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A retailer in the Southeast contacted the FBI about what it believed was organized retail crime (ORC) taking place in its market. At the time, however, the dollar amount stolen from this retailer was so low that the FBI couldn't afford to dedicate resources toward the problem.
Instead the law enforcement agency referred the retailer to the Retail Loss Prevention Intelligence Network (RLPIN), a nationwide technology-enabled system launched by the National Retail Federation in June that enables retailers and law enforcement agencies to report and monitor criminal activities such as organized retail theft, burglaries, robberies, and fraud ring activity.
The retailer entered information about its incidents into RLPIN's database, and then compared it with data on similar incidents in the region. The results showed that something much larger than a few penny ante thefts at a single retailer's locations was afoot. Rather, a pattern emerged that crossed 14 retailers and amounted to an estimated several hundred thousand dollars in losses. That caught the attention of the FBI.
"That was a huge success for our system, and something we think will be a regular occurrence in the future," says Joseph LaRocca, NRF's v.p. loss prevention, who spearheaded the system's development.
The RLPIN system analyzes the different data points from retailer crimes, and categorizes them based on any patterns in the major incident information: date, time, type of incident, type of retailer, the amount, and the geographic location -- city and state.
"Those are the core elements of the system," explains LaRocca. "Retailers can go into the system -- each user has his own library of queries -- and within that library, they can customize any of the data points to harvest information out of RLPIN. They can get it as a report from the system, or they can have the system e-mail them any time an incident matches their specified criteria."
The system was officially launched in June. Thirty retailers are currently participating, representing all retail channels. To date, approximately 1,000 major incidents are recorded in the system database, ranging from burglaries to organized retail crime, which is the dominant category in the system. Retailers enter new incidents every day.
The power of the system comes from the network of retailers using it: The more incidents they enter, the easier it is to spot patterns that can indicate organized crime. The system captures approximately 500 data points, making it extremely comprehensive. With so many possible data inputs, the NRF had to set up standards for how incidents are classified, to make sure that every user is on the same page.
"That was one initial feature that we put into the system that our retailers requested," notes LaRocca. "We classify things by what we call incident type: burglary, cargo theft, or organized retail crime, for example. There are nine incident types that are in the system that cover the major incidents that we see in retail. From those incident types, we set up the methods of the crime to match each incident type. So if someone had forced a door open and entered the building when it was unoccupied to steal merchandise, that would be classified a burglary. If someone came in and threatened a sales associate and stole merchandise, that would be classified a robbery. So to be classified a burglary, the incident must involve an unoccupied structure, and that language is spelled out. We have the system control that data in the fields, so you can't enter the wrong information."
The data collected covers areas such as the type of crime and how it was committed, how the perpetrators entered and left, what types of tools they used, or whether they threatened an associate or customer.
The system is designed to accept data in three ways: directly into the online system via the Internet, through an XML-based import feature that imports historical data from the retailer, and by having the data automatically uploaded from a retailer's case management system.
The third method will be made available in the coming months. Using this method, the retailer merely enters the information into its own case management system, checks a box, and automatically exports the data to the network database.
"We're ready to go with this functionality today, but it requires some development on the retailers' end," says LaRocca of the automated option. "Two chains are currently developing a conduit. Also, there are two case management software vendors -- which have several hundred retail clients between them -- that are building a form in their system to give retailers the option of having them automatically transfer the data."
Photos can also be uploaded into the system as well, giving users a better overall picture of each incident.
"Usually when there's an assault committed, and it's an assault that's across multiple retailers, it's usually tied into something else, like a robbery or an ORC incident," says LaRocca. "Otherwise it's completely local, and while it's a major incident to the retailer, for the purposes of looking at it nationally, that's not something the system was designed to do. So if one of a store's employees had a fight with a manager, that won't be in the system."
All of this data can be sliced and diced in a variety of ways, depending on the needs of the user. A recently added function, eFolders, makes it even easier to organize the system's data. Users can select like incidents, based on specific criteria, and place them into a virtual folder. For example, incidents can be grouped by geographic region, type of crime, or dollar amounts.
Using the network
Users consist of two groups. First, there are the direct companies within the system, such as retailers or law enforcement agencies. The second group is the NRF Investigators Network, which is made up of 600 retail employees across North America whose primary focus is the investigation of retail incidents. They help gather information, cleanse the data, and then shoot it back out into the field. The NRF's Human Intelligence Network consists of both of those components working together with the electronic data.
Users can choose their level of anonymity -- they can hide their company name and information, and those that are concerned about competitors seeing their information, even anonymously, can choose to share their information only with law enforcement. "It's their data," stresses LaRocca. "They have full control over who sees it."
Since the RLPIN system was created in-house by the NRF, the organization continually enhances its functionality according to user needs. One recent enhancement was a field for an FBI tracking number. "Our law enforcement users requested that we add a field for an FBI suspect-tracking number," says LaRocca. "Through the warrants system, each suspected criminal is assigned a unique number. When the law enforcement community is involved, they have the ability to input the FBI number so they can have continuity in tracking a person related to the overall crimes in the system."
The FBI number makes it easier for law enforcement to cooperate with retailers as well as with each other, since it provides a common data point.
Other recent enhancements include the ability to access the system via a company's VPN, summaries of recent incidents, and the ability to plot the incidents on a map so users can see incidents relative to a specific region.
LaRocca says he's also working on some innovative enhancements to adapt to the growing sophistication of retail crime. For example, he's currently developing a module that would upload security camera feeds that could be viewed along with incident information.
And to address the growth of e-fencing -- the selling of stolen, counterfeit, and fraudulently obtained merchandise online -- the NRF is also testing a module that analyzes online auctions.
"[After] the merchandise is stolen, it's often sold online through sites such as eBay," says LaRocca. "The module monitors auction sites looking for product that may be of interest to the retailer -- for example, if a few cases of infant formula are being sold in an online auction. The next part we're developing links electronic data points like e-mail addresses, auction IDs, and screen names to build profiles of those potential fences."
The overarching goal of the system is to leverage the intelligence gathered from its users' network to detect patterns in retail criminal activity. This enables all retailers to take better preventive measures at their stores, and also eases the burden on law enforcement agencies that investigate such crimes.
"We know we have great partners in law enforcement, and they care about what happens at retail stores," says LaRocca. "Unfortunately their focus is on things like murders, robberies, rapes, and antiterrorism. So if we can pull together these facts and present them as a collective case to law enforcement, we're much more likely to get a detective assigned or get the FBI interested, and get some real movement on investigation resources."
At only $1,200 per year, the system costs much less than what's stolen annually from stores, yet some retailers surprisingly still balk at the price. Those looking at it as an investment may save many times that amount with the information it provides. Those retailers that don't might well change their minds once they become victims of ORC. The hope is that by then, it won't be too late.