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.

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.

Have You Seen this Man?

Despite recent advancements in camera and encoding technologies, most organizations still can’t provide law enforcement with a decent picture. Here is another example of that. Even if they catch this guy, it will be an uphill battle to use these images in court.

“Police are searching for the person who stole an 83-year-old man's wallet in
Washington County and then used it to purchase more than $100 worth of goods
from a Target store.”