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Brick-and-Mortar’s Billion Dollar War On Crime

Brick-and-mortar retailers are experts in dealing with crime inherent in operating physical spaces. But now they’re now having to spend millions to fight organized crime rings leveraging online platforms to fence goods as well. To combat the growing crime sprees and threats to physical security, brick-and-mortar retailers are turning to technology to fight back. 

A report recently published in the Wall Street Journal uncovered complex shoplifting networks, using online retail platforms like Amazon to sell stolen goods. CVS tracked down one group it believes is responsible for stealing $50 million in products over five years from dozens of stores in Northern California. Thefts at CVS are up 30 percent. The Coalition of Law Enforcement and Retail estimates that organized retail theft accounts for around $45 billion in annual losses for retailers these days. The pandemic has only made things worse. More than two-third (69 percent) of respondents in the National Retail Security Survey released by the National Retail Federation said they’re seeing an increase in fraud, crime, and overall risk to their organization as a result of COVID-19.

It’s not just financial crimes. The survey found a  significant increase in the threat of workplace violence, according to 61 percent of respondents. We’ve all seen viral videos of fights breaking out over masks policies and social distancing. Dealing with the pandemic has some people forgetting how to act in public. Tasked with enforcing store policies, employees are being treated poorly, leading to a nationwide shortage of retail workers. The problem has gotten so bad the CDC released official guidelines on how to limit COVID-19 related workplace violence. Then there’s the threat of gun violence, still the top concern among retailers. Violent crime and murder rates are spiking across the country. 

All of this has put serious pressure on brick-and-mortar retailers to provide safe shopping environments. Up against the ropes against e-commerce, a pandemic, and a labor shortage, dealing with growing security and safety threats in physical stores is becoming the brick-and-mortar retail sector’s largest problem. The world’s largest traditional retailers are beefing up security and anti-fraud teams. Target, Home Depot, CVS, TJ Maxx, and Marshalls have been hiring investigators and security professionals and investing in new technology to ensure customers stay safe and products are paid for. Some stores have even begun limiting hours to try to prevent crime. 

Not that they need another, but brick-and-mortar retailers have a new reason to hate Amazon. “[Amazon] may be the largest unregulated pawnshop on the face of the planet,” Sgt. Ian Ranshaw of the Thornton, Colo., police department told the WSJ. “It is super hard to deal with them.”

Amazon says the company doesn’t tolerate fencing stolen goods and regularly works with law enforcement to stop criminals seeking to exploit the online marketplace. An Amazon spokesman said the company spent $700 million last year to combat fraud on the sites. Online crime is hardly limited to Amazon, though. Criminals have been leveraging the internet for profit since its inception, but the recent proliferation of anonymous online marketplaces is making selling stolen goods easier than ever. 

Getting shoppers back into shopping centers will be impossible if they don’t feel safe. COVID-19 mitigation is a major part, but so is safety and security in a world of growing threats. Every customer has a cellphone and internet connection which means safety incidents can go viral in an afternoon, even if it’s a false alarm. The perception of safety is just as important for shoppers. Posting security cards in visible locations is only part of the process. Accurate and timely information regarding unexpected incidents can be just as important. To help keep people informed some physical retailers are using mobile apps to connect shopping center personnel with visitors so everyone is on the same page during a situation that impacts security or safety. 

“We transitioned to the critical comms platform within [property management software] Mallcomm just as we had a critical situation where there was a firearm being used on the site,” Allied Properties REIT Security Manager Kyle Dodd said at Propmodo’s recent webinar. “We were able to immediately communicate with the tenants, let them know we’re actively investigating with the local police. It’s been a lifesaver because we can keep people not meant to be in that area away and keep them updated so they don’t come back too soon.” 

Mobile-based communication can prevent the type of panic and chaos that makes incidents worse. Anyone responsible for security and safety at a store knows most incidents are false alarms, but that doesn’t mean that they can’t create a situation themselves. Being able to provide tenants and visitors information on the authenticity of threats and appropriate action is a critical lifeline in unexpected situations that rapidly develop. 

“You’ve always got to do the right thing and assume it’s real,” Westfield Vice President of Guest Services Jeff Adams said. “Initial communications are only the beginning of the entire incident process. We have to remember security is about protecting and serving.” 

Many retail locations have taken to using centralized security operations centers (SOCs), large command centers with security professional monitoring cameras, to respond to incidents. For most stores, that’s usually one person monitoring dozens of cameras trying to pick a needle out of a haystack. Now those efforts can be amplified with tech like AI-enabled cameras that can pour through data and camera feeds at an incredible rate, verifying threats rapidly, recognizing license plates, automatically saving sensitive information, and passing on crucial info to law enforcement. Door jamb cameras, nestled directly at eye level in the sides of a door frame, are being used to catch criminals adept at hiding their faces. POS scanners with built-in security scales and cameras with secure facial recognition technology are also a key part of preventing fraud and theft. “The tech that exists nowadays is allowing us to react quickly and provide a level of safety and security people are really looking for in this day and age,” Dodd said. 

Retail safety and security also mean protecting employees and security guards. Confrontation with shoplifters and fraudsters has resulted in several incidents of violence, escalating a financial crime into a violent one. Collecting the necessary information required to track and apprehend the criminal is always a better option than direct confrontation that could lead to physical harm. Technology helps with that by seamlessly providing law enforcement whatever information the store was able to collect on the suspect. 

Fighting organized retail crime, fraud, workplace disruptions, and violence all come back to store security which can get expensive quickly. Already fighting against the thin margins of e-commerce, the added costs of additional security is a tough pill to swallow for physical retailers. Stores are suffering from historic losses and also being expected to foot the bill the preventing the losses, adding insult to injury. 

We can’t put the burden of store security entirely on brick-and-mortar retailers. Lawmakers and online shopping platforms must do more. In some areas shoplifting is a mere misdemeanor costing offenders less than a $1,000 fine. No law allows shoplifting charges to be aggregate, making prosecuting repeat offenders difficult. Some jurisdictions don’t classify violence used to retain stolen property as armed robbery, telling criminals that as long as you pull the gun out after you steal the item, you can avoid the felony charge. 

Online platforms also must start requiring more through third-party seller verification. The INFORM Consumers Act, currently in Congress, is a bi-partisan effort to tackle illegal online fencing. The legislation calls for e-commerce platforms to verify sellers via government-issued ID and necessary contact information. 

“Consumers deserve to know who they are buying products from online in order to make safe and informed purchasing decisions for themselves and their families,” said Alex Gourlay, Co-Chief Operating Officer, Walgreens Boots Alliance. “The INFORM Consumers Act will bring transparency and accountability to today’s digital marketplaces and make it much more difficult to deceive consumers with fake, counterfeit, expired or stolen items.”

Securing physical spaces, preventing loss, and keeping guests safe have been issues in brick-and-mortar retail since the early bazaars. Technology is increasing the level of crime one person is capable of committing while simultaneously augmenting the security efforts against them. Retail stores are some of our most used physical spaces, preventing crime and violence is the property industry’s highest priority, but the scale of the growing problem means brick-and-mortar businesses can’t do it alone.

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