Let’s begin with a simple but rather important fact. Only a small percentage of the staff working in the retail environment are dishonest, but those that are account for a hugely disproportionate percentage of the losses incurred. It has been reported, in fact, that the losses attributable to staff theft are as much as fifteen times those related to customer theft. Clearly, it’s a situation that no retailer can afford to ignore.
Over the past decade or so, CCTV installations in retail outlets have made a significant contribution to controlling losses due to criminal acts carried out by customers, but they are rather less effective against crimes committed by members of staff.
The reason is not too hard to understand CCTV images of a member of staff carrying out a transaction at a Point-of-Sale terminal look much the same whether that transaction is normal or fraudulent. Even if the images of fraudulent transactions were in some way different, those tell-tale images would be very hard to find among the thousands of hours of CCTV footage generated each week in a typical retail outlet.
With these concerns in mind, House of Fraser one of the UK’s largest and most prestigious retailers wanted to implement more effective measures to combat staff crime. The end result is that the company (and in particular its group head of retail support, Jerry Carter) has implemented EPOS-Scan at several of its major stores.
Developed by Siemens Building Technologies Security Systems in close collaboration with major High Street retailers, EPOS-Scan is based on a simple premise – namely that it links CCTV coverage with Electronic Point-of-Sale (EPoS) data from the sales terminals. In essence, if a particular type of event such as a void or a refund should be ‘actioned’, the system then ensures that images of that specific sales terminal relating to this occurrence are recorded.
Depending on the installation, the system will either do this by recording images from a fixed camera permanently trained on the sales terminal, or it may orient a PTZ camera near the sales terminal such that it captures the required pictures. When a PTZ camera is deployed, the system automatically returns to its normal operations after a pre-set time.
Overlaying audit-roll data
The system goes further than simply capturing images of targeted events. It also uses its own recording system completely independent of that employed for the store’s main CCTV coverage and on its recordings then overlays EPoS audit-roll data corresponding to the event being monitored. It also maintains a searchable log of event types and locations directly linked to the recordings.
The types of event monitored are end user-defined, and can be changed to suit an outlet’s pressing requirements. In the House of Fraser applications, typical events for monitoring include voids, refunds, manually-keyed credit card sales and low value transactions in those sections where goods are mostly of high value.
Working with the data generated by EPOS-Scan, suspicious transactions can easily be identified and, in almost every case, reviewing the EPoS audit-roll information along with the CCTV images of the sales terminal quickly allows the on-site security personnel to make a decision about whether the transaction was fraudulent or genuine.
“A typical example might be EPOS-Scan flagging up a low value transaction in a department which sells designer label clothing,” comments Jerry Carter. “If we look at the CCTV images and see the customer walking away with an expensive garment, yet the audit-roll data shows a transaction of just a few pounds, we know immediately that we have a problem on our hands. With a conventional CCTV system that doesn’t supply the EPoS data, however, the transaction would appear to be perfectly normal.”
House of Fraser has now installed EPOS-Scan in many of its major stores, including those in Manchester, Birmingham, Guildford, at Lakeside and Bluewater, in Reading, London City, London Victoria, Oxford Street and at Dundrum in Northern Ireland. In almost all cases, it proved possible to implement the new system without the need for installing additional CCTV cameras, thus keeping the cost and the amount of work involved to a bare minimum.
Working in collaboration
For each installation, Siemens worked closely with the House of Fraser IT Department to set up the links necessary for EPOS-Scan to be able to access data from a given store’s existing EPoS system. According to Carter, those links were set up “seamlessly and securely”, minimising disruption to the operation of the in-store systems.
“One of the key benefits of the systems is that they can help us identify problems as and when they occur,” explains Carter. “The system instantly brings target events to the notice of our security staff who can then, if they decide to do so, watch the whole transaction as it’s happening. If they spot something untoward, they can respond immediately. This has proven a very effective tool in reducing shrinkage.”
In addition to the real-time capabilities of EPOS-Scan, House of Fraser’s security and loss prevention specialists have found its archiving and logging features to be every bit as valuable. If a particular problem is identified, for example, it’s easy to search the archive for similar events that may have taken place.
Since the archive is searchable by event type and location, this is a fast and straightforward process that can usually uncover patterns of events that would benefit from more detailed investigation. No longer is it necessary to search through hours of CCTV footage in the hope of uncovering such patterns a process so tedious that it was, in the past, rarely worth carrying out except in relation to the most serious of cases.
It’s worth noting here that the events and patterns uncovered by the system aren’t always related to criminal activity. House of Fraser has found that its systems also identify unusual actions perpetrated by members of staff that are carried out innocently and which reveal a need for additional training rather than disciplinary measures.
EPOS-Scan has also proven effective against certain types of otherwise ‘hard to detect’ customer crime. For example, at one store the system readily identified an unusual pattern of credit card activity. House of Fraser duly contacted the credit card company who, at first, authorised the transactions. A little later, however, the credit card company told the store that the transactions were, in fact, fraudulent.
Using data from the system, security staff in the store affected were able to circulate key information (including images) to other stores in the group pretty much immediately. When the perpetrators tried to repeat the fraud at another store, they were quickly apprehended.
Combating the fraudsters
Another area where EPOS-Scan has proven effective in reducing crime relates to the bulk purchase of gift vouchers. Fraudsters often use this method to cash in on stolen cards before they are cancelled. All such transactions in House of Fraser stores are now routinely recorded, thus making it much easier to identify anyone trying to use a stolen card for this purpose.
“Effective as it is in catching criminals, that’s not our real reason for deploying the system,” comments Jerry Carter. “We much prefer to see EPOS-Scan as a tool for dissuading crime. As such, we explain the system and how it works to all of our staff during their induction. We believe that those very few who might have been tempted to ‘take a chance’ on defrauding us quickly realise that the likelihood of being caught is very high and they are, therefore, much less likely to give in to that temptation.”
In instances where a crime has taken place, House of Fraser finds that data and images from EPOS-Scan are ideal for evidential purposes. In the majority of cases, the police are supplied with still images captured from the recordings. These show a picture of the event with the audit-roll data for that event superimposed. Since the system guarantees the link between the picture and the data, this evidence is almost invariably enough to secure a conviction, although the full video recordings are also available for use as evidence should they be needed.
“The already hard-pressed police forces throughout the country find the evidence provided to be very satisfactory,” adds Carter. “It is entirely unambiguous, and it means that little time has to be spent on assembling, collating and checking other forms of evidence. It also greatly reduces the number of prosecutions which fail when brought to a Court of Law.”
Assessing the immediate benefits
Immediate benefits of the systems have included a significant decrease in losses and improved results in dealing with those situations where deliberate theft or fraud has taken place. An added spin-off has been a boost to staff morale, as any potential problems are quickly identified and addressed.
The systems installed have the potential for further expansion at House of Fraser. The system can be extended to monitor loading bays when deliveries are taking place, capturing delivery note data alongside the video images, and also to monitor operations in stock rooms and cash offices. Central monitoring from corporate security centres is also supported.
Not surprisingly, perhaps, the last word on the matter goes to Jerry Carter. “For us, there’s no doubt that the system has been an excellent investment. Every installation quickly pays for itself in terms of reduced losses. While it makes prosecutions easier to secure, it actually does something even better it drives down the overall levels of theft and fraud. That, of course, is the end result every loss prevention specialist is seeking.”