The National Retail Federation provided staggering estimates that retail fraud cost businesses $9.6 billion dollars in 2009. $2.7 billion of these losses were during the holiday shopping season alone. The details of NRF’s survey of large national retailers point to some alarming statistics:
According to the survey, 93.1% of retailers said stolen merchandise has been returned to their stores in the past year, up from 88.9 percent in 2008. In addition, three-quarters of retailers (75.4%) say they have experienced returns of merchandise purchased with fraudulent or stolen tender while 43.1 percent say they have experienced returns using counterfeit receipts. Nearly half (46.2%) also report that wardrobing—the return of used, non-defective merchandise like special occasion apparel and certain electronics—has been an issue for their company within the past year.
The same survey, however, also indicates that there is some hope:
Though return fraud continues to plague the retail industry, changes in policies have helped companies see improvements in some areas. According to NRF’s annual Return Fraud Survey, completed by loss prevention executives at 134 retail companies, two-thirds of retailers (69%) say their company’s return policy has changed in the past to account for fraud. However, the losses remain staggering: the retail industry will lose an estimated $2.7 billion in return fraud this holiday season and an estimated $9.6 billion this year.
But where do you begin if you’re a small business? National and regional businesses have more resources, which often include their own in-house loss prevention specialists. Because they need to have comparable return policies as their larger competitors, but lack security expertise, small business retailers are more exposed to the risk of fraudsters. This is one reason to permanently retain a professional investigator or security consulting company. According to Dr. Craig Engstrom, a small business consultant and assistant professor at The University of Montana, “Small retail and restaurant owners understand that bogus returns and counterfeit coupons put a major dent into their profits. However, most small business owners—especially those with fewer resources—seem to be at a loss about where to begin. I recommend to my clients and students to outsource to professional investigators.”
In a previous blog, I already explained the benefits of retaining a private investigator as a small business owner. However, there are a few additional reasons to make a private investigator a permanent part of your business operations:
Equipment is important
Covert Investigations uses Gen-3 military grade night vision on all night surveillance. See a demo at:
Gen-3 equipment gives you facial recognition from long distances in the middle of the night and with little to no light.
The Gen-3 equipment is not to be confused with the inadequate night shot feature that comes standard with all video cameras. That video when produced only gives silhouetted images and is useless for evidence purposes.
If you have an assignment at night and you want quality identifiable evidence please call me or search a company that has similar equipment.
If an agency says they have Gen-3 equipment demand it be used and refuse to pay for the assignment if the it is not used. Covert Investigations will never bill a client for failure on our part.
Your evidence is important to your case. Be sure your Investigator has that equipment.
Observations & Interviews, a blog by Chet Engstrom
Chet Engstrom is owner of Covert Investigations Services, a private investigations firm located in Lewisville, Texas (DFW area). Texas license number: C10745.
4101 McEwen, Dallas, TX, 75244