Beating the Bad Guys

LP executives are all too familiar with the dangers of complacency. Just when they think they've got some new threat or scam figured out, the bad guys come at them from another angle.

Staying ahead of the curve requires a non-stop commitment to education and willingness among colleagues who are often battling similar LP challenges to share what they've experienced, what they've learned and the steps they're taking to reduce shrink and identify and tackle new threats.

LP executives from retail companies across the nation will gather in Los Angeles June 15-17 at the NRF Loss Prevention Conference & EXPO to discuss these topics and more. What follows is an advance look at a handful of the slated educational sessions. For a complete schedule of events and to register for the conference, visit http://events.nrf.com/lp09/public/enter.aspx.

Identifying a threat
Jim Matz, director of loss prevention for rue21, will lead a session titled, "Who's a Threat? The Problem Is You Don't Know." Scheduled to join Matz are Mark VanBeest, director of investigations for J.C. Penney; Nancy Jones, vice president of asset protection for Giant Food Stores; Paul Cogswell, vice president of enterprise risk and compliance for Comdata Stored Value Solutions; and Richard Giaquinto, vice president of LP for Gap.

Acknowledging that internal and external threats come in various forms, the retailers on the panel will take turns sharing the details and outcomes of recent cases.

VanBeest will concentrate on refunds fraud, where the "level of sophistication … continues to ratchet upward. We've seen people printing their own receipts, and cases where thieves have managed to steal our receipt tape. Some fraudsters are so sophisticated that they've figured out a way to disable the bar code on the receipt."

One case he'll focus on proved to be a tipping point for VanBeest and his team. The case involved a group that made thousands of returns at 42 stores in 11 states. One of the clues that eventually led to an arrest was the distinctive signature of one of the culprits. VanBeest will discuss a new application that is helping J.C. Penney combat refund fraud.

Gap battled an unusual case of its own. Disguised as a store manager from a Gap or Banana Republic store in Canada, the perpetrator was calling store managers and requesting that money be loaded onto a gift card on behalf of a tourist.

"He had the lingo down," Giaquinto says. "He was so good that initially we thought he was an ex-employee. There's a social engineering aspect to this case that the attendees are going to find really intriguing. The case went on for years, and this con artist just kept getting better and better."

Giaquinto plans to share audio recordings from early in the case and near the end, when the fraudster's act was polished to perfection. "We have a policy against loading gift cards by phone, and there were plenty of times when managers refused," he says, "but there were instances where he was very convincing."

Communicating during a crisis
Gene Grabowski, senior vice president and chairman of the crisis and litigation practice at Washington, D.C.-based Levick Strategic Communications, has a number of recommendations for retailers facing a crisis. His presentation, part of a panel entitled "The Do's and Don'ts of Communicating During a Crisis," will cover the most important aspects of dealing with major internal and external events.

Typically, he says, when a crisis occurs, retailers "tend to think of ourselves, our jobs, our stock price, our brand. But the first thing we must be thinking about is our customer because that is the best way to manage out of a crisis."

The next step, he says, is to begin communicating using media that "gets to the customer in the most efficient and effective way."

Grabowski will also emphasize the value of communicating effectively with employees "because they can undercut what you are saying publically if they are not well informed or are misinformed."

While a weather-related crisis does disrupt business and create concern among customers and employees, "there is not the added burden of blame," Grabowski says. The best solution for an external crisis is "to be prepared, to train for the crisis, to know exactly who must be called and what is needed and to have multiple sources of bi-directional communications."