Monday Jan 04, 2016

4 Essential Considerations for Hassle-free, Low-risk Returns

According to NRF, retailers estimate holiday return fraud will cost $2.2 billion in 2015. Combine this number with the rise in online shopping this holiday season, of which 80% includes free return shipping, and you’ve got some significant revenue loss potential.


About $62 billion in goods bought between November and December 2015 will be returned, up 8% from the same period last year, with about a third of those items (more than $20 billion worth) purchased online, according to Customer Growth Partners.


A pain-free returns process is a vital part of the customer service experience and denying legitimate returns presents significant risk to customer loyalty. A well defined and managed returns process will enhance the customer experience while protecting the business from theft.


We asked Michael Colpitts, Solution Market Director, Stores & Commerce, Oracle Retail, to share his tips on how to achieve the right balance between fraud prevention and excellent customer service.


4 Essential Considerations for Hassle-free, Low-risk Returns


1. Plan for Unreceipted Returns

It is estimated that more than 13.4 percent of nonreceipted returns are fraudulent; unfortunately, you can't just deny all nonreceipted returns. Studies show that a customer's experience of returning merchandise is a key decision point in building loyalty and many of them expect to be able to return when and where they wish. So on one hand, you have to factor fraud cutting into the bottom line, and on the other hand you have to consider how a poor customer experience diminishes loyalty. Managing exceptions from your POS data allows loss prevention professionals to quickly flag recurring issues like unreceipted returns so that field investigators can prioritize investigations.


2. Leverage Automation to Ensure Compliance

It’s fine to write a policy statement and distribute it throughout your stores, but actually achieving compliance is another matter. That’s where automation becomes really important. You want a system in place that offers associates the right guidance during the execution of returns so that policy is adhered to, customer experience is consistent at every location, every time and employee knowledge of policies becomes widespread.


3. A Single View of the Customer is Critical

If your in-store POS and online sales data is siloed you are inevitably going to miss patterns. This is key because a customer’s return history is invaluable in determining the likelihood of fraud. Just as important, leveraging a central repository for all customer transactions enables you to convert a nonreceipted return into a receipted return by looking up the original transaction at the POS.


4. Look for Flexibility, Scale and Seamless Integrations

When selecting a technology solution always consider what the business will look like in 5, 10, 15 years and consider integration requirements with other solutions (both cloud and on-premises). The Oracle Retail Returns Management solution gives retailers the ability to create flexible returns policies that are fully integrated with the broader Oracle Retail Stores and Commerce solutions ensuring a consistent data set. Even the most complex policies are easy to create and manage with 40 built-in rules that evaluate the return. These rules incorporate all available criteria to determine how the return should be handled including presence of a receipt, customer return history, store location, item or brand being returned, condition of the item—and much more.


The Risk of Doing Nothing

As loss prevention technology adoption accelerates criminals strategically look for retailers that have manual processes and loop holes. For those who do not act, losses will inevitably accelerate. We’re helping retailers strike the right balance of risk mitigation and hassle free shopping experiences. Learn more at oracle.com/retail or drop us an email: oneretailvoice_ww@oracle.com.


For more information on retail fraud statistics and trends read NRF’s 2015 Consumer Returns in the Retail Industry report.




Tuesday Jun 23, 2015

Perspective from NRF Protect 2015: Adidas Uses Oracle Retail XBRi to Reduce Fraud at the Point of Service

Analytics and exception-based reporting, made available across all stores brings Big Data-style science to loss prevention

In advance of NRF Protect, here is a look at what some of our customers are doing to reduce and respond to fraud in stores. This is the first in a two-part series. To learn more, be sure to visit us at the Oracle Retail Booth #1227 at #NRFProtect this week in Long Beach, CA. 

Retail loss prevention professionals are well aware that employee theft and employee-related fraud account for the biggest single segment of shrink. According to the November 2014 Global Retail Theft Barometer, employee-generated shrink accounted for just over 40% of the previous year’s $128 billion total, even more than the one-third generated by shoplifting and organized retail crime.

Given these facts, retailers have a compelling interest in understanding and curtailing employee-generated shrink. The conundrum, however, is that no retailer can effectively investigate every single transaction in every single store. Fortunately, employees who commit fraud tend to follow specific patterns. By using tools that apply science to the problem, retailers can shift this challenge from a Big Data problem to an opportunity for insight.

One of the most important loss prevention tools is exception-based reporting, using advanced algorithms to constantly monitor point-of-service (POS) activity, identify potentially fraudulent transactions, and alert specialists automatically. Trends, outliers and “red flags” can be measured and tracked by region, store, or individual employee. By providing essential data to multiple levels of staff – from individual loss prevention specialists in the field to regional managers – an organization can effectively empower their team to root out fraud, and act quickly to resolve it. Doing the same thing manually is impossible when transactions multiply over dozens or thousands of locations. 

For adidas, the global designer and manufacturer of athletic shoes, clothing and accessories, it was nearly impossible to consistently identify the causes of shrink and fraud in its 2,470 stores worldwide. The company was unable to perform loss prevention exception reporting and faced operational challenges including lack of data protection, multi-system misalignment, difficulty adjusting to time zone and language variances, and system failures resulting in non-compliance issues.  In a recent Chain Store Age article, adidas shares how it reduces fraud in employee and administration losses following its implementation of Oracle solutions. Adidas shared their experience at Oracle Industry Connect. You can download the presentation adidas: Measuring and Managing Loss to Preserve Profit from the Oracle Retail RACK. 

Now available as a cloud service, Oracle Retail XBRi Loss Prevention Cloud Service captures all POS transactions and then administers advanced business analytics that apply a laser-focused look at key loss patterns. Designed to be completely agnostic to the POS solution and source data, XBRi integrates with both Oracle and third-party POS solutions – even multiple solutions – giving retailers flexibility and freedom of choice. The cloud service shifts funding from a potential capital investment in software and IT infrastructure to an operational expense. 

To learn more, be sure to visit us at the Oracle Retail Booth #1227 at #NRFProtect this week in Long Beach, CA. 


Friday Jan 30, 2015

A New Kind of Credit Card Fraud

Fraud analysts at credit card issuers (banks) pour though transactions looking for credit card fraud. Patterns in this data are what usually lead investigators to find breaches. Find a bunch of transactions involving stolen numbers, then work backwards to find the commonality and you've got your breach. But there are lots of additional patterns in that data as well.

Two enterprising fraud analysts at Capital One decided to look at purchase patterns for public retailers, then use that information to place bets in the stock market. Why not, right? All of Capital One's credit card transactions are sitting in the database for them query. As you can see in the heavily redacted SQL query below, it took some serious analytical skills.

For example, they compared this quarter's volume of Chipotle transactions to last quarter's and seeing that sales were strong decided to buy call options just before the earnings announcement. Earnings were good so the stock went up, and their $100,000 investment netted $270,000 in profits -- for basically three days work.

Over three years, they made around $2.8M which worked out to about a 1819% return on their investment. Of course this is considered insider trading and they were eventually arrested. So the guys that were looking for credit card fraud were actually committing a different kind of fraud. There's gold to be mined in that data. See the complete story over at Bloomberg View.

Tuesday Jul 06, 2010

Legendary Returns

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