Market News

Fraud prevention and fraud detection in retail

According to the Sensormatic Shrink Index report, trade frauds are very common, and investing in tools to minimise their presence in the store space really makes sense. The market of fraud prevention and fraud detection solutions is developing more and more intensively. However, the question is how to prevent fraud and which solution works best for this purpose?

How to prevent fraud?

Bartłomiej Łatka, Sales Director at Euvic IT

In order to prevent and thus reduce the scale of fraud, it is first and foremost necessary to know the sources of the fraud and then to select appropriate measures to counter it. The Sensormatic report indicates that more than half of all trade frauds take place in the shop space, and as much as a quarter of them take place with the participation of shop staff. However, as the supervision of shop space by security staff is very costly, shop owners increasingly direct their thoughts towards technical protection. For as much as 62% of the respondents, technical protection is an area of key investments, whereas only 10% of the respondents admit that they do not invest in this type of protection measures at all. Fraud can be prevented in three ways.

First of all, thanks to the monitoring. Customers know that in every store they are closely watched by cameras. However, skilled thieves know that it is impossible to effectively observe images from many cameras simultaneously. In small convenience stores there are at least a few cameras, in supermarkets – a dozen or so, and in hypermarkets – more than 100. Furthermore, due to technical reasons, it is unrealistic to browse thousands of hours of post factum recordings. On the example of Zabka store chain – 4 cameras installed in one store, recording for 17 hours a day, is 340 hours per week. On a monthly or annual basis this number becomes really impressive.

Secondly, thanks to the analysis of data from cash systems. As you can see in the chart below, there is a lot to be learned from data coming mainly from cash and payment systems.

Source: Sensormatic Shrink Index, 2020

 

But what next? Let’s assume that we managed to identify a pattern according to which the same customer (the same credit card ID) receives a small amount of money back to the card once a day. Fraud? Not necessarily. Or otherwise, 10 bottles of a particular type of whiskey are somehow stolen from the store every month. Monitoring does not indicate anything suspicious, but the inventory speaks for itself. Fraud? Without additional data, we are not able to finally determine this, and most importantly, to prove it. We do not know how the merchandise is killed, who is responsible for it and if our own cashier is not involved in it. So, the data itself is not everything.

Thirdly, thanks to the artificial intelligence used both in CCTV systems and in fraud detection tools to detect suspicious behavior. The cameras automatically count the number of customers, identify whether at certain times someone did not show up in the prohibited zone, check whether the cashier does not leave the workplace. BI systems, on the other hand, capture repeated complaints and unfinished card transactions, and thus, from among the many data, they select those situations that require special attention and take appropriate preventive measures.

Fraud prevention and fraud protection to meet the needs of modern business

All the elements described above combine the solution developed by Euvic and March Networks. This tool is, in principle, an advanced fraud detection solution. However, its use causes both employees and customers to realize that suspicious events are being monitored, which makes it also unwittingly start to act as a fraud prevention system.

How does it work in practice? At the store level, cameras equipped with software specializing in fraud detection and artificial intelligence module, record accurately parameterized image in the DVR, typing out fragments of recordings in which AI has detected suspicious behavior.

In parallel, the same artificial intelligence analyzes data from the cash register system, marking transactions that by definition require attention (e.g. returns or purchase of alcohol) and transactions that are potentially risky in connection with video data (e.g. return of goods and absence of a customer at the cash register).

Such transactions are reported e.g. to the store manager, regional director or the team of Investigation Consultants, who additionally review the events and evaluate them for potential fraud.

What does this review look like? A consultant (a person experienced in detecting and analysing shoplifting) reviews transactions and views the corresponding camera record. He or she assesses the level of probability of fraud, checks the possibility of participation of a shop assistant in such an event and identifies potential patterns that are used as a basis for preventive actions, also in other shops.

What is the uniqueness of this solution? Artificial intelligence used in it allows to combine data from two different worlds (image and transaction data), provides tools for taking action at every level (shop, region, headquarters) and guarantees remote expert support in the area of shop fraud.

The March Networks platform, on the one hand, allows for connecting existing cameras to the surveillance system and, on the other, allows for secure management of CCTV images and data at the level of any complex organizational structures.

Summary

Investment in fraud prevention and fraud protection systems is crucial for the functioning of the whole company. As one of Zabka’s avenues points out in an interview with Liberal Culture, fraud, and it is often the fraudulent activity of its own employees that can even lead a company to bankruptcy.

Leave a Comment

Your email address will not be published.

You may also like

Market News Trends

Polish state to consolidate the agri-food sector

post-image

The Ministry of State Assets (MEP) is working on the merger of companies from the agri-food sector, which are under state supervision. The National Food Holding (NHS) is to be established in this way.

June: selection of companies for the holding company

The consolidation will be based on the Krajowa Spolka Cukrowa, which is present on several markets, including sugar, starch and grain. The objective is to create a strong agri-food holding and enter new business segments. The idea behind the consolidation undertaken by MEP is that “on the one hand, consumers should receive competitive prices, and on the other hand, farmers and manufacturers should be well paid for their products”.

Currently, 48 companies that could be part of the holding are being analysed. The plan provides that the companies to be consolidated are to be selected in June. By the end of the year, more detailed research…

Read More
Market News

Robotisation in retail & logistics – overview for 2020, part II

post-image

Bartłomiej Łatka, Sales Director at Euvic IT, writes in the second part of the article about what robotization has to offer to the retail segment in 2020.

Mobile robots

Bartłomiej Łatka, Sales Director at Euvic IT

Recently, mobile robots have been pushing people out of storage space in large warehouses. There is a shortage of warehousemen throughout Poland, and warehouses often located on the outskirts of cities or even in the fields, struggling to provide staff. Especially during the holiday or flu season. Relatively high salaries, regulated by the law for working at night or on public holidays, as well as the risk of loss of manning – all that makes automated internal transport systems seem to have the best years ahead.

Among mobile solutions in trade and logistics we can distinguish the following groups:

  • Transport P2P (Point-to-Point) – AMR trolleys carrying baskets…
Read More
Market News

Glovo grows in food delivery in Poland

post-image

The Glovo mobile application, which specialises in on-demand deliveries, has just exceeded 1 million downloads in Poland (App Store and Google Play). Although a wide range of products can be ordered with Glovo, it is widely used to deliver food.

Glovo in Poland: 1 million application downloads

Glovo has been operating in Poland since July 2019, following the acquisition of PizzaPortal.pl. The idea behind the application is to be able to order “anything” and delivery takes place in less than an hour. Glovo has over 2,700 partner points in Poland, including McDonald’s and KFC restaurants and Biedronka and Carrefour shops. The application operates in 30 cities in Poland, but Glovo announces a systematic expansion of its offer and development of all order categories. In total, around the world, the application is used by approximately 2.6 million users per month. It is available in 22 countries and about 550 cities.

The most numerous…

Read More
Market News

Tesco is developing a click & collect service in Poland

post-image

Tesco develops its activities in the e-commerce segment. In May, the company added five new cities for the “Zamow i odbierz” (click & collect) service in Poland.

14 click & collect points

New locations where the service is available are Czestochowa, Zielona Góra, Opole, Kielce and Jelenia Gora. Thanks to the extension of the network of collection points, it is now possible to serve 15% more customers under this solution. In total, currently the click & collect option is available in 14 Tesco stores across the country. Around 2,000 customers use such purchases every week. The chain announces that it will soon introduce further novelties extending the scope of services.

Purchases made in the “Zamow i odbierz” option can be picked up in the store or delivered home by a taxi company cooperating with Tesco. When completing an order via taxi, payment must be made online. In case…

Read More
Market News

Robotisation in retail & logistics – overview for 2020, part I

post-image

As far as saturation with robots is concerned, the Polish market is unfortunately in the tail of the rankings, which is quite surprising if we take into account, for example, Polish GDP (where we have 22nd place in the world) or Human Development Index (Poland with 32nd place in the world).

Bartlomiej Latka, Sales Director at Euvic IT

In 2014, roboforum.pl wrote that “Poland, with the value of the index at 18, is at the bottom of the ranking. Higher density of robotization than Poland is characteristic not only for countries that are among the leaders in this respect, but also for countries with a similar level of development, such as Hungary or Slovakia. The average robotisation density in Europe is 4.4 times higher than in Poland (compared to the previous year, Poland reduced the distance to Europe by 1.1 points),…

Read More
Market News

Camaieu is leaving Poland

post-image

Camaieu clothing chain, specialising in women’s clothing, is leaving the Polish market. The company’s website has already stopped accepting orders and the stationary stores are to be closed at the end of June.

Camaieu is looking for an investor

As far back as 2018. Camaieu operated about 40 stationary stores in Poland. However, the chain has recorded negative sales dynamics in recent years, and the number of stores has been gradually decreasing. Currently, it amounts to 25. In total, the chain operates about 1 ,000 stores in 18 countries, more than half of which are located in France.

The COVID-19 pandemic and the closure of shops in shopping malls have worsened the company’s situation, but it has already been struggling with financial problems. According to Business Insider, the company planned to implement a restructuring plan from the spring, which was to include the closure of 125 stores in…

Read More