Price too good to be true? Then indeed it is...

StevenSimske — Sat, 28 Feb 2009 15:28:00 GMT

I have spent the last two days at the Brand Protection conference here at the Graphics of the Americas (http://www.graphicsoftheamericas.com/conferences/bpc.html). With the world's economy in a tailspin, there have been numerous discussions of how unemployed but creative people can find ways to augment their diminishing incomes. Sure, counterfeiting is one we focus on here, along with product diversion, smuggling, package reuse and warrantee fraud. Often forgotten in the mix is the creative thief in your retail store's front lines--the sticky fingers in the cash drawer.

One scenario is when the rogue at the register brings a few extra coupons to work, and every time the associated item is sold--voila!, magically, the customer has the right coupon for a reduced rate. Security printing--the use of microtext, void pantographs, and other copy prevention/copy voiding methods will help you tell which teller is tolling the till.

Your tellers, quite likely, are the most honest folks in your store--or in your "web presence". Retail crime, not surprisingly, is on the rise. A recent Yahoo article gives an overview:

http://news.yahoo.com/s/nm/20090225/us_nm/us_usa_retail_crime

"Consumer demand for hot new products at huge discounts is fueling organized retail crime, with goods stolen from retailers finding an audience in secondary markets like the web, a retail trade group said. High on the list are the latest video games or trendiest new handbags that can be easily resold. The demand for product at a reduced price is significantly up. Consumers are looking at alternative resources to find products. Unfortunately consumers and the economy are fueling a drive for this illegal or anonymous commerce that is taking place across the country. Black markets for stolen goods can be deceptively bright: flea markets, swap meets and corner markets teeming with bargain hunters, as well as online auction sites like eBay Inc and classified sites like Craigslist.com, accoring to one expert."

As you might expect, there will be legislation to fight this. "Three federal anti-retail crime bills are expected to be introduced this week in Congress, designed to give law enforcement more authority to fight organized retail theft, including online." And EBay contends that they have "been working cooperatively with other companies and law enforcement in order to fight the online sale of stolen goods." EBay called "discriminatory the legislation soon to be introduced in Congress. These bills are less about fighting shoplifting and more about big box retailers wanting to crush legitimate small-business online competition that delivers real value and greater choice to consumers."

The article continues:

Craigslist called misuse of its site for illegal purposes "absolutely unacceptable" and cited its work with law enforcement to combat it. Criminals are unwise to use craigslist, since they create an electronic trail to themselves that police can follow," said Chief Executive Jim Buckmaster in a statement...An estimated nearly 40 percent of goods sold on auction websites advertised as "new in box" were stolen or fraudulently obtained.

The FBI, in fact, estimates that "U.S. retailers lose $15 billion to $30 billion each year from organized retail crime. To combat the escalating crime, retailers have been using global positioning systems (GPS) to track cartons and suspect vehicles. They are also hiring staff from law enforcement, sharing intelligence information and putting their investigators through specialized training, the NRF said. But lower staffing levels at stores trying to cut costs are leaving a door open to some criminals."

In other words, the Yahoo article portrays a situation in which every sale or potential sale is a battle between the legitimate producer and multiple sources of fraud--from theft in-store or in-transit. It doesn't have to be this way. And, in the case of foodstuffs, pharmaceuticals, airplane parts, automobile parts, and many other products where "sticking it to the man" could end up creating another victim, it simply shouldn't be. Trying to roll back the clock is a self-defeating approach. Products will be sold in brick-and-mortar and on-line. Qualify your on-line sales, and let customers have access to the product-unique and brand-registered variability on that unique product before and after the sale. It will allow you to find the fraud faster.

Benny Landa famously said "everything that can be digital, will be digital, including printing." More germane to this discussion, everything that can be variable, will be variable, and every variation that can be interrogated, will be interrogated. Make that variability count. It's one way to catch a thief--in-store or on-line.

Cheers,

Steve

ePedigree Delay a Sign of An Eventual Supply Chain U.N.?

StevenSimske — Thu, 20 Nov 2008 05:49:00 GMT

I have been remiss in discussing the delay in the California ePedigree until 2015. This has been interpreted as a long-term delay for track and trace and overall product safety. For a nice overview and analysis of the problem, see http://www.industryweek.com/ReadArticle.aspx?ArticleID=17793.

However, ePedigree initiatives are underway by the WHO, FDA, EU, AQSIQ (China), GS1 and other standards/regulatory organizations. A full serialization+pedigree requirement may be delayed until 2015, but it is unlikely that ePedigree will not already be in place before then. Recent passing of PRO-IP and Country-of-origin labeling (COOL) legislation in the US indicates that the US,too, will continue with initiatives before 2015.

The delay of California ePedigree legislation, moreover, may be indicative of another passing of the torch. Much as the recent Presidential (and Congressional) election results likely signal a more collaborative, less "independent" US foreign policy, the delay in ePedigree may signal a more collaborative, less independent nation-to-nation legislation in the future.

Will the big players--WHO, FDA, EU, AQSIQ, GS1, ISO, and others--work together to create a reasonable roadmap for product track and trace, pedigree and provenance? In effect, create a "United Nations" for track and trace? I, for one, hope so. With the increasingly convoluted supply chains for virtually all products resulting in chaos during recall, fraud and even normal node-node shipping situations (how many retailers can confidently tell you everywhere a product has been on its way to their shelves?), how long can it be before the legitimate market says, "enough is enough"? Plus, a universal process will reduce confusion, lower cost, and improve response time around the planet.

Is the current combination of counterfeiting, diversion, factory overrun, smuggling, return fraud and other supply chain crime the commerce equivalent of the two World Wars? A series of events so drastic that the set of collective players decides to band together into a United Nations to try to prevent such a meltdown in the future? (I realize the United Nations is by no means perfect--but we have been without nuclear combat for 63 years...). Maybe so. And maybe the delay in the California ePedigree shows that the US, rather than defining the path forward, is willing to work with the rest of the Supply Chain United Nations in formulating the optimum set of requirements moving forward.

-Steve

Security Printing and Imaging : fraud

Price too good to be true? Then indeed it is...

ePedigree Delay a Sign of An Eventual Supply Chain U.N.?