Interview: Aurora Fashions group head of security Mitch Haynes

An eCommerce-related retail crime having a significant impact on retailers' margins is that of delivery fraud, according to the group head of security at Aurora Fashions Mitch Haynes.

Fraudsters' ability to set up multiple email accounts and choose a variety of delivery addresses means it is difficult for retailers and the authorities to get to grips with this particular retail crime, says Haynes, who believes it is a growing problem for the industry.

Retailers' natural inclination is to provide good customer service, so claims of non-delivery are typically taken at face value, which often results in duplicate orders being sent out to the same person. This represents good service when the claim is authentic, but a blow to the bottom line when it is a case of fraud – and finding out the truth is not a straightforward task.

"The automatic reaction from retailers is to duplicate the order and that is what we and most other companies I know will do – maybe more than once," Haynes explained to Essential Retail.

"Most retailers have a flag system that will identify customers who have had a number of repeated orders or delivery difficulties. Once this is flagged they might then ask the customer some more questions and start an investigation."

Last year's British Retail Consortium (BRC) Retail Crime Survey indicated that total fraud incidents in the industry had risen 80% year on year, with the vast majority occurring online.

Haynes cites delivery fraud as the one of the industry's biggest challenge when it comes to reducing crime and he is planning to discuss his thoughts in more detail during a panel debate at this year's BRC Retail Crime Conference, which will take place in London on Thursday 2 October.

"We are looking at better ways of measuring it," said the security boss.

"Companies that are purely eCommerce would have better information on this, without a doubt. I think those who started as a high street retailer but now have quite a large multichannel operation, like us, have got to find a better way of dealing with this issue – and we will."

Industry collaboration will be crucial in this regard, and retailers such as Aurora, which is currently undergoing a restructure that will result in a standalone Coast brand, a merger of Warehouse and Oasis and the Aurora parent name becoming discontinued, have been working with eCommerce and supply chain technology provider Metapack to develop a profit protection system that identifies delivery process irregularities.

Such a move will help generate data and evidence that can be used in the reporting of crime, which Haynes says is so crucial in ensuring the police actually investigate a crime.

"If you present the right case and evidence you will get things dealt with but if you want police to investigate one parcel job, they aren't going to it," he said.

"It's a matter of how much digging you do yourself at the start, otherwise it just gets filed, where it is likely that it'll be matched up with another crime later down the line. Cases are judged on potential investigation opportunity."

Delegates at next week's BRC event, which will take place at America Square Conference Centre near London's Tower Hill, will have an opportunity to hear what progress has been made in terms of the relationship between retailers, the police and the National Crime Agency.

Georgina Barnard, TP crime reduction & partnerships at Metropolitan Police Service, and City Of London Police commissioner Adrian Leppard will join security bosses from Sainsbury's, Harrods, Tesco, Blakemore Retail and others, in discussing all the latest challenges and developments in tackling retail crime.

For Haynes and Aurora, there is a hope that the shift to omnichannel retailing will also aid the business in the fight against theft and fraud.

Aurora has been seen as an innovator in terms of its customer fulfilment and supply chain operations, thanks to the introduction of complex systems linking online inventory to store stock, which it says has improved availability and delivery services.

These systems give the business a more transparent view of customer orders and overall sales, and can seemingly be used by the security team to monitor any potential criminal activity.

"We didn't have the data mining systems all linked together until recently, and now we can see orders matched up when they get refunded – and that gives us a chance to deal with potential fraud," explained Haynes.

"In terms of stock loss, we continue to drive down losses in stores – and we've done that well over the last few years. A lot of companies are – and that shows why collaboration is key."

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