How To Spot a Thief Utilizing FreeStyle Analytics Randy Fernandes, Business Analytics Solutions Consultant Industry Experts share their tips & tricks for finding cases of internal theft using "FreeStyle" analytic methods. Introductions • Randy Fernandes, Business Analyst Solutions Consultant, MICROS • Kimberly Bloomston, VP – Operations, The Zellman Group Follow along #mconnect14 3 © 2011 MICROS-Retail micros-retail.com/connect Agenda • Freestyle Analytics overview – What is “Freestyle Analytics”? • Case Study – How The Zellman Group uses Freestyle Analytics • Future Tense - XBR Ingenium Follow along #mconnect14 4 © 2011 MICROS-Retail micros-retail.com/connect What is “Freestyle Analytics”? • Investigating via ad hoc methodology  Targeted Header or Detail report   Summary Level Reports    i.e. “Discount Summary” link to “Transaction Header”, sorted by transaction time… Linking to targeted reports from a Control Group    i.e. “Discounts Greater than 50%” i.e. “High Risk Cashiers” link to “Modified Sales Less Than Transactions” Drilling down from Dashboards, KPI Summaries, etc. Follow along #mconnect14 5 © 2011 MICROS-Retail micros-retail.com/connect How the Zellman Group uses Freestyle Analytics Follow along #mconnect14 6 © 2011 MICROS-Retail micros-retail.com/connect The Zellman Group Set-up • Analytics team includes 12 team members:     Lead/Mentor XBR Administrator Loss Prevention Analysts – 300+ hours Operations/IT Support • Client Breakdown   Utilizing 8+ instances of XBR Food Service & Retail Follow along #mconnect14 7 © 2011 MICROS-Retail micros-retail.com/connect Week in the Life • XBR Administrator    Updates queries, controls Recommends alerts to analysts Identifies areas of opportunity by analyst • Loss Prevention Analyst      Client Assignment Weekly Reports Alerts Control Points Freestyle Analytics Follow along #mconnect14 8 © 2011 MICROS-Retail micros-retail.com/connect Freestyle Approach • High Conversion Opportunities    Similar concepts Same Industry Different Industry • KPI Analysis  Locations with a disproportionate % to sales in voids, discounts, etc.   Drill Down to Cashier Link to appropriate adhocs • Adhoc Research Follow along #mconnect14 9 © 2011 MICROS-Retail micros-retail.com/connect Line Void Fraud – Case Study 1 Line voids are legitimately performed to take items off of a sale. Employees can line void an item and keep the money paid by the customer, typically leaving the low price point items on the receipt in an effort to gain access to the till. Employees can also line void off a(n) item(s) and pass them off to friends or family. An ALL Void is when each item in the sale is voided off leaving a $0 balance. Again, these can be done to pass off items to friends or family or keep the funds, especially when an individual pays exact change. Follow along #mconnect14 10 © 2011 MICROS-Retail micros-retail.com/connect Line Void Fraud – Case Study 1 • Bottom 10% of Locations as % of Cash Sales (Company Average 60.70%) • Lowest in District as % of Cash Sales • Cashier 600483 2nd highest in sales but lowest ADS & UPT Follow along #mconnect14 11 © 2011 MICROS-Retail micros-retail.com/connect Line Void Fraud – Case Study 1 • Highest Line Void Activity in the store • Gradual increase week-by-week Store 7.07% 6.51% 6.77% 6.24% 8.46% 9.51% Assoc. 600483 7.48% 7.52% 7.22% 6.61% 10.53% 12.42% Follow along #mconnect14 Rank 4 2 3 5 2 1 Total Count 51 69 46 52 71 92 Questionable Count 9 6 9 13 32 32 12 Questionable Dollars $77.94 $62.89 $126.90 $92.45 $301.36 $225.22 © 2011 MICROS-Retail micros-retail.com/connect Line Void Fraud – Case Study 1 • Void Review  Location flags in the bottom 25% of locations   Line Void % Line Void Count • Associate Void Review  Associate does not flag in the top 10% of associates   Line Void % Line Void Count Follow along #mconnect14 13 © 2011 MICROS-Retail micros-retail.com/connect Line Void Fraud – Case Study 1 • Investigation conducted including the following:  Review of CCTV identified individual was free bagging merchandise. • Telephone interview conducted with employee in question:  Admission: $900.00 Follow along #mconnect14 14 © 2011 MICROS-Retail micros-retail.com/connect Employee Processing Own Sales – Case Study 2 Employee discounts can be manipulated in several ways. Employees will often process their own sale. This allows for the employee to ring in a few items and bag additional items as there are no checks and balances used in the sale. Employee refunds can be manipulated to either refund items at a higher price or if processed by the employee, the items may not even return to the store. • Dishonest Employees can be tricky    Do set alerts when Employee # = Cashier # Potentially restrict at POS Create adhocs to save you from employees hiding!   Use a different Employee # Do not ring as Employee Sale Follow along #mconnect14 15 © 2011 MICROS-Retail micros-retail.com/connect Employee Processing Own Sales – Case Study 2 • Count of Distinct Employee Number per Tender (Credit Card) • Link to Credit Card Activity Follow along #mconnect14 16 © 2011 MICROS-Retail micros-retail.com/connect Employee Processing Own Sales – Case Study 2 • Employee rang under a different employee number as recipient. Follow along #mconnect14 17 © 2011 MICROS-Retail micros-retail.com/connect Employee Processing Own Sales – Case Study 2 • Employee rang as non-employee sale. Follow along #mconnect14 18 © 2011 MICROS-Retail micros-retail.com/connect Employee Processing Own Sales – Case Study 2 • Investigation conducted including the following:   Review of media shows different signatures on transactions rung by Cardholder. Signatures did not appear to be forged indicating potential collusion. • Telephone interview conducted with employee in question:   Admission #1: $750.00 in product Admission #2: $500.00 in product Follow along #mconnect14 19 © 2011 MICROS-Retail micros-retail.com/connect Training Example - Ingenium Follow along #mconnect14 20 © 2011 MICROS-Retail micros-retail.com/connect Follow along #mconnect14 21 © 2011 MICROS-Retail micros-retail.com/connect Thank You!