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Loss Prevention: What Do the Mob, eBay and Winona Ryder Have in Common?

Loss prevention experts like Tiffany CSO David McGowan say closer integration among security disciplines will go a long way toward managing the retail industry's myriad risks.

They've also figured ways to surreptitiously attack the showcases during the day. For example, there is a lot of glass and glue in the corners of some of the showcases. They have figured a way to neutralize the glue through a freezing technique so they can separate the glass, reach in and take what they need. There's usually a group that goes into a store and as one of them attacks the glass, another is distracting the sales professionals. The Internet gives these criminals a virtually anonymous secondary market for stolen or counterfeit goods. How do you combat that?McGowan: In 2003, we identified that the counterfeiting of Tiffany products was becoming a greater issue. We don't perceive our issue to be as problematic as some of the other luxury brand owners: Louis Vuitton, Chanel, Gucci...but we did notice a significant spike in the presence of counterfeit Tiffany products and packaging in various markets like Canal Street in New York City and on eBay. Customers started coming in asking if we could validate a product they bought on eBay as legitimate. We started assigning some internal resources from both legal and security to go on eBay.

We would buy some product, bring it in-house and work with our quality assurance group to determine whether it was real or fake. Once we determined that there was a good amount of counterfeit products being sold, we were able to identify search criteria on eBay that would net us the counterfeiting sellers and auctions. We started using the VeRO (Verified Rights Owner) program offered by eBay that allows a luxury brand owner or an intellectual property owneras Tiffany is of the Tiffany name and Tiffany colorto appeal to eBay through VeRO to remove that seller and their auctions because they're breaking federal trademark infringement law. When we first started with our criteria, we were at around 3,500 auctions per day that we identified as potentially counterfeit. I think on our best day, we got it down to about 400 auction sites a day that were selling potentially non-Tiffany merchandise. So we considered that a victory.Which perpetrators do the greatest harm: the serial solo shoplifter, ORT thieves or internal employees?Rogers: I have a very strong opinion on that. Richard Hollinger, a professor at the University of Florida, conducts and publishes the results of a national retail security survey every year. For the past five years, the results have indicated that internal theft is rising as a cause of losses for retailers, whereas external theft is going down. Well, my challenge to my peers in the loss prevention industry is: Why are you allowing that to happen? There are two populations involved here. One is a population over which you have direct influenceyour employees. If you select them appropriately, train them appropriately, monitor their activities and treat them appropriately [you should have few problems]. The external group is the public whom you invite to come into your stores, and you don't have much control over them. So if that data is correct, what the heck have we been doing about it?