IHF Roundup: Retail Crime Rates Continue to Climb, Robotic Animals End Poaching Dreams & Other Top Headlines This Week

At their conference in Orlando earlier this week, RILA announced the continuing trend of crime in retail institutions at least partially blamed on the dismal economic conditions we've been experiencing. The survey included some of America's largest retailers in all market segments and inquired about measured or perceived changes in retail crimes over the last four months (on the heels of the December 2008 Crime Trends Survey). Here's a quick rundown of the statistics. Looks like we've still got a ways to go to turn this ship around:

• 61% of retailers surveyed report having experienced an increase in amateur/opportunistic shoplifting in the last 4 months.
• 55% have experienced an increase in financial fraud.
• 72% of respondents report that they continue to see an increase in organized retail crime (ORC).
• No retailers reported a decrease at all in amateur/opportunistic shoplifting since last surveyed.
  

Not exactly encouraging numbers, but they definitely show room for improvement and a growing market for surveillance deployments in the retail sector.

While some are resorting to stealing merchandise to make ends meet, others are betting on Lady Luck for a few extra bucks in this recession. Many casinos have seen increased gambling tendencies -- that is, of already-problematic gamblers -- in the past few months. Should security systems be preventing such detrimental habits? A Toronto Sun writer seems to think so.

With an estimated one-third of gambling revenue coming from problem gamblers in casinos, she puts forth the valid argument as to why they aren't stopped before hitting the tables. As she notes in the article, "In Holland, for instance, all casino visitors have to show their national ID card or a passport and are entered into a computer database that tracks their gambling behavior."

So, why aren't other countries monitoring such negative behavior? Should there be some sort of biometric database in gambling facilities? Good question. Although, if you think about it, isn't that almost like employing biometrics at a fast-food joint and prohibiting those with high blood pressure from ordering certain fatty foods? Definitely something to be considered.

Biometrics (or the lack thereof) aren't only in hot water in casinos -- that's hardly the case.

In England, the Home Office announced plans for organizations (including the Post Office and National Pharmacy Association) to collect and transmit biometric information for ID card enrollment. That would mean fingerprints and facial photographs would be stored on ID cards and in a central database.

However, the big question remains the security of the data itself. With such a massive high-street database, there must be a maximum security standard for the implementation to be viable. Additionally, who would be liable for a breach in the system?

That's an awfully high level of risk with the value this type of highly-sensitive information presents to identity thieves and the like. Still lots of kinks to be worked out here. Plus, really not sure how I'd feel about needing to give a set of prints to receive my prescription either.

Biometrics scans are popping up all over -- even in journalism. Fingerprints and retina scans are now required for all journalists covering the war in Afghanistan before being accredited to travel with NATO units or visit military bases. It's drawing some red flags from legal experts who have called the new produced "strange and offensive" and I'm not surprised. According to the article, "The data, including fingerprints and a retina scan, are used to verify identity and are apparently checked against an archive of known terrorists." I've heard journalists called bad things, but being checked against terrorist images -- not quite. At least yet.

Wrote about this quickly earlier in the week -- robotics out to save Mother Nature. Well, something like that. Researchers have designed robotic animals to catch animal poachers. Turkeys, swimming moose, white-tailed deer, black bears -- you name it, there's a robot that resembles it. These robots are saving species one at a time -- literally. With prices ranging from $500 for turkey to $5,500 for a grizzly bear, these decoys do not come cheap and with special reflective eyes glow at night, I'm not sure I'd want to be out in the wild with either species.

Also, don't forget to check out John Honovich's post about our 3VR Korea study on IPVideoMarket.info (along with the commentary from our CEO Al Shipp and myself) here. Gets into the nitty-gritty of the what the study results really mean. Definitely an interesting read.

Daily Headers: May 5, 2009

Retail Survey Shows Crime Continues to Rise Amid Troubled Economy
PRNewswire

• Today, RILA released a survey conducted of America's largest retailers that indicates an increase in retail crime associated with an economy in distress over the past four months.
• Respondents included 32 of the largest and most successful retailers in the U.S., from all segments including grocery, mass merchant, specialty store, apparel, electronics and appliances, and fabric/craft retail.
• Of the reported statistics:
• 61% of retailers surveyed report having experienced an increase in amateur/opportunistic shoplifting in the last 4 months.
• 55% have experienced an increase in financial fraud.
• 72% of respondents report that they continue to see an increase in organized retail crime (ORC).
• No retailers reported a decrease at all in amateur/opportunistic shoplifting since last surveyed.
• Looks like the holiday trend I blogged about in December has kept its momentum into the late winter and early spring months.
  

Uproar over face scan for foreign students
WAToday.com
Cameron Houston

• Melbourne colleges are considering the introduction of facial recognition technology at classroom doors to curb abuse of international student visas.
• The proposal has angered civil libertarians and overseas student organizations, which said the new measure has discriminated against foreign students and could threaten Victoria's $3.9 billion international education industry.
• Three Melbourne colleges or TAFE schools said they would consider the software, which requires overseas students to have their faces scanned. Cameras would then identify students entering or leaving classrooms and automatically record attendance.
• Looks like Aussies are following in Mother England's footsteps in implementing biometrics for attendance-taking purposes?
  

Robot Animals Snare U.S. Poachers
National Geographic
Maryann Mott

• Researchers have designed turkeys that are actually robotic decoys designed to catch such outdoor outlaws. Other robots include a swimming moose, white-tailed deer and black bear.
• For nearly 20 years, the Oregon State Police Department's Fish and Wildlife Division has run a decoy operation targeting violators who hunt off-season from their cars and roadways or at night with the aid of a spotlight.
• Molded-fiberglass animals are wrapped in genuine hides obtained by government officers through donations or illegal kills.
• Inside the bodies are radio-controlled motors—the same type found in toy cars or planes—allowing wildlife officers to remotely move a decoy's head, ears, and tail. Special reflective eyes glow at night when light is shined on them.
• The robots don't come cheap: Prices range from $500 for turkey to $5,500 for a grizzly bear.
• Not sure which I'm more afraid of -- the actual mammals or the robotic version. Do know I won't be caught poaching either of them anytime soon.

IHF Roundup: Chicago Bolsters Virtual Shield, Biometrics Invade Hospitals and Other Top Stories This Week

We're almost into March, officially "Fraud Prevention Month" in Canada and the US, and lots of security initiatives seem to be popping up in the headlines.

Chicago's Virtual Shield project received a $6 million grant from the DHS to link the public surveillance grid to its 911 system. Definitely a step in the right direction in integrating surveillance and emergency resources.

The FBI is putting money to good use, too, with its Next Generation Identification system (NGI). A $1 billion investment over ten years, the NGI combines iris scans, facial imaging, palm prints and fingerprint identification technologies in one, multi-dimensional system. Very cool stuff.

The Korean National Police Agency (NPA) is exploring options around installing facial recognition technologies in ATMs, as part of a comprehensive public security plan to reduce crimes in the country. Should be more focused on face finding and searching technologies in order to help track down and identify suspects, but the initiative does look promising.

An expert group in Westminster pondered the installation of biometrics in the workplace this week. Airports, ATMs, hospitals, DMVs -- why not in your cubicle -- or at the cash register, for that matter? Forget about that PIN or picking up a pen at the grocery store or shopping center -- your fingerprint may be the signature of the future. Much tougher to fake a print than an illegible scribble.

On that note, this weekend, why not head out to the theaters and and see Paul Blart Mall Cop -- might not have received rave reviews, but you'll learn a thing or two about retail security.

Retail Fraud Gravy Train Could Be Derailed

With the new year of 2009 upon us, we're on the tail end of the holiday season and that means those customer service lines are packed with folks trying to return unwanted gifts for cash or store credit. However, what you may not know is that some of those customers are returning goods they never bought-- and cashiers may even be in on the tricks as well.

We blogged a few weeks ago about the growing trend of retail fraud in retail stores nationwide, and as we said, it's as simple as walking into a store, picking up an item and returning it for a full refund. Return fraud will cost retailers an estimated $11.8 billion in 2008 — $3.54 billion during the holiday season alone.

3VR was featured last week in a segment on CBS 5 San Francisco about our proactive approach to eliminating retail fraud with our surveillance software. The piece focused on our unique facial recognition and surveillance technology, which immediately sends alerts to security personnel the moment suspected fraudsters enter the store. Using the 3VR solution, retailers have access to everything they need to apprehend fraudsters before they can make their escape into a crowded mall or parking lot and before employees clock out for the night.

Research is showing that due in large part to the ailing economic conditions we're facing, retail thefts are no longer mostly limited to customers in urban areas. Both customer and employee hands are stickier this holiday season in more rural regions, demonstrated in the spike in crime in states such as Arizona, Colorado and New Mexico. Coupled with smaller budgets that have forced stores to cut prevention costs, retailers are stuck with tremendous financial losses. Organized Retail Crime (ORC), or "sophisticated crime rings that steal and stockpile huge quantities of merchandise that is sold later to unwitting buyers" in flea markets, pawn shop and other outlets, has also increased in these tough times.

"It's not pure need, but times are tough and the economy triggers people making bad decisions," said Joseph LaRocca, vice president of loss prevention for the National Retail Federation (NRF). An October NRF survey revealed 79 percent of retailers polled have experienced an increase in employee theft compared with the same period in the previous year, and according to LaRocca, retailers lost $34.8 billion in 2007 from employee thefts and shoplifting combined.

Ranging from simple shoplifting tricks and cash siphoning from registers to colluding with customers in sweethearting (when the store cashier works with the customer and intentionally undercharges by skipping items when checking out), retailers are fighting an uphill battle against employee fraud this year. As recent statistics and coverage is showing, proactive solutions like 3VR will be ever more critical in 2009 for retailers looking to prevent these criminal acts from both sides of the transaction and survive the slower revenue streams expected in the year ahead.

Attention Shoppers: All Sales (Should Be) Final

While not the latest trend, the bear market has spurred a spike in acts of 'wardrobing' and other illegal retail fraud in stores nationwide.

'Wardrobing' essentially describes the act of purchasing a retail item, using the merchandise and returning it for a refund often with the original tags still attached. Think of it as ordering an entrée at a restaurant, having the waiter bring it to your table, then sending it back to the kitchen and having the waiter serve it to the next customer who orders the same meal.

As this blog notes, Good Morning America featured a clip last week on the year round practice that peaks during the holidays, as consumers are confronted by the traditional excess of events and cocktail parties and pressure to come up with something suitable to wear. The segment even has an interview with an anonymous 'wardrober' who admits she only committed her wrongdoings because she was strapped for cash.

While this woman and other frequent wardrobers often write off their misdeeds, it seems to be in their best interest to stop while they're ahead. Retail stores are finally catching on, expecting a loss of $11.8 billion in 2008 ($3.54 billion during the holiday season alone) due to fraudulent returns and thus increasing security surveillance. Furthermore, while some stores are extending return policies to garner more sales, many retailers are beginning to give bonuses to cashiers who catch wardrobers red-handed, as well as tracking those customers who are making a high number of returns.

So, wardrobers beware: if store cameras don't catch onto the illegal practice, few cashiers will pass up the bonus from denying a return of that stained shirt you wore to the company holiday party.

Top 10 Asian Telecom Predictions for 2008

IDC has revealed its top 10 telecommunications predictions for the Asia-Pacific region excluding Japan (APEJ) in 2008. These include greater demand for Web 2.0 and unified communications applications such as collaboration tools within the enterprise, as well as increasing awareness in IP-surveillance products.

8. IP surveillance With IP-surveillance tools currently being deployed in Beijing, China, as part of the 2008 Olympics security plan, 2008 is set to be a "big" year for the technology. "Businesses will be receptive to IP surveillance due to increased security concerns, as well as IP surveillance's cost effectiveness," IDC said.

IP surveillance technology will become popular in the
gaming, financial services, and retail industries, the study noted, citing
physical security as a primary concern for these vertical industries. I would
add banking to this list.

Shoplifting on Steroids

http://www.azcentral.com/arizonarepublic/business/articles/1202biz-ev-secruity1203.html

Shoplifting has always been bad news. It’s also BIG business. According to Jason Beckerman, a Target Investigator, if you added up burglaries, auto theft, and indeed every kind of theft outside of shoplifting, you’d still have a problem less than half as large as shoplifting itself. In the Arizona Republic he is quoted as saying, “The value of property lost in […] excluding shoplifting was $18 billion in 2006. Shoplifting losses totaled more than $40 billion that year.” Part of the problem more recently has been professionalization of retail theft. Shoplifting isn’t so much about teen-agers sneaking a pair of designer jeans past a checkout counter anymore. Instead, well organized gangs of criminals steal huge quantities of popular goods from stores and warehouses. Items targeted range from iPods, to Visine, to baby formula, with values per truckload often reaching into the millions.

And because the Internet offers so many ready-made outlets, like eBay, to quickly sell stolen merchandise, cashing in on stolen goods is easier than ever. It’s enough to make one long for the good old days when crooks could be found selling speakers out of the trunk of a car for 10 cents on the dollar.

Smarter and more organized criminals, along with this so-called “fast food fencing,” have lead retailers to adopt higher prices and new approaches to fighting crime. They’ve been forced to become smarter and more organized themselves, building in-house investigative teams armed with technology straight out of C.S.I. For example:

This fiscal year, Target has closed 30 investigations, made 60 arrests and is
working about 16 cases in Arizona and New Mexico. Target has three investigators
in Arizona to hunt down the biggest offenders here and in New Mexico. The chain
also operates two forensic labs in the United States, including one in Las
Vegas.

Facial recognition systems and other advanced surveillance technologies are also being deployed to investigate, and more importantly prevent, organized retail theft. Today, databases of known criminals and gang members can be shared across retail institutions and tied directly into participating stores’ camera networks. When a “bad guy” is spotted on camera, security personal are instantly alerted. And as importantly, the advanced search engines can be used instantly sift through company surveillance archives for any and all related evidence to a suspect.

Shoplifters may be getting smarter and more organized, but they aren’t the only ones. And in an arms race between the bad guys and the Targets, Walgreens, and Wal-marts of the world… I think the smart money is on Wal-mart.


Target investigator Jason Beckerman (left) and Dan Helmick, a security leader for Target, watch monitors in a security office at a store in Mesa.