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Gift Cards…Don’t Let The Holidays Get Stolen?

Gift cards are the most convenient and one of the most popular gifts for the holiday season. Not only can you purchase a plastic gift card for a specific retailer, restaurant or experience, you can also purchase them digitally and send to another person through email, social media and virtually through the cloud.  Billions are spent on gift cards yearly; it is a thriving business which fraudsters are eager take advantage of by using stolen credit cards to activate gift cards.  Most fraudulent gift card activity includes low dollar amounts, lessoning the prospect of jail time.  The ease of converting the gift card values into cash and merchandise is big business.

The U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN), https://www.fincen.gov/, created anti-fraud rules and thresholds to limit the opportunity of abuse and fraud. However, organized retail crime groups are constantly looking for gaps in the system to obtain these cards illegally.  These cards are used to launder money through fraudulently purchasing merchandise, convert to cash and to the extreme of using these cards to directly fund illegal activity.

Below are some best practices and scenarios you should be on the lookout for to protect your business, avoid unnecessary loss, and have peace of mind throughout the Holiday Season and into the New Year.

Closed Loop (Own branded Gift Cards for sale):

  • Switching Cards – customer makes a return and a gift card or store credit card is activated with the amount of the refund. An employee can easily switch the activated gift card with an inactivated one and use valid card for their own sales or sell it to someone else.
  • Fraudulent Activations – through an employee performing fraudulent returns to activate a gift card or store credit for personal gain.
  • Taking Gift Card numbers – if left unattended, a gift card rack can be the perfect place for a patient thief. Gift card accounts and pins can be written down and the balances checked periodically to see when a card has been purchased. The numbers can be used online or keyed into a POS without using the plastic card. Is management taking a look at the racks to see if there are limited amounts of cards for opportunity to steal? Is the pin number area on the card still covered, not scratched off?
  • Digital or Plastic Gift Cards purchased through internet marketplace – duplication of actual gift cards and the creation of fake accounts is common practice. If redemption is denied, be sure the gift card balance is checked through merchant services to see where and when it was used. Ask customer where the gift card was purchased to see if it was from reputable provider or a discount reseller.

Open Loop (prepaid bank branded Visa, MasterCard, and Amex)

  • Card Cloning – Organized Retail Crime groups will purchase Open Loop Gift Cards with stolen Credit Card numbers. Use them to clone actual credit cards
  • Money Laundering – Stolen credit card accounts used to buy gift cards in bulk then sell to discount resellers. These gift cards may be resold again to unsuspecting customers.
  • Refund Scam – fraudster will buy merchandise with the pre-paid Open Loop gift card and return the merchandise for an exchange of an item at a slightly higher value. The difference is paid in cash. They then bring back the newly purchased item to the some store and another in the area and receive full cash back from the second purchase.

Be diligent with training your associates to spot possible fraudulent activity and have the proper policies in place to look for:

  • Credit cards purchasing large quantity of gift cards or high dollar denominations.
  • Open Loop gift cards being used to purchase high dollar branded gift cards or large quantities of them.
  • High amount of no original receipt refunds to a gift card.
    • An Employee creating fraudulent transactions for the gift cards to sell online or to friends
    • Customers scamming the store to obtain gift cards for resell market.

Inevitably, fraudulent gift card activity will have a negative effect on the company’s bottom line and may impact customer allegiance to the brand. Ensure you have a profitable holiday season by ensuring your managers and employees know how to identify potentially fraudulent activity.

Ethics, Transparency and Statutes in Civil Recovery – Op/Ed

 

By Stuart Levine, CFI, CFCI and CEO of THE ZELLMAN GROUP

Retail Civil Recovery has been used by retailers in the US since 1987. It has brought over one billion dollars back to retailers.  When properly run within local, state, and federal guidelines, Civil Recovery can be risk adverse.   Recently, many retailers have experienced a lack of transparency and ethics with their Civil Recovery providers.  Several are now subjected to Federal lawsuits or have not received the recovery dollars owed them.  These situations are a symptom of rouge service providers who failed to follow Federal TCPA (Telephone Consumer Protection Act) or did not put ethics and transparency first.  In any retailer/service provider relationship, ethics are non-negotiable and must always be unyielding.

Each State has clearly defined statutes that outline recovery amounts, special language required, juvenile guidelines, and delivery instructions. Many of these statutes have been challenged in the local, state, and federal courts.  In each case the statutes have withstood the challenge.  Brick and mortar retailers continue to experience budgetary restrictions.  Civil Recovery has proven to bring dollars back into the business. Don’t discontinue your Civil Recovery program, simply hold your provider to a higher standard.

 

Below is a link to the Op/Ed as it appeared in the D&D Daily:

http://www.d-ddaily.com/archivesdaily/D&DDaily09-25-18.htm

The Zellman Group Delivers CORCA Keynote Address

On 09/21/2017, Ben Dugan CFI, Director of Field Investigations for The Zellman Group delivered the keynote address to the Carolina Organized Retail Crime Alliance annual conference in Durham, North Carolina. The event was attended by over 200 law enforcement, retail and service provider representatives from North and South Carolina. Dugan spoke about the “Future of ORC” and how innovation is not always found through advancements in technology but often in how the public and private sectors interact and collaborate with one another. He challenged the law enforcement and retail  investigators in the room to “think beyond traditional limitations ” and “use their collective expertise and resources to make a positive impact on both their communities and businesses.” Dugan followed the North Carolina Attorney General, Josh Stein, who discussed the connection between North Carolina’s opioid epidemic and Organized Retail Crime. Dugan suggested strategies on how CORCA members could partner together to help combat the heroin epidemic and other socially engineered crimes.  He spoke about breaking down boundaries and silos within organizations.  Dugan emphasized that ORC efforts should be a component of retailers’ overall external theft prevention strategy, combining investigations with product protection, physical security and awareness.   

Dugan is based in the Zellman Group’s ORC Investigations and Recovery office in Orlando, Florida. The Zellman Group currently offers a “end to end” ORC solution for all retailers, including Open Source and e-Commerce investigations, field intelligence and ORC Recovery.                  

 

 

The Zellman Group hosts Florida Organized Retail Crime Association Advisory Council Meeting

The Zellman Group, LLC hosted the Florida Organized Retail Crime Association Advisory Council’s (FLAORCA) quarterly meeting at their ORC Investigations and Collections office in Orlando, FL. This meeting included representatives from multiple retailers and law enforcement from around the state. FLAORCA announced the rollout of their Intelligence Sharing Platform to all levels of Investigator in both the public and private sectors. This meeting served as a prelude to the Florida Retail Federations Loss Prevention Conference being held on July 20-21st 2017 at the Gaylord Palms in Orlando. During the meeting, Zellman introduced the main components to their end to end ORC solutions being rolled out to retailers across the country. Ben Dugan, Director of Field ORC Investigations states, “The retail industry should look out for big things from both organizations in the near future.”

 

The Zellman Group Hosting Florida Organized Retail Crime Association Board of Directors Meeting

The Zellman Group, LLC will be hosting this year’s Board of Directors Meeting of the Florida Organized Retail Crime Association (FLAORCA).

This quarterly meeting takes place on July 18th and is being held in The Zellman Group’s new ORC Investigations and Recovery office in Orlando, Florida.  FLAORCA is the premier law enforcement/private sector partnership against organized retail crime in Florida. The goal of FLAORCA is to be a network for law enforcement and private sector investigators throughout the state. This meeting gives FLAORCA and The Zellman Group an opportunity to discuss the exciting new ORC developments being made by both organizations. FLAORCA recently announced rolling out their newly updated interactive ORC Intelligence sharing platform while Zellman continues to expand their growing ORC initiatives nationwide. Learn more about the Florida Organized Retail Crime Association at www.flaorca.org and The Zellman Group at www.zellmangroup.com.

NRF PROTECT 2017 Recap

The Zellman Group was one of two Platinum Sponsors of the 2017 National Retail Federation’s PROTECT Conference and Expo.

 The NRF PROTECT conference, held between June 26 and 28, is the largest and most prestigious gathering of LP Professionals in the US.  This year’s conference was held at the Gaylord National Resort and Convention center.

During the conference, we sponsored the Food Retail Breakfast, co-sponsored Tuesday’s Happy Hour, ORC/Investigator’s Network and Law Enforcement Breakfast and co-sponsored a photo opportunity with Super Bowl winning Quarterback, Peyton Manning.

We were very pleased to meet with many retailers in our booth during the Expo.  We always enjoy talking with our current Loss Prevention retail partners and making new connections with LP professionals. Throughout the two-day Expo we held a silent auction to raise money for the National Law Enforcement Officers Memorial Fund. Some memorabilia being auctioned included a signed Kevin Durant authentic Golden State Warriors jersey, signed John Elway authentic helmet, a signed Mike Tyson boxing glove and a Spiderman poster signed by the artist Stan Lee. $1,979 was raised for the NLEOMF. We are honored to give back to this organization that has helped so many of our fallen heroes.

We, also, participated in LPNN’s Digital Conference called, “ORC, from the Investigation to Recovery.” Director of ORC Recovery, Bill Ramos; Director of Field ORC Investigations, Ben Dugan; and Attorney, James Welborn were interviewed to discuss the benefits of retailers out sourcing their ORC Investigations and Recovery efforts. They also discussed the opening of the Orlando office, the center of the Open Source ORC Investigations program.

Overall it was an exciting and memorable NRF for the Zellman team. We look forward to next year’s Expo and seeing everyone in Dallas in 2018!

The Zellman Group, LLC is the leader in Organized Retail Crime Investigations and Recovery, Civil Recovery, Restitution, and Managed Services. Based in Greenvale, NY, The Zellman Group has twenty years of loss prevention experience to fit all your LP needs.

Learn more about the National Retail Federation at: www.nrf.com and The Zellman Group at www.zellmangroup.com.

 

The Zellman Group’s New ORC Center in Orlando Office

The Zellman Group, LLC is excited to announce the opening of its new office in Orlando, Florida.

The Zellman Group’s Orlando office is the center of its Organized Retail Crime Investigations and Recovery program. The focus of this program is to aid retailers in the preparation of the strongest ORC cases for prosecution and financial recovery.

The Orlando office is led by Director of Field ORC Investigations, Ben Dugan and James Welborn, Attorney at The Law Offices of Michael Ira Asen. Dugan is a certified ORC expert from the U.S. Department of Justice with over 30 years of retail loss prevention experience including Big Box, Specialty, and Pharmacy. Welborn is an Attorney at Law with over seventeen years’ experience in retail financial recovery. Together their combined skill and experience will lead to unprecedented results for all Zellman Open Source and ORC Recovery clients.

The Zellman Group, LLC is the leader in Organized Retail Crime Investigations and Recovery, Civil Recovery, Restitution, and Managed Services. Based in Greenvale, NY, The Zellman Group has twenty years of loss prevention experience to fit all your LP needs. For more information, please visit our website: www.zellmangroup.com or email us directly at sales@zellmangroup.com.

Zellman’s Annual Sports Memorabilia Auction at NRF 2017

Don’t forget to visit The Zellman Group’s annual sports memorabilia auction at this year’s NRF PROTECT! All proceeds go to the National Law Enforcement Officers Memorial Fund. This year we are auctioning off signed Kevin Durant authentic Golden State Warriors jersey, signed John Elway authentic helmet, signed Mike Tyson boxing glove, and many more. Come find us at booth 601 and learn more about The Zellman Group at www.zellmangroup.com.