Seasoned industry veterans can recall a time when a refund fraud investigation required the review of a vast number of receipts and participation in the “match the signature” game. The long, manual process was considered standard operating procedure for building a fraud case. Fortunately, technology has advanced over the years and has provided us with more powerful tools for detection and prevention. Technology, however, has also hurt our efforts in preventing loss. The advancements of some technologies meant to better our world have also created additional loss and concerns to our industry. This presents us with an interesting question;
Is technology a friend or foe?
We can start with the Internet. Originally designed as a military application for communication, the internet blossomed into the global standard for information gathering and collection. Unfortunately, the advance of e-commerce through the internet also resulted in the advancement and ease at which to e-fence on a global scale. No more standing on the corner “peddling” stolen goods or even finding a “fence” for your stolen product. The internet has become a favorite playground for thieves ranging from the single dishonest individual to the tightly organized ring of criminals. There is so much concern amongst retailers about online auction sites that companies like eBay have stepped up and developed their own asset protection team. Their focus is to work with retailers and apprehend those involved in the dishonest selling of goods on their site.
Advances in electronic payment processes have reduced our exposure to cash loss and seemingly increased a shopper’s ability to purchase. In past decades “check fraud” was an issue of alarming proportions, whereas today we seldom hear much concern as fewer shoppers use checks and check readers have become standard operating procedure. Moving toward an electronic or card based payment process however, we see that the same micro-readers that provide “cash and payment” options, have also generated loss to both retailers and consumers. We have learned how easy it is to purchase (on an online site) and attach a micro-reader to an ATM, store register or even to carry on one’s person and collect information from unsuspecting consumers. These technologies have brought with them the challenges and headaches of meeting stricter regulations and standards including today’s Payment Card Industry (PCI) compliance requirements.
This brings us to Data. The world has become obsessed with data and our industry is no different. Loss Prevention departments have come to rely heavily on data analysis and key performance indicators. As valuable as data is to running a business, it has become equally valuable on the black market. It is no longer uncommon to read articles related to data breaches and at times it seems like thieves are more interested in our customer’s information than our product. These breaches and their effect on our customers have made data privacy and protection “top of mind” for most retailers and solution providers. Technology’s unexpected gift to the LP professional is the need to now be well versed in new state, federal and industry regulations related to information gathering and privacy protection.
We have already seen changes in the investigative process due to PCI compliance requirements, including the potential inability to access card information and delay in conducting proper investigations. As governments and agencies continue to protect data and enact data privacy regulations, we can only expect increasing restrictions to the visibility or access of data and information commonly used in our loss prevention endeavors. What started with credit card and payment information is now migrating into various restrictions of personal, financial and commercial data.
As you look ahead in our industry, how do you think technology will support or deter our efforts in preventing theft and maintaining profitability for your organization or retail partner?
How will future laws and regulations involving data and information restrict us from our ability to investigate and resolve issues?
We may be wondering if technology is truly a friend or a foe, but one thing is quite obvious. As retailers continue to use technology to support their business there will always be someone looking to use that technology to steal from it.