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Avoiding the holiday hustle

Avoiding the holiday hustle

By Greg Bangs , Global Head of Crime and Head of US Crisis Management

It’s that time of year when we all need to brace ourselves for not only the bustle of the holiday season, but for the potential hustle in the bustle too. 

Crime rates have a tendency to spike between Thanksgiving and New Years as thieves target shoppers, retailers and so many other businesses and holiday revelers. This time of year presents the greatest risk of potentially falling prey to employee crimes like sweethearting, vendor fraud scams and social engineering cons that can deflate year-end sales numbers, erode trust and overall security for a business. Companies need to know how these crimes play out and what they can do to mitigate risk.

Sweethearting, for one, is the biggest threat to retailers, accounting for $60B in losses in the US. If a cashier rings up deep discounts for a friend, relative or someone who bribes them; pretends to ring up an item; or returns an item that was never purchased, this exposes the retailer to serious financial risk.

While advanced Artificial Intelligence solutions may be too expensive for most retail outlets, there are quality, cost effective software packages businesses can put in place to pick up anomalies or patterns of higher than usual return rates or discount percentages, and help managers take steps to investigate a potential fraud.

Online retailer fulfillment centers are susceptible, too. While the mega online entities have state of the art inventory systems and security; smaller scale operations can experience theft by seasonal workers who may find it easy to sneak something out in their backpack on their way home, or toss something over a fence when going outside for some fresh air on their break. 


" Cost effective software packages businesses can put in place to pick up anomalies ... and help managers take steps to investigate a potential fraud."


What else can businesses do to avoid a holiday hustle?

  • Conduct preliminary screening on all new hires. At the very least, conduct credit and criminal background checks on new seasonal and full time workers. Though limited, these pick up enough information to weed out potential issues.
  • Educate managers on how to put some basic controls in place. Video surveillance at point of sale terminals, stock rooms and fulfillment warehouses limits sweethearting and pilfering, especially if employees have been informed during orientation that everyone is under video surveillance. Also during onboarding, be clear on what the ramifications are for stealing.
  • Watch the shop! Sometimes fraud flies right under the NORAD radar because it is rooted within the ranks of management.
  • Beware the ghosts of retail past and present. It’s not unheard of that a manager may put a ghost employee on the payroll when hiring up for the season, complete with direct deposit pay going into a bank account near and dear to their wallet.
  • Don’t let vendor-related fraud take you for a sleigh ride. Small to multimillion dollar deals made between mid-to-senior level executives colluding with third party vendors to pad and then skim a little off the per unit price of widgets and split the profits are not uncommon. It accounts for about 40% of the crime losses seen in the market.
  • Is that you, Santa Claus? Not to be left out of the seasonal fake out festivities are requests from naughty elves impersonating the IRS or imposters cashing in on a company’s desire to demonstrate their commitment to corporate social responsibility. Not only do their emails look spot on, they follow up with a live action phone call from a scammer that says all the right things and gets targets to respond.

While it may be impossible to completely eliminate the risks of employee theft, vendor-related fraud and scam artists, there are ways to insure against them.

The employee theft insuring clause in crime policies typically covers sweethearting scams and theft by employees, regardless of whether they are permanent, temporary or seasonal. If they’re stealing from you by giving discounts, giving away merchandise without charging for it, or engaging in vendor related fraud, you’re covered too.   While a standard crime policy does not cover social engineering, some carriers now offer the protection as an endorsement.   

Business may not be as usual during the holidays, but that’s no reason for anyone to lose revenue or their holiday spirit!


Greg Bangs is Senior Vice President, Crime Regional Leader in North America for AXA XL.  He can be reached at





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