Industry experts recognize five major categories of retail inventory loss:
Most studies show that total internal losses are slightly larger than the total external loss. Most inventory loss in the retail sector occurs at the POS. The combined loss from the warehouse, from the store and from supplier fraud is less than the loss from the actions of both employees and customers at the POS.
POS systems can be deployed for use by employees in traditional staffed checkout lanes or by customers at SCO lanes. The retail industry has long been aware of the occurrence of internal loss at staffed checkout lanes. This loss is a result of employees servicing friends, family, or coworkers, a practice referred to as “sweethearting.” More recently, the increasing popularity of SCO options in the retail sector is creating an even higher risk for both accidental and intentional inventory loss at the POS.
Whether accidental or intentional, methods that reduce the payment that is owed at checkout include:
Mis-scanning an item
A UPC code from the lower-priced item must be passed between the scanner and the higher priced item so that to a casual observer the transaction looks normal. A trained security professional might be able to detect the behavior, but the industry sees many benefits if an automated security system is deployed to detect such behavior.
The three most common approaches to ticket switching are:
Typically, ticket switching occurs less often than mis-scanning and is used to remove items of higher than average value from the retail store. This type of scan fraud is of higher risk to would-be shoplifters because there is less plausible deniability. Additionally, this technique can become more prevalent as shoppers become more familiar with SCOs and how to exploit them.