Factors for Complete Loss Prevention

Hello, I am President C. Pal Singh. Very good evening to all the delegates and the learned speakers who have joined us in the series of interactive session on Factors for Complete Loss Prevention, under the series Understand and Be Understood, which is being hosted by NISSMAT International. Let me introduce NISSMAT in a few words. This was established in the year 1919, about three decades back. It started training courses in the field of private security, safety, security management and applied technology. It also conducted courses for the retired defense personnel for their second career in the private security industry.

NISSMAT aspires to become the foremost corporate training institute and a think tank organization in the field of security and safety. NISSMAT has now started four wings: NISSMAT Forum, to organize webinars, seminars, conferences, interactive sessions, debates, declarations, etc.; NISSMAT Academy, to conduct virtual training programs, assessment, certifications; and NISSMAT Enterprise, to undertake audits, surveys and also to establish partnership and international alliances; NISSMAT Foundation, to undertake welfare and social work for the society at large, with particular reference to the subject of security and safety.

With this word, I now go forward to introduce the chairman and moderator of this session, Mr. Pawanjeet. Mr. Pawanjeet took voluntary retirement from the Parachute Regiment of the Indian Army at a very young age and jumped into an unknown area of business. His warmth is contagious, I must say. He is able to bring out the best in other people, like his associates and employees. I would say he almost has an internal sense to find out the silver lining in a situation. Person of impeccable manner and style, he has courage of conviction, a thoughtful and inspiring leader.

He has created a business group under the name of El Walaya Holding Company, which has offices at multiple locations in India and abroad. With his continuous hard work, risk taking abilities and at times learning from pitfalls, etc., he has grown, involved and achieved his position of prominence in the interesting business world. The past president and former chairman of Council of International Investigators, USA, he is an awardee of Malcolm Thompson Award and Kotalia Award by the Council of International Investigation. Mr. Pawanjeet shall moderate this session.

Let me introduce in a few words the subject itself, that is, factors for complete loss prevention. Now the loss prevention encompasses the whole gamut of services from point A to Z in any organization. Normally the points of working out transformation strategy in any units will include first a good risk analysis exercise to find out, identify the lacuna in the organization or in the security policy. Then it also needs to have cooperation from the members of the security staff as well as non-security staff who are involved in various processes. Then it has to have training essential for those working at various levels. The trainer himself should have adequate understanding of the aim of the organization, particularly in the end the packaging and the taking of the finished products have to be kept an eye on.

Survey of the area adjacent to the location of the unit, that is external grounds, need of clear area bordering the parameter wall or fence, or any other elements which are going to be innovations for the organization — this has to be identified. Factors like access control, intruder alarm system, CCTV monitoring, and also an engagement of vendors particularly has to be given proper importance. The planning background investigation that implies is essential.

Now coming to the retail sector — probably our speaker will delve at length on this — the retail sector, on which the speaker is probably going to focus more, is a very important sector. Risk should be identified and analyzed in a retail sector, not isolated but as a whole. Every person associated with the retail sector loss prevention organization, or loss prevention audit, or loss prevention analysis, should be aware with the general and traditional areas of risk, including fire and electrical safety. Stealing by own staff or shoppers has to be kept in view. Vulnerable areas like back doors, deliveries, stock controls, pricing, purchases by staff relatives, shoplifting, etc., have to be kept in view.

I would like to conclude with one word, that one line: that money spent on the security and loss prevention audit should be regarded as an investment and not a cost to the organization. With these words, I like to pass on the proceedings to Mr. Pawanjeet, who is going to moderate this session. Thank you very much.

Thank you very much, Mr. C. Pal Singh. I'd like to begin by thanking the sponsors of the event. The sponsors for today's event are Primary Shield Private Limited and Premier Consulting and Investigations Private Limited. The event is also supported by Tax Course, which is an examinations platform; India Skills Private Limited, which is an asset company; and JMD Cargo, which is a logistics company. NISSMAT is also offering sponsorship opportunities for your products or services, so in case you wish to sponsor the event, please contact the NISSMAT staff for the opportunity.

Today we have participants from India, Bhutan, France, Senegal, Singapore and the United States. May I request all participants to keep themselves muted and also have your videos on so that we can see you. The event is on live on YouTube and Zoom at this point of time, and after the event you could view this on the NISSMAT website and also on YouTube.

I now take a minute to introduce our president, Mr. C. Pal Singh. Mr. C. Pal Singh is a Masters in English Literature. He has served the police services in very senior appointments in the Government of India. He was also the first chief of the Rapid Action Force, and he also raised this force in India. He also raised the Indian Police Academy in the Indian state of Rajasthan, and during his distinguished service with the police, he was awarded the President's Police Medal for Distinguished Services, the Indian Police Medal for Meritorious Services, the Police Special Duty Medal with Bar, Asana Medal, and a number of other commendations and rewards.

Post retirement, he worked as a consultant with the Tata Iron and Steel Company and was assigned the responsibility to streamline the security and vigilance matters in the cold feet division of TISCO. He was the chairman of the technical committee of Quality Control of India, which formulated the standards for star rating of private security companies. He was involved in developing the curriculum for private security guards under the Security Sector Skill Council. He was the head of the committee which designed and worked out national occupational standards for the training of private security guards and qualification packs, and national occupation standards for firefighters.

He was awarded the Security Personality of the Year award by the President of India in 2009 in New Delhi. He currently is an adviser to the Asian Professional Security Association, the Indian chapter, and the Honorary Director General to CAPSI, Central Association of Private Security Industry in India, and the Association of Private Detectives and Investigators of India. Mr. C. Pal Singh's face is well known in India as a dynamic security professional. He is frequently called upon to share his views on various subjects connected to homeland security on national news channels. This was our president.

And now I have the distinctive honor to introduce Mr. Johnathan Tal, our speaker of the day. I have known Mr. Tal since the 1990s, early 1990s, and maybe I think I know him now for about 30 years. Johnathan Tal is the President and Chief Executive Officer of TAL Global Corporation, an international investigative and security consulting firm. Mr. Tal served as a military field intelligence officer for the Israeli armed forces during the early 1970s. As an intelligence specialist, Mr. Tal supervised and initiated behind enemy lines intelligence gathering, relying on both hardware systems and personnel.

In the late 1970s, Mr. Tal served as an anti-terrorism security specialist for the Israeli government. His responsibilities included supervising highly specialized personnel and interacting with the international law enforcement agencies and the European intelligence community. This involved the protection of El Al, the Israeli airline — passengers, planes, staff and property — in the greater London area, including the four airports then used by El Al: Heathrow, Gatwick, Stansted and Luton. During this period, Mr. Tal conducted investigations and preventive operations designed to decrease the possibility of terrorist attacks on Israeli situations and personnel.

In 1985, Mr. Tal founded his first agency, which quickly became the largest investigative agency in the Silicon Valley. In 1998, Mr. Tal founded TAL Global, an international security consultancy with a unique service concept based on creating high value strategic alliances. In recent years, Mr. Tal has been involved with investigating and securing intellectual property, working for corporate and government clients. Mr. Tal is a licensed investigator, certified private investigator, and holds a Bachelor of Sciences degree. He served as the president of the World Association of Detectives in the year 2000-2001. Mr. Tal is an accomplished and dynamic public speaker and lecturer. He is frequently interviewed for television, radio and newspapers on issues of terrorism and homeland security. I call upon Mr. Tal to speak to us on loss prevention practice for complete loss prevention. Thank you very much.

Thank you, Pawan, and good evening to everyone in your part of the world. I'm speaking to you from California, where it's about 5:30 in the morning. So for those of you in Europe, a good day. If there's anyone from Australia, I'll say it again: g'day. And I'm happy to be here. Pawan, you're right, I think we met back in the mid 90s in Goa at one of the conferences, and it's been a pleasure to knowing you ever since. I want to thank NISSMAT, C. Pal Singh and yourself for inviting me to this august forum. I'm very happy to speak here, and I hope to share some of the information that, as you've pointed out, it took me years and years, about decades, to accumulate. And really, wisdom and experience are only good when shared, so let's try and do that.

I understand there are people here in this forum who mostly are in business, whether business owners, executives, managers, students, people who are interested in commerce and in business. Business is a funny thing. You exist in order to create profit. If you don't create profit, you do not exist. And as our august president C. Pal Singh said in the beginning, loss is a scourge, and investing in loss prevention is really a strategic investment that is necessary and critical, and I want to talk about that in some detail.

I have limited amount of time today, so I chose to cover just one area of business, and that is the retail sector. The retail sector spans from department stores like Bloomingdale's and Macy's and Neiman Marcus to the corner spice shop or the coffee shop, or any business that is run and entertains customers and has an employee, one or more — fits into this category. So this is a huge swath of industry and business in the world today. But what's more important, retail loss prevention does project on other businesses. So if you run a semiconductor factory, or if you have a large software company, the same principles apply. So by focusing on the retail, I think I'll be able to give some specific examples that will help even those who are not specifically involved in retail. So let's jump into this.

What are the components? The components are people, and that's first and foremost the most important — I'll talk about people. Then the merchandise, or the product that's being sold by the retail; the property, the actual store or location; there's cash and credit being exchanged. And one thing that's very easy to forget and not think about is the brand, the reputation, the kind of trust and desirability. The businesses invest today millions and billions of dollars, and lakhs, and you know, millions of rupees, and all currencies, in order to build the trust and to be liked by their customers. And if that damages, there's a loss, and that loss can be quantified, and that loss is important. So again, we have people, we have the merchandise, the actual products, we have the property where the business is being operated, we have cash or credit that are exchanging hands, and then the brand, the reputation.

So let's talk about how do you start creating loss control. Because, you know, if you don't control the loss, your profit is being eroded, and if your profit is being eroded enough, you don't have a business. It's that important. It is critical to running a business, is to control your loss, to have ways to mitigate the loss and to strategically combat it. So it starts with training and awareness, and Mr. C. Pal Singh mentioned that. Employees at all levels need to understand why and how controlling the loss, both internally and externally — and I'll elaborate — impacts their business. If they're trained properly, all employees really become an extension of the loss prevention strategy and the loss prevention operation. It doesn't take, you know, a 40-hour course for employee to understand what to do when the shoplifter comes into the store. It's a few hours of training. It is good management, which is key to any business, and training and awareness, ongoing, by the loss prevention folks, whether it's one or more, is extremely important.

Let's start with external theft. When I say external theft, I mean shoplifters, people coming from the outside. This is very prevalent today. You know, post or during the pandemic, people are feeling the hardship. People are coming into the stores where the goods are — the goods that they want, the goods that they can sell. The resources are there. As you know, Jesse James said, when asked why you rob banks — because the money is there. Why do people steal? Because the merchandise is there. And that will — it's not something that we can stop completely, but we can deter and minimize it.

So the best deterrent to external theft is good customer service. You ask yourself, what's customer service has to do with deterring theft? Well, when you have employees that see every person that comes into the store, that go out and greet that person, that follow him and ask for his needs and how to best satisfy him — that is good customer service. That also allows for observation, for monitoring, and for proactive steps taken when there is an indication that that person may be interested in theft rather than in shopping.

Organized retail crime is a huge issue. Okay, this is not — we're not just talking about the old person, hungry, going to a store to steal a loaf of bread. There are organizations, crime syndicates, that are involved in jewelry, in high value items, in clothing. Variety of items are being stolen and resold via other channels. Recognizing the patterns and training your associates, the people that are on the floor, is key in preventing and mitigating loss through external theft.

Let's talk a little bit about technology. You know, many of you are in India. You are fast becoming the technology center of the world, and a lot of the technology is being made right there in your backyard. Electronic article surveillance — those are the tags that are connected to an article, clothing or a high value piece. I had great success in ink tags. Ink tags are those that, when you try and tamper with them, they will squirt ink and therefore render the item, particularly the clothing article, useless. And you know, when a thief comes in and he steals a clothing item and he tries to tamper with a tag and it squirts over all over the article, he's not going to go to the same store again and pick up an article that's protected with a tag.

Locking cases — you know, in the United States, for example, today, high value items, even things like razor blades, are not open for a large quantity pickup from a cabinet. You need to have a locked cabinet, you need to have a store associate come and open it for you. Cables — you've seen those in many stores, cables that connect leather goods and high value items so that an associate needs to come in and open it. So those are some of the basic technologies that are being used to prevent external theft. There are other technology — there are spider wraps, there are liquor bottle caps that are protective. There's all kinds of technologies that are being implemented.

One last one I'd like to mention is the RFID tags. It's a radio frequency identification, and when an item that has that connected — those can be very very small, they're miniaturized — and when that RFID tag is leaving the store, there will be an alarm. And when there'll be an alarm, a loss prevention agent can intervene and, with a good customer service, ask the customer, have you mistakenly walked out and forgot to pay? Well, let's walk inside and take care of them.

Internal theft. Internal theft is much more insidious. Internal theft is when your employees, who are in a position of trust and access and codes — and you know, we will talk about the cash register, etc. — but you know, internal theft is typically larger and harder to detect. So in our experience, going back to the 80s, we've had clients, you know, high-end clients such as Macy's and Ross and Bloomingdale's and Neiman Marcus and Saks Fifth Avenue, and they were losing tremendous amount of jewelry and high value items to internal theft. And how do you go about that? I mean, you have cameras in the store, but the employees know where the cameras are placed. You have loss prevention agents, but the employees, they do know who those are.

So what we ended up doing and deploying very very heavily was undercover agents. In one case that I remember, at a particularly fancy department store, they were having tremendous amount of jewelry loss. We put in a young lady who was a sales associate. She was working as a sales associate but trained as an investigator, in the jewelry department. She became one of the employees, and she worked there. After a month, in conversation in the lunchroom and on the floor with her fellow associates, one of them approached her and said, you know, how do you feel about letting me sit here for a little bit, you know, take a break? And she said, you know, why? And said, I just want to hang out. And she said, okay, fine, I'll go and have a cigarette and I'll leave you to it. When she came back, she noticed in the display there were two rings missing. And so she had her first target, and she started befriending that person. And I'll cut a very long story short: in four months, that lady took out 17 of the associates in the jewelry department, proving serious theft, which means thousands of dollars. But it takes time. It is not cheap. It's quite expensive to have an employee in-house, but it is a very very effective tool against internal theft.

Again, management training, exception reporting — anything that's out of the ordinary should be reporting. Having a confidential employee hotline for people to say, you know, saw Jim putting in something into his pocket, and having that be confidential — that's very helpful. And a reward program, giving employees an incentive to report what clearly is an internal theft. Also the audit trail — knowing, you know, where your merchandise is, when is it missing, when did you incur the loss, which department, what was it — is critical.

Let's move on to cash and credit. Obviously, when you have a retail establishment, you have money, and the money can be in a form of cash or it can be in a form of credit, and both of those — let me talk first about cash. Cash is very vulnerable. People can just put cash in their pockets and walk away, and it would be very difficult unless you have a way to deal with it. Also robbers — you know, even the fanciest places in the fanciest locations do suffer from robberies. So one of the things that we recommend is to have dropboxes for cash. So when cash is being received, it is not going into a till — large amounts of cash are going into a box that's not retrievable, I mean completely not retrievable. So if a robber comes in, the only money they can take, and the only money an associate can give them, is whatever is in the till, which is pennies. You know, it's just change in order to break a hundred dollar note.

Safes — you know, have safes for the registers that are smart safes. Some of them can be connected to the internet to report attempts of tampering, and can be used in a case where you have, you know, high cash situation. Counterfeit money detectors — there is technology that helps detect when you get counterfeit money. And obviously the daily reporting of cash shortages and the ability to flag transaction to supervisors even as they happen. In some stores there are duress buttons, so that not just for a robbery, but if a suspect comes in and there's a suspect money or the transaction looks to be, you know, maybe something that was returned, associates can call additional help, whether it's loss prevention or management.

Supply chain. Supply chain is an issue. A supply chain, when whole trucks — and we had a case, and it wasn't in retail, but disk drives. Disk drives, a high commodity, high value item, and our client was the manufacturer of Winchester disk drives, which were used in the 90s and early 2000s as the guts, the memory, of every computer. And they were making them by the hundreds of thousands, loading up to trucks and putting them on pallets and shipping them to other countries, and then they were downloading and going somewhere else, and a whole bunch of people were touching them. And there was a particular shipment that arrived that was manufactured in Silicon Valley — actually, no, I'm sorry, it was manufactured in Malaysia — and it went on a pallet onto an airport. There were, I believe, 10,000 drives that were contained when the shipment went out, and it arrived in Schiphol in Holland, and it was shipped to the customer. And when the shrink wrap around the pallet was undone, the inside of that pile was filled with car batteries made in Romania — used car batteries that were pretty much equal the weight of what a disk drive full pallet would weigh. Very sophisticated, very elaborate.

We ended up spiking one of those — actually we spiked a few of those packages, pallets — with transmitters. We hid a transmitter inside what looked like a disk drive packaging, and we put it on and we sent those on, and we were able to find out where the point of loss was. We never actually found the thief, but we were able to plug up the theft by identifying where it was lost and shoring up that security at that location. So supply chain, for any materials, can be vulnerable and should be looked at very carefully.

I know that my time is short. I'm gonna speed up here. How much time do I have? C. Pal, do I have five, ten more minutes? What's my time allocation? You're on mute. So he has time, sir, he has time for ten more minutes. I'll speak for another 10, 15 minutes. Yeah, very good, question and answers, not an issue at all. Very good, thank you.

So let's move to technology and talk about CCTV cameras. You're all familiar with them. They are everywhere, and they are a great tool to prevent losses in a retail environment, not just in the store. And let's talk about the store first. Cameras today — camera technology is not just the lens and the ability to record. It's more importantly, it's the ability to sync and to relate the event that's being seen to an alarm, to a data bank, to a face recognition, item recognition, all of that. So back in the days when we were doing the work with the department stores, they just were installing CCTV cameras where a loss prevention person in the back room could actually track a customer walking into the door by a camera, going into the jewelry department, going into household department, going to clothing, and then coming back to jewelry, and you could focus on that customer or person, whether it's a thief or a person, throughout their visit.

Nowadays you can do a lot better than that. You can identify the face, you can identify the vehicle that's associated with it — you have cameras outside. You can correlate with the data bank. National Retail Federation has some very very powerful databases of shoplifters who are known, organized crime, etc. And CCTV is really the guts of this technology, and you can couple it with audio talk down enablers. For example, if you have someone who's coming in with a weapon, you can actually have communication through the CCTV with that person and negotiate down — basically kind of do a hostage negotiation through that. Video analytic — and pinpoint areas where you want to specifically look at: back doors, storage, back area of the store. It also can be integrated with the POS system, the cash register, and you can see if there's a serious transaction or a suspicious transaction, you can see who's responsible for that, bring up the view on your CCTV, throw it on to your analytics and to your database, and see in real time if that correlates to any organized crime or other nefarious activities.

Okay, so, heat mapping. Heat mapping is something that is not quite deployed in retail because of cost, but as costs go down, I think a potential future tool that can quickly and accurately identify suspects. And it may sound futuristic, but when a person is perpetrating a theft, their body temperature will go up. You know, even if they are fairly experienced and have done that before, their pulse will change, and you can detect it. So heat mapping and behavioral analysis, through video and through sensing, is a field that's up and coming, and you'll see that more as costs go down.

So the major stores in the US now are doing self-checkout, and there are pluses and minuses to that. They're clearly highly monitored, but there are opportunities for theft, so that's being explored. The next technology in that is a no scan. I mean, today when you do self checkout, you need to scan the barcode and the cash register will beep at you, and you do it yourself and you put the items in the bag or in the trolley that you are using to shop. In the future there will be a self checkout that won't even use scanners. You don't need to present the barcode — it will know what's in your bag, it will know what's in your cart. It will give you a total with the itemization of the items just by reading the identification. It won't be barcode, it would probably be RFID technology that will tell the person collecting your money what's in that cart that's leaving the store. So that's coming.

Let's spend a few minutes talking about alarm systems, access control. Those are technologies that have been around. The alarm systems that, let's say, a small or even a large retail establishment has should include areas that you don't normally think about, like skylights. You know, we've seen more theft being perpetrated from people not coming through doors or windows on the ground floor, but really climbing up a large department store roof and breaking the skylight and coming down from there, because there's no motion detector, there's no contact there, and in they go. So it's really about thinking outside the box, thinking like the perpetrator, and implementing the system appropriately.

Access control is important. It's a challenge in a retail, you know, in a healthcare environment. Really, it's not like a factory where you can control every single person, because you want your customers to come in, you want them to shop. You can't have them have an ID check or a magnetic strip being used. So your access control really reverts back to what I was talking about in the beginning, which is good management, good customer service, good procedures for loss prevention, extending the ability for you to deploy loss prevention agents by enlisting every employee and training them.

Audits. Audits need to be done, you know, daily, weekly, in a variety of ways. I'm not going to get into it — it's an important topic. It lets you know where your losses are. In general, I'll just give you a couple of statistics. In the US, if you have anywhere between two and three percent of loss from a retail establishment, you're doing okay. If you're in the four, five, six percent, this is dangerous territory, and you're eating into your profit margins, into your bottom line, in a very significant way. And when an audit comes back and you have five percent loss, the CEO is going to be bringing in the loss prevention manager or the security director and raking them over the coals, because they're not doing their jobs. It's critical.

Some of you, I know — because some of my friends here are in the security guard business — security guards are important to any establishment, as well as retail. They provide the observe and report function. They provide deterrence, and deterrence is important, and for deterrence you need to be training them to do what needs to be done. They also provide a certain sense of security, particularly in areas that are not the most savory. Where you have a high-end retail store, customers would prefer to go in if they see a security guard outside and are not subjected to, you know, walking out with expensive items and being robbed. Security guards, though, can be a huge cost factor, and they can be ineffective if not trained properly. So they have to have a guard tool system so that they do their job. They patrol, they are in areas that are randomized, so that an observer, a potential perpetrator, cannot just sit there in the bushes and say, okay, I have 17 minutes until the guard comes back, let's break through this door. So it needs to be randomized, it needs to be well thought, and they need to be accountable to what they're doing.

Some bad news for you guys. Pawan, I know you have a good number of security guards in your employment. The trend is to replace human security guards in retail, particularly in retail, with robots. There is a robust robot industry sprouting. There are thousands of them being manufactured. I actually have visited a company that produces them. Those look like a figure from Star Wars, and they roll around, they identify people, they can talk. You can have the security operation center communicate with the person, you can do a number of scans. And so the deterrence factor, the presence, the sense that you are being observed, can be achieved without paying a security guard to actually walk over there. The robots are durable, they are obviously rechargeable, they communicate with each other. There's a lot of advantages, and I think the security industry is best advised — and I know at least one global security company, Securitas, is deploying them in a number of locations, retail, high-end shopping malls, as an alternative to human guards. And I think that is coming. It is coming. It's not completely going to eliminate the need for humans, but it's definitely going to curtail the numbers of human security guards on location.

I am going to stop here and open up the discussion for questions. It's been a pleasure talking to you and sharing with you, and I look forward to some stimulating and interesting questions.

Thank you. Then I'm going to ask you the first question, and that is: return frauds have become a very big issue now with a lot of companies, as well as with the companies like Costco and so on. What are your comments on the return fraud business?

Hold on just a second, I lost your signal. Yeah, okay, there you go. Return — we're talking about return merchandise, return frauds. So those are part of the system of analytics. When you see one person returns items on the system — I mean, when you have the odd return of a shirt, I don't think retail organizations are really interested in that. I think customer service, and service in general, takes precedence, and they'll just return it to create the trust and the brand affinity that they want to create. But they do take information about the return, about the person. They take the credit card, they take the person's name, etc. They do analytics with it, and when you see one person returns incessively and large amounts of items and high cost items, then you can start an investigation into the potential organized retail theft ring and getting to the bottom of that. So I guess my initial answer to this question is, if it's minor, there's not much done. If it's major and repeat, there are ways to combat it.

I have another question. How do you prevent under charging in retail?

So we've had that, and the undercover technique was working very very well. I think the reward and the hotline, and really working with — because you need to have an employee collude on the undercharging. Okay, basically the customer will come in and will pay less than the amount due. The employee will ring it as a fully paid and will pocket the change. That's what we're talking about with undercharging. And because you have collusion with employee, those same tools that I was talking about with internal theft, those are the ones to be deployed. You incentivize, you train, you do a confidential hotline, and when needed, when it's really a major problem, you can use undercover.

In the retail industry, you would have done a lot of jobs where skimming from the cash register would have occurred. Can you just sort of give a case study or something that you did, and how did you prevent skimming from the cash register occurring?

So the easiest thing has been — and it's been the technique that we've used many many many times — is to synchronize the cash register to a camera. And you put a covert camera in the ceiling or somewhere. You know, with today's cameras, they are really high quality and very very sharp. You can see what's going on, even the coins and the bills that are changing hands. And when you audit it afterwards and you see where the loss is, you can actually see the employee who's doing the — you know, who's pocketing the shortage. You confront them with them, you do an investigation, you take them over, you put them away. Very effective.

How important in your opinion is the pre-employment screening of employees?

Huge, huge. I think, you know, I'll tell you a personal story about this. When I started my first business in 1985 in Silicon Valley, no one was doing pre-employment background checks, and I mean no one. We were working with high-tech companies. IBM had a big disk drive manufacturing. They were losing significant amount of merchandise. They didn't know why. And we, at that time in the 80s, had an influx of immigration. There were large groups of people come from, obviously, from South America, but also from Vietnam. And we had a ring in one of the chip manufacturers. I don't know if you remember the 386 chip of the IBM processor, which at the time was 300 — I mean, you know, just a chip about this size was 300 dollars — and those were being stolen by the hundreds. Okay, I mean, people were carrying them on them. It was a big thing.

And we start implemented at one of our client companies a pre-employment background check, and we found that a third of the employees at that time had prior criminal records, and there were rings of crime going around in those manufacturing, those assembly locations. And we were able to eliminate it just by implementing background checks, pre-employment, on every person that walks in. Today, to date, if you look at statistics, people lie on the resumes, people lie about their salaries, people lie about their backgrounds. They plug in holes in their employment history with fiction. If you don't check it, you don't know what you have, and frankly, you open yourself up to a huge liability.

One last question for me. People steal because there is a motive and there's an opportunity, correct? How do you prevent these two things?

So we talked about the opportunity. Okay, I think throughout my talk here, really reducing the opportunity is something that's within our control. The motive is built into society. I mean, there are people that have more and people that have less, and those that have less go into a place with abundance — there will be the motive. And the solution for that is more society than it is a business solution. Although, I gotta tell you, there are businesses today that have an outreach to the homeless community around them. There are large food chains, supermarkets, etc., that would give the homeless population — my daughter goes to college in the city of Portland, Oregon, and Portland unfortunately has a major homeless population issues. The supermarkets, Whole Foods, top end, you know, really expensive stores, when they have extra food at the end of the day, instead of throwing it out, they provide it in a central organized way to the homeless population. So there are ways by way of community outreach, by way of philanthropy, by way of societal change, but I think it's outside my purview. I wish I had a solution for that, but I'm afraid I don't.

You know, I want to ask John, who's a sponsor for this event — they run a background screening company — I'd like to ask his views on his experience with the background screening in the retail industry. Over to you, John. Unmute yourself, John. John, you're still muted. As a basic problem in the retail industry, you have a comment to make? Kindly unmute yourself.

Yeah, I was just mentioning — can you hear me? Yes, can you hear me? John, it's okay, we can hear me. Yes, yes, yes, please carry on. I was just mentioning that pilferage is the essential subject that we have covered here today, John. And somehow I have this observation, and entire through my experience I felt that in case we can maintain our stocks in a foolproof manner and carry on regular stock checks and the loan checks, pilferage and losses can be prevented to a substantial extent. What would you like to say about this? Thank you.

Can you hear me now? Yes, yes. Okay, so if I understand the question, it's about maintaining your stock and understanding what do you have by way of supply, and what merchandise you have. Is that the question? That's right.

Okay, so this is what I throw into proper management. You know, if you don't know what you have, and if you don't audit it, and you do not know that you have losses, you really are running your business very poorly. Because every business needs to know what there is on supply, what there is to sell, when to order additional supplies. I mean, your finger needs to be on the pulse of what's going on with your stores and your supply, and preferably in an automated way, or at least a semi-automated way that you can audit. So in modern businesses, when something goes out from the shelf and being scanned out through the POS system, immediately the purchasing system is being alerted that an item has been removed and needs to be replaced and need to be bought. Now, a human needs to audit this, but if you don't know what you have and you don't know what you should have, you have no control over your loss percentages, and you are doomed to be victim to pilferage. Yes, there will be no accounting.

John, are you okay now to ask your question? I'll try, sir. Jonathan, one last question before we end. What are your suggestions for creating a good loss prevention program in a retail industry?

So a good loss prevention program should begin with a person, with a champion, with someone who knows what they're doing and can propagate through the organization, through management. Needs to come from the top, with a desire to make it effective. Needs to come with a budget, but it needs to have that champion who knows what they're doing, perpetrating and percolating proper procedures of loss prevention. There are a lot of resources globally — National Retail Federation, you know, ASIS. I mean, there's a lot of good information about proper standards of retail loss prevention that can be implemented. But if you don't have the champion, the internal champion, who advocates good management, with incorporating first of all the inexpensive principles and the inexpensive components of loss prevention, and then go into sophisticated technology if you need to — because you don't always need to. If you're a coffee shop, trust me, you do not need to have the FBI database on your computer system. You don't, you know. The organized crimes are not going to come in to steal a large amount of coffee. It's the pilferage from a passerby, it's the opportunity. You need to just manage your place in a way that will discourage theft, and therefore your bottom line will grow, and you will be happier, your spouse will be happier, life will be better.

I thank you so much, Johnathan. I think we're running out of time now, and I'd like to hand over the proceedings back to the president to conclude the session. Thank you.

Thank you very much. A very very extensive as well as elegant and eloquent approach. Doesn't need any additions from me, but I must mention that he has covered the entire gamut of activity, started from the customer service right up to the end, where he says that the manpower deployed has to be also checked, like a guarding unit who is deployed there. He referred to organized crime also, and he referred to the technological development and how they can be used to prevent losses. He very finely narrated some of the incidents and case histories to elaborate his point.

After listening to him at length, I still am of the view that the total loss prevention is perhaps only a concept. The loss will be there somehow or the other, but total loss prevention seems to be only a concept and may not be practical to be achieved. Yet, very important factors projected by the speaker in his deliberations provide a pragmatic, I would say, and a very modular approach to loss prevention strategy and policy to be adopted. We are thankful to him for having shared his thoughts and his experiences with all of us, and I am sure that many of his points would have impact on the loss dimension added by the units — some of the representatives or units who are attending this dedicated, this particular session.

One point which I like to emphasize — someone asked the question that what is the way out, and has to have some, I mean, maximum loss prevention. Though the speaker referred to this, but I like to give one point. The most important factor is for any business organization to have somebody — he referred to intelligence — in effort to the intelligence, the most important factor for any business group is to have some intelligence unit who should be able to keep an eye and inform the organization, and subsequent to that, the audits which are conducted from time to time with the unit can go a long way in loss prevention.

With these words, I thank the speaker and thank the delegates and thank the chairman for this very very interesting and interactive session. The next webinar is on the subject of impact of 5G in daily life. That is scheduled on 8th of October at 6 pm, and the impact of 5G in daily life, you can understand, would involve also not the impact on the utility of the 5G, but also certain factors concerned with environment. And with these words, I again request the delegates to join us at this international webinar. Thank you very much, everyone.

Jonathan, thank you so much for getting up early in the morning today. My pleasure, my friend. I will get up any time for you. Thank you so much, take care. All right, thank you, sir. Thank you very much. Wonderful, thank you. Thank you.