Loss Prevention

Loss Prevention is not all about floor walking—most Loss Prevention departments
are much more than that and are depended upon for education, guidance, investi-
gations, interviews, helping to reduce shrinkage, always with integrity and trust.

From: Women in the Security Profession, 2017

Related terms:

Risk, Law Enforcement, Police Officer

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Industry Specific Q&A

Jennifer DiCarlo CFI, in Women in the Security Profession, 2017

1 Brief Summary/Introduction of the Specialty Field or Sector.

Retail Loss Prevention is comprised of investigating losses, educating store staff,
and operations on risks due to theft, fraud, harassment, and learning how to protect
companies against cybercrime. In most retail establishments, physical security, such
as locks, keys theft deterrents, CCTV, and reporting, is managed by Loss Prevention
(LP). LP helps retail stores manage and minimize loss, along with working alongside
Human Resources to maintain integrity and accountability for those who work with-
in the stores, warehouses, and offices. Depending on the size of the organization,
Loss Prevention departments can have as few as two people or as many as hundreds.
Loss Prevention is not all about floor walking—most Loss Prevention departments
are much more than that and are depended upon for education, guidance, investi-
gations, interviews, helping to reduce shrinkage, always with integrity and trust.

> Read full chapter

Focusing on water and steam: the

ever-present and sometimes evil twins
Roy E. Sanders, in Chemical Process Safety (Fourth Edition), 2015

Chlorine cylinders
Loss prevention engineers and safety professionals have repeated stories in
Louisiana about the misapplication of steam on one-ton chlorine cylinders. Two
similar stories were discussed at inter-plant loss prevention meetings a couple of
decades ago. Naturally, the details are now a little vague but the stories were from
companies located over 100 miles apart in two separate petrochemical sections of
the state.

Process engineers who have requirements for low flow rates of chlorine can purchase
chlorine in 150 pound and one-ton cylinders. These containers are very robust and
industries have safely used them for decades. The one-ton cylinders are 2½ ft. (0.75
m) in diameter and just under 7 ft. (2.1 m) long with extended cylinder walls to
protect the valves. Chlorine ton-cylinders are hydro-tested at 500 psig (3450 kPa
gauge).

Chlorine can be provided from the ton cylinders as a liquid or a gas. The discharge
rate depends on the pressure within the cylinder and this is a function of the
ambient temperature. In order to withdraw gas, you must vaporize liquid chlorine.
Withdrawal tends to reduce the temperature and hence the vapor pressure and the
surrounding air must supply sufficient heat to boost the vapor pressure. Typical
maximum discharge rate for a one-ton chlorine cylinder in a 70°F environment is
about 15 lb/h.

When chlorine gas is withdrawn from a chlorine cylinder at a rapid rate, the cylinder
will cool down. Some companies that need to boost the gaseous chlorine flow rate
have placed warm water spray or utility water on the cylinder to add a well-controlled
heat input on cool days. However, some individuals were reported to have become
more creative and blew live steam via a hose to even further increase the rate of
vaporization. That would seem like a good idea – unless you took the time to read
the precautions.

Each chlorine ton cylinder has three fusible plugs on each end of the tank to protect
it from overtemperature. These plugs are designed to melt between 158°F and 165°F
(70–74°C). They are designed to protect the tank from overpressure if the cylinder
is accidentally exposed to fire or other sources of excessive heat. In fact, if you
accidentally heat steel containing chlorine to over 483°F (250°C), a steel-in-chlorine
fire can be ignited.

The protection philosophy seems to be to protect the cylinder from overpressure by

protecting it from overtemperature that would vaporize the liquid chlorine. Each of
the fusible plugs is in a 3/4 in. threaded plug. If the fuse melts, the resulting hole is
about 11/32 in. in diameter.

Stories from plant safety professionals indicate that live steam was exhausted on the
cylinders to make a crude vaporizer to increase chlorine flow. The frightful result
was more chlorine, but it was to the atmosphere, not to the process. There were no
reports of injuries when these memorable stories were told.

> Read full chapter

External Threats and Countermeasures

Philip P. Purpura, in Security and Loss Prevention (Sixth Edition), 2013

External loss prevention focuses on threats from outside an organization. This

chapter concentrates on countermeasures to impede unauthorized access from out-
siders. If unauthorized access is successful, numerous losses are possible from such
crimes as assault, burglary, robbery, vandalism, arson, and espionage. Naturally,
employees as well as outsiders or a conspiracy of both may commit these offenses.
Furthermore, outsiders can gain legitimate access if they are customers, repair
technicians, and so on.

Keywords

external loss prevention, forced entry, smash and grab attacks, surreptitious entry,
aura of security, redundant security, layered security, environmental security design,
“Broken Windows” theory, sustainability, green security, perimeter, clear zones,
natural barriers, structural barriers, human barriers, animal barrier, energy barri-
ers,passive vehicle barriers, active vehicle barriers, common wall, land use controls,
target-rich environment, keep out zones, stand-off distance, blast and antiramming
walls, fiber optics, bypass, spoofing, point protection, spot or object protection, area
protection, perimeter protection, local alarm, central station, remote programming,
lumens, illuminance, foot-candle (FC), lux, color rendition, traffic calming strategies,
stationary post, foot or vehicle patrols, contraband

> Read full chapter

The History of Security and Loss Pre-

vention
Philip P. Purpura, in Security and Loss Prevention (Seventh Edition), 2019
Abstract
Security and loss prevention practitioners face enormous challenges. Dealing with
crimes, accidents, and natural disasters requires sound planning and action and
the ability to adapt to a changing environment. Critical thinking offers an avenue
for practitioners to enhance positive results in their work. The techniques of critical
thinking are also helpful to students in any discipline to improve their thinking. We
all think, but when we apply critical thinking, we produce a clearer, more accurate
picture of our world. This chapter traces the history and growth of the private security
industry into the 21st century. The content also explains the challenges security and
loss prevention professionals face in our world today.

> Read full chapter

Risk Management, Business Continu-

ity, and Emergency Management
Philip P. Purpura, in Security and Loss Prevention (Fifth Edition), 2008

Claims for Crime Losses

A loss prevention practitioner or risk manager may be confronted with important
decisions in a claim in an attempt to minimize losses for his or her employer.
Although crime claims are emphasized here, several points are applicable to other
types of claims.

When a person or business takes out an insurance policy to cover valuables, the
insurance agent may not require proof that the valuables exist. However, when a
claim is filed, the insurer becomes very interested in not only evidence to prove that
the valuables were stolen (e.g., police report), but also evidence that the valuables in
fact existed. Without proof, indemnification may become difficult. To avoid this
problem, several steps are useful. First, the insured should prepare an inventory of
all valuables. Accounting records and receipts are good sources for the inventory list.
The list should include the item name, serial number, date it was purchased, price,
and a receipt. Photographs and video of valuables are also useful. Copies should be
located in two separate safe places.

Bonding Claims
Numerous insurance companies have found the fidelity bond business to be gen-
erally unprofitable. To compound the situation, businesspeople have attempted to
used fidelity bond claims to cover losses from mysterious disappearance and general
inventory shortages, rather than for their intended purpose—coverage for internal
theft. For these reasons, when a claim takes place, the insurer and insured have a
tendency to enter negotiations as adversaries. The strength of the loss prevention
practitioner's case will definitely affect the settlement. Care must be exercised
throughout the interaction with the insurer so as not to in any way invalidate the
contract. Furthermore, the burden of proof for losses rests entirely on the insured.

Before 1970, the insurer investigated applicants and notified the insured of any
criminal history of the applicant that would bar coverage. Because of economy
measures and the difficulty of checking into a person's background, many insurers
have made a shift to the insured for verifying the applicant's past. Bonds stipulate
that past dishonesty by the employee justifies an exclusion from bonding from the
day the information is discovered; if a loss occurs and the insurer can prove that this
information was known to the insured company but not reported to the insurer, the
bond is likely to be invalid.

Another way to invalidate a bond is through restitution by the employee to the

employer without notifying the insurer. In many cases, the employee is eager to pay
back what was stolen but makes only a few payments before absconding. Thereafter,
if a claim is made, the bond is useless.

In reference to the burden of proof, the loss prevention practitioner should have
considerable expertise when dealing with the insurer on behalf of his or her employ-
er. Confusion often arises from the “exclusionary clause” of the fidelity bond policy.
This clause essentially states that the bond does not cover losses that are dependent
on proof from inventory records or a profit and loss computation. Prior to 1970,
these records were not even allowed to establish the extent of losses even though
employees had confessed. However, in the early 1970s, courts began to be more
flexible in limiting the exclusionary clause and thus allowing inventory records and
associated computations to establish the amount of loss when independent proof
also was introduced to establish that there was loss due to employee theft.

A confession is of prime importance to bonding claims. A guilty verdict in a criminal

court or a favorable labor arbitration ruling are additional assets for the claimant.

What do you think are the most difficult challenges of a risk manager's job?

> Read full chapter

External Threats and Countermeasures

Philip P. Purpura, in Security and Loss Prevention (Seventh Edition), 2019
Introduction
External loss prevention focuses on threats from outside of an organization. This
chapter concentrates on countermeasures to impede unauthorized access from
outsiders. If unauthorized access is successful, numerous losses are possible from
crimes such as murder, terrorism, sexual assault, robbery, assault, arson, burglary,
larceny, vandalism, and espionage. Naturally, employees as well as outsiders or a
conspiracy of both may commit these offenses. Furthermore, outsiders can gain
legitimate access if they are customers, contractors, and so on.

Internal and external countermeasures play an interdependent role in minimizing losses; a

clear-cut division between internal and external countermeasures is not possible because
of this intertwined relationship. In addition, as explained in the preceding chapter, we
are in an era of universal threats. This means that because of telework, employees
and organizations face the same threats whether work is accomplished on or off the
premises.

The cybersecurity perspective is important to produce comprehensive security. Cyber-

security specialists use terms such as denial of access, intrusion detection, and
penetration testing as do physical security specialists. As cybersecurity and physical
security specialists learn from each other, a host of protection methods will improve.
Examples include integration of systems, investigations, and business continuity
planning. Cybercrime and cyberattacks are covered in later chapters.

Many organizations have developed formidable perimeter security to prevent unau-

thorized entry, although not realizing that the greatest threat is from within.

> Read full chapter

The History of Security and Loss Pre-

vention
Philip P. Purpura, in Security and Loss Prevention (Sixth Edition), 2013

Security and loss prevention practitioners face enormous challenges. Dealing with
crimes, accidents, and natural disasters requires sound planning and action and
the ability to adapt to a changing environment. Critical thinking offers an avenue
for practitioners to enhance positive results in their work. The techniques of critical
thinking are also helpful to students in any discipline to improve their thinking. We
all think, but when we apply critical thinking, we produce a clearer, more accurate
picture of our world.

Keywords
critical thinking, security, loss prevention, Chief Security Officer (CSO), layered
security, redundant security, circumvent, Great Wall of China, Hammurabi, King
of Babylon, polis, Praetorian Guard, vigiles, feudalism, comitatus, posse comitatus,
Posse Comitatus Act, frankpledge system, tithing, Magna Carta, Statute of West-
minster, watch and ward, Henry Fielding, Bow Street Runners, Sir Robert Peel,
Metropolitan Police Act, Allan Pinkerton, Henry Wells, William Fargo, William Burns,
Washington Perry Brink, George Wackenhut, Edwin Holmes, first wave societies,
second wave societies, third wave societies, convergence of enterprise security

> Read full chapter

Protecting Commercial and Institu-

tional Critical Infrastructure
Philip P. Purpura, in Security and Loss Prevention (Sixth Edition), 2013

Human Resources Problems in Retailing

Because retail loss prevention is highly dependent on the efforts of all employees,
it is important to discuss the realities of human resources problems in retailing.
This includes many part-time and/or temporary employees, inexperienced workers,
training challenges, employees dissatisfied with working conditions (e.g., low wages
and long hours), and high turnover. Research by Hollinger (2011: 26) found the fol-
lowing: “When we looked at the most likely causes of inventory shrinkage, both sales
associate turnover and heavy reliance on a part-time workforce are again the two
most obvious correlates.” Loss can become a by-product of each of these personnel
factors. For instance, some part-time employees may be working during holiday
seasons to make extra money and may steal to support gift expenses. A high rate of
turnover creates additional training expenses and many inexperienced employees.
These problems, coupled with poor performance, are especially troublesome to
retailers because such employees are in direct contact with customers and this can
have a negative impact on sales and customer loyalty.

Remedies for the above challenges include cost-effective screening, adequate social-
ization, auditing, and investigations. Another possible measure would be to assign
part-time and temporary employees to be supervised by and work with permanent,
experienced employees. Additionally, inexperienced employees could be barred from
performing certain tasks and entering specific areas. Besides potential losses from
part-time and temporary employees, loss prevention planning must also consider
full-time regular employees.
 Screening
The quality of job applicant screening is dependent on numerous factors. In a small
store, the owner may interview the applicant; record pertinent information, such as
address, telephone number, and social security number; and ask for a few references.
In large multistore organizations, however, employment procedures are commonly
more structured and controlled. Cambern (2010: 71) writes of vulnerabilities from
retail employees obtained from staffing agencies. She writes that adverse results
(e.g., criminal convictions) from background checks are higher for contract workers
that for other employees. In addition, she notes that the most common alert is
a bogus social security number, which signals false identity. Hollinger (2011: 26)
reports that the “hottest” screening methods are criminal history checks, followed
by honesty testing and computer-assisted interviews.

Socialization
Various training programs are applicable to adequately socialize an employee toward
business objectives. Training can reduce employee mistakes and losses, raise pro-
ductivity, create customer satisfaction, and reduce turnover.

Some retail businesses require employees to sign a statement that they understand
the loss prevention program. This procedure reinforces loss prevention program-
ming. Furthermore, as models of appropriate work attitudes and behavior, execu-
tives should set a good example and practice what is preached.

Numerous loss prevention awareness programs are applied by retailers. These in-
clude anonymous telephone hot lines, online reporting, discussions about shrink-
age, bulletin board notices and posters, employee code of conduct, honesty incen-
tives, and a variety of online and video training programs.

> Read full chapter

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