Congress

The rise in public-private partnerships to fight organized retail crime continues. The Tulsa Police Department has created a new Organized Retail Crime Unit, which is collaborating with local retailers to combat professional shoplifters, according to a news report from KTUL. Detective Lori Visser, a member of the newly formed ORC unit, said the group has already identified between 40 and 60 organized shoplifting groups operating in and around the city. She also said ORC has cost the local taxpayers more than $1 million in lost tax revenue.

With the increasing number of these ORC groups, I think it's time we had a clearinghouse of information about all these groups and points of contact at each.

I spend a good amount of time writing about video surveillance and its use to prevent, but more often prosecute crimes. And while there has been significant advancements in this technology, from video analytics to reduction in cost which makes it more accessible to smaller businesses and the growing residential market, it's the same basic premise, really.

So when I read this article on AOL News, I couldn't help but wonder if the Brits were onto something. This article notes a growing trend for retailers and banks across the U.K., Europe and New Zealand to deploy a gadget called SelectaDNA Spray. Here are some details:

SelectaDNA Spray is a canister loaded with a harmless solution containing synthetic DNA. If a criminal attempts to burgle a premises fitted with the device, an employee can hit a panic button that alerts police to a crime in progress and simultaneously shoots out a fine mist covering everyone in the room, including the robber. And as each batch of the spray -- which glows blue under ultraviolet light -- has a unique DNA signature, police can connect the robber to the scene of the crime.

And here's another interesting tid bit: Almost everyone arrested in the U.K. is scanned with a UV light, no matter what crime the person is suspected of. Didn't know. Is that a common practice here in the U.S.?

But, like a lot of security technologies, the spray isn't only intended to capture criminals, but also to deter them from committing a crime. "Retailers are investing in this technology because they want to move the crime on somewhere else," said Andrew Knights, managing director of SelectaDNA. "They are just out to protect their property and staff." That's why every business that uses a SelectaDNA spray also prominently displays a bright yellow sign in their window showing a stick man with a bag of swag being hit by the mist. "Warning," the sign reads. "SelectaDNA spray installed here."

This article mentions a high usage of this product by retailers, but I have some doubts. If I were a retailer, I would be immediately concerned about installing anything that has potential to spray stuff on my merchandise. It could be hard to sell clothes that glow under ultraviolet light, unless of course your target audience are clubgoers - they may actually dig that.

But what do you think about such a product? Legit or fad? Wanna take bets on whether it will enter the U.S. market or not?

Cargo theft is no small matter. It's estimated that between $15-$30 billion in cargo is stolen every year and it's only getting worse. In this SDN article, Keith Lewis, task force agent for the major theft unit of the Georgia Bureau of Investigation, said it's getting worse and worse because it's highly profitable, relatively easy to do, and the punishment is relatively minimal. Here's what he had to say:

“The bad guys know the money is rolling up and down the road and it’s at rest and unattended a good bit of the time,” he said. “This is a very easy crime to commit and get away with and the punishment tends to be less and law enforcement does not understand the nature of this crime." Those caught stealing cargo are often prosecuted for property crime, which results in a much lesser sentence.

Well, a NBC article found that cargo theft has gotten so bad in the Dallas and Fort Worth area that truckers are actually afraid to pull off the road.

Apparently there's been major growth in gangs of thieves stealing entire trucks, or unloading everything inside the trailer in a very short period of time. It's gotten so bad some security companies and trucking agencies are recommending truckers avoid the highways of Dallas and Fort Worth entirely, calling them "no-stop zones."

Frankly, I'm shocked that more retailers and wholesalers don't do more to secure these trucks. First of all, the fact that companies send these truckers off by themselves with literally no security in place and millions of dollars worth of merchandise is quite astounding.

"They put a gun to your head and it's in this trailer - they want this trailer - what are you going to do - lose your life over this trailer?" driver Thomas Schnider says.

After all the craziness of the holiday season, retailers can officially expel a collective sigh of relief. This New York Times article reports that the numbers for December were surprisingly strong and significantly better than 2008.

Over all, the industry turned in a 2.9 percent increase in December compared with the period a year ago, according to Thomson Reuters. Some 75 percent of retailers beat analysts’ estimates.

Retailing groups calculated in recent days that sales for the combined months of November and December rose 1 to 2 percent from a year ago.

Exceeding estimates by 75 percent is pretty darn good, I'd say. These figures, of course, are exactly what retailers were hoping for, but, as expected, different categories of retailers fared better than others.

Luxury chains, the stores hit hardest by the downturn in 2008, bounced back with higher sales: up 9.9 percent at Saks, up 7.4 percent at Nordstrom, and up 4.9 percent in the specialty retail segment of Neiman Marcus.

Discount retailers continued to thrive with sales climbing 9 percent at Costco, 4.8 percent at BJ’s Wholesale Club, and 1.8 percent at Target.

But don't go around slapping each other on the back yet: Despite the good news, retailing analysts are concerned that against a backdrop of high unemployment, consumers could go into hiding again now that the holidays are over.

It'll be interesting to see how retailers fared in terms of minimizing theft. The holiday season tends to be when retailers are the most vulnerable and are stretched thin in terms of LP staff and resources. I guess we'll just have to wait for that report to come out, now won't we.

Encouraging people to shoplift is not exactly the message that the retail industry was hoping would spread this holiday season. According to this article, a priest with the Church of England has advised members of his congregation to shoplift if they fall on hard times.

"My advice, as a Christian priest, is to shoplift," the 42-year-old priest told his congregation Sunday, the Yorkshire Evening Post reports.

However, there are some stipulations:
But if they do, he said, they should steal from big national chains rather than small businesses because the costs "are ultimately passed on to the rest of us in the form of higher prices."

Granted, I haven't been to church for a while, but I vaguely remember from my Sunday School days that one of the 10 commandments said something along the lines of: Thou shall not steal, right?

And I'm pretty sure as a priest, you're suppose to abide by these rules and certainly aren't suppose to promote your congregation to break them. Isn't there some sort of consequence involved. Like I dunno: Hell? Religion sure is a funny thing.

Of course, the Church of England put out a statement saying that it does not condone stealing. However, when interviewed by BBC Radio York, Father Jones said he was not trying to rally people to shoplift, rather to encourage people to give more to charity to avoid those in need from becoming so desperate.

"If one has exhausted every legal opportunity to get money and you're still in a desperate situation, it is a better moral thing to do to take absolutely no more than you need for no longer than you need," he told the BBC.

Yes, make sure you maintain the high morale ground and don't steal more than you need. I'm sure that puts retailers at ease this holiday season.

In exactly one week, shoppers will be storming stores in search of great deals to kick off the holiday shopping season. Retailers, of course, are preparing for this onslaught of customers and enticing them with early morning and other money-saving specials. Like every year, there are concerns about crowd control and ensuring customers don't get too out of hand in an effort to save some dough and repeat the tragedies of previous years where people were trampled and injured on Black Friday.

The Occupational Safety and Health Administration is urging retailers to step up their crowd control and other safety precautions, per this article from Bloomberg. OSHA is recommending retailers use bullhorns to manage crowds, set up barricades or rope lines and clear entrances of shopping carts and other potentially dangerous obstacles. Mega-retailers like Wal-Mart said they will leave most of its 833 U.S. stores open overnight on Thanksgiving to avoid fostering crowds on Friday morning of unmanageable size, according to the article.

I've never attempted to shop on Black Friday and this is exactly why. I really don't like being treated like cattle and, in general, I avoid large crowds whenever possible. For some reason, people seem to immediately lose any inkling of common sense when put in a crowd and I would rather not be one of them.

Fittingly, I'm here at the ADT retail media event in Boca Raton, Florida and today we'll be talking to some retailers not only about some of their strategies for the holiday shopping season but also about how the protection of merchandise is evolving. Specifically, I'm hoping to find out if RFID technology has reached the level where it's actually affordable for retailers. There will also be a presentation of other technologies that retailers are using to fight theft and control inventory. I'll keep you updated. Oh, and there's even suppose to be a real-live press conference, which I'm excited to attend.

And, to the folks who decided to put up the ginormous Christmas tree in front of my hotel more than a week before Thanksgiving: I say bah humbug.

I had the opportunity today to participate in a press teleconference sponsored by the Coalition Against Organized Retail Crime as a preview to hearing before the House Judiciary Committee Subcommittee on Crime, Terrorism, and Homeland Security on the federal response to ORC.

There are currently three bills under consideration in Congress in regards to ORC:

E-Fencing Enforcement Act of 2009, H.R. 1166

Organized Retail Crime Act of 2009, H.R. 1173

Combating Organized Retail Crime Act of 2009, S. 470

Congressman Brad Ellsworth, who co-sponsored the Organized Retail Crime Act of 2009 said that this legislation will provide the tools for retailers and law enforcement to fight ORC and will place higher penalties on people convicted of such theft.

But that's just the beginning of it. Where it starts to get contentious is during discussions of the e-fencing bill, which "will require online merchants to maintain contact information such as name, phone and physical address for three years -- that's less information than pawn shops require," said Congressman Ellsworth. He went on to say that requiring this information from those reselling goods online is not intrusive and will help law enforcement and retailers to "remove the cloak of anonymity to preserve the online marketplace."

"We feel that the federal legislation proposed will take the first step towards transparency," said Joe LaRocca, senior asset protection advisor for the National Retail Federation. He said it would be similar to what's being done on eBay’s U.K. site, which requires power sellers to post their physical address so consumers can see who they're doing business with (which, by the way, I have not confirmed yet).

Well, not surprisingly, eBay is not psyched to be singled out like this. Soon after I got off the conference call, I received a phone call from Paul Jones, director of retail partnerships with eBay. "[This legislation] is discriminatory towards one type of business model and I would encourage anyone who supports the legislation to read it and they will find that it singles out eBay opposed to any online marketplace or crime enterprise," Jones said. Not only does he say that it's unfair to point at eBay specifically, but he maintains that eBay goes above and beyond to provide law enforcement and retailers the opportunity to surf its site for potential stolen goods. "We're the only site that allows retailers and third-party companies to deploy software to mine our site to look for trends that find bad actors," he said. According to Jones, retailers could target sellers who are selling a large amount of sunglasses or other merchandise that might have been potentially stolen.

Jones said while eBay supports legislation to combat ORC and the institution of stiffer penalties for those convicted, he said requiring power sellers to disclose private information is actually a security concern. He said for those selling expensive merchandise, for example, disclosing where you live may be putting yourself in danger.

Also, Jones said that it doesn't need to post such information because he says eBay already gives law enforcement access. "We allow law enforcement 24-hour access to our IP system to find leads online and they can actually surf our site and get seller information without a warrant," he said. "We spend a considerable amount of time training law enforcement and loss prevention professions about how to use our site and the tools on our site to do their own checks and balancing."

Just as a disclaimer on my part, I have not been able to confirm how much access eBay allows law enforcement agencies about its sellers, but it's a heated subject, that's for certain. If you care to watch tomorrow's hearing, follow this link. I'll be watching.

During recent discussions with retail professionals, I've been trying to determine  the level of concern regarding cybersecurity. I realize that it's largely an IT issue, but with all the talk of convergence between IT and physical security, I wonder how long we can silo cybersecurity?

Here is a great article by Wired.com about the security breach at Wal-Mart in 2005 and 2006.

Internal documents reveal for the first time that the nation’s largest retailer was among the earliest targets of a wave of cyberattacks that went after the bank-card processing systems of brick-and-mortar stores around the United States beginning in 2005. The details of the breach, and the company’s challenges in reconstructing what happened, shed new light on the vulnerable state of retail security at the time, despite card-processing security standards that had been in place since 2001.

At the same time, the attacks on stores like TJX, Barnes & Noble and other stores were happening, which resulted in more than 100 million stolen credit card accounts. In case you missed it Albert Gonzalez plead guilty this month to carrying out many of those breaches with other hackers, and is facing 15-25 years in prison.

BUT, here's the sentence that caught my physical security attention:

The intruder had reached the machine through a VPN account assigned to a former Wal-Mart worker in Canada, which administrators had failed to close after the worker left the company.

That's a physical security issue, is it not?