today, we have 23 murals that are completed across the province of Ontario and three murals in Western Canada. What we are seeing is crime going down and store sales going up.”
When it comes to loss prevention, Andrea Lombardi, vice president of sales and marketing, CashTech Currency Products reminded store owners, during a recent interview with Convenience & Carwash Canada, to look at the big picture. CashTech offers cash management systems (CMS) suitable for convenience store processes.
“The cost to deal with cash can be as high as 10 per cent and cash in the store is stressful,” said Lombardi. “Automate the processing of cash as much as possible to eliminate the tedious and error-prone counting and sorting of cash. Choose a cash management system that meets your needs. Do you need a deposit-only smart safe system or do you have to recycle cash in the store, either for the till or an ATM? If you skim the till five times a day, put a smart safe under the counter. If it’s once a day, then it can be in the back office. If you have an ATM, consider a recycler to make it easy to keep the ATM stocked with money.”
Smart safes and recyclers require servicing, noted Lombardi.
“Make sure your provider can service your location,” she said. “The right CMS solution isn’t one-size-fits-all. The best solution for your store may be a smart safe that allows for fast deposits, counterfeit detection and provisional credit. Another store may need a larger storage capacity to handle volume and cut down on the number of times cash needs to be deposited at the bank. Likewise, a store may want to incorporate customer-facing units so cashiers don’t even touch the cash. The customer deposits cash into the feeder and it goes immediately into the safe and change is provided directly to the customer as well.”
Most convenience store transactions, around 60 per cent, are still cash, said Lombardi.
“The average size of purchases at convenience stores is relatively small,” she explained. “That means the way you secure your cash can affect how well your store operates. If someone has to count the cash, manually, and often sort it, that takes a lot of time and mistakes are often made, and it’s stressful. The sheer frequency of cash purchases raises the temptation for staff, unless you have a CMS that makes employee cash theft virtually impossible. Convenience stores remain a target for robbery. A CMS dramatically reduces the chances of theft. The smart safe technology was essentially invented by 7-Eleven because of robberies and it largely solved the problem.”
Fewer customers at a time in store during the pandemic and far fewer cash transactions has temporarily reduced the burden of cash in the store but Lombardi doesn’t anticipate that this is a permanent situation.
“That will change now that we’re coming out of the COVID crisis,” said Lombardi. “Cash is very dirty, however, and a CMS eliminates much of the manual handling of cash. Some people working in convenience stores will welcome that, from a health perspective.”
Pandemic or not, loss prevention is always on the mind of store owners and retailers. Staying connected with the latest techniques, ideas and products will help you deal with this constant stressor.