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The retail battleground

When we sat down to talk about retail organized crime (ROC) with the group of loss prevention professionals you see on the cover of this issue, they came armed with tales of highly sophisticated financial crimes: credit card and debit fraud, slick cheque forging operations, organized shoplifting and gift card fraud.



July 4, 2007
By Jennifer Brown


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I added them to the anecdotes I’ve heard Rita Estwick telling the
security industry since she began her role as co-chair of the Retail
Council of Canada’s Loss Prevention Committee in January. At a Toronto
ASIS dinner meeting earlier this year Estwick talked about how last
year, Nelson Harrah, a senior LP professional from The Gap in the
U.S.,  had been in Toronto working with Canadian authorities on the
investigation of a booster shoplifting network.  One of the individuals
eventually apprehended had been previously arrested in the U.S. for
similar activities.

That story lends credence to a belief that a crackdown in U.S. laws
against retail organized crime is pushing the problem north of the
border. The RCMP estimates retail organized crime in Canada at about $5
billion and growing.

Retailers manage a tough business. They employ workers who are often in
their first job or those with little other work experience. In many
cases, turnover is high in retail. Training, although promoted as the
best defence against retail crimes, comes at a cost as well and must be
reinforced — not easy to do when the day-to-day mission is to sell
goods, make a profit and deliver great customer service all at the same
time. Now, among other defensive tactics, retail store managers must
train associates to not only keep an eye on the merchandise, but to
also secure the cashier’s PIN pad when not in use and to periodically
check it for tampering.

And while you might think the big box retailers are among the hardest
hit, smaller stores in more rural communities are targets too. In 2005,
information from StatsCan revealed that retail theft in communities
such as Banff and Grand Prairie, Alta., was on the rise. Not
sur-prising given the boom in the West, but it made it clear no one was
immune — ROC goes where the action can be found.

It’s no surprise then that the RCC and its members have a keen
understanding of what it meant when the U.S. government signed into law
H.R. 3402, an Act that recognizes retail organized crime as a priority
for law enforcement. The FBI now has a mandate to work with U.S.
retailers to create a national database to identify where retail crime
is taking place. The law in the U.S. came with $5 million for managing
that database and training of law enforcement to investigate and
prosecute the crimes. Canadian retailers are going to try and develop a
similar database, although there’s not a pot of money from the feds to
do it.

California is also working on a retail organized crime bill that will
make it tougher for stolen goods to be sold in flea markets and online.
Provincially, Ontario is examining the Pawnbrokers Act and
New-foundland and Labrador are passing the Flea Markets Regulation Act,
which forces vendors to provide documentation to operators or police to
confirm goods have been obtained through legal sale.

The RCC has managed to secure a seat at the Ontario Government’s
Special Advisory Forum on Organized Crime, which Estwick views as a
major “win”. In a battle like this, gaining political spots such as
that is a significant milestone.

Jennifer Brown, Editor


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