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Mobile scanning, payment 'could' lead to increased stock loss

21 February, 2014

A report released today by Efficient Consumer Response Australasia (ECRA) highlights the significant security challenges for the retail industry stemming from smartphone technology.

The commissioned research conducted by the Australian National University (ANU) has examined how the transition to mobile scanning and payment increases the risk of significant impact on levels of stock losses otherwise known as shrinkage. Experts from the University of Technology Sydney's Designing Out Crime research centre and from the Australasian retail industry have worked with Dr Taylor to provide insight into this rapidly emerging area of retail development.

John Cawley, the study's commissioner at ECRA, said the report, Staying Ahead of the Game – Mobile payment technologies: retail benefits and risks, underscores the critical importance of building effective security and resilience into new retail systems to minimise theft, and accidental removal of goods from outlets".

Dr Emmeline Taylor, Senior Lecturer and Convenor of undergraduate Criminology at the ANU, noted that, "The introduction of any new technology, service or process will generate a range of risks, vulnerabilities, security issues and training needs. Recognising the significant potential for loss, mobile payment processes must be safe and secure from the outset.

"We saw this with the introduction of self-checkout in Australian retail. It is not entirely clear whether there has been a significant increase in the actual amount of loss, but we do know that self-checkout has increased the number of ways retailers suffer losses.

"We can expect similar hiccups with the introduction of new mobile scanning and mobile payment systems, as they potentially create a new set of shrinkage problems."

 "Shrinkage costs the Australian retail industry over $2 billion dollars annually. Shoplifting is estimated to be the main cause with a 45 per cent value share in 2012, followed by employee theft (27 per cent) and admin/non crime losses (21 per cent). New processes and practices including fraudulent activity, theft and security breaches not only impact the bottom line but can have devastating impacts on customer confidence."

"There is no room for trial and error as characterised the introduction of self-service checkout; the risks are too high.

"In order to limit shrinkage, protect their profits and provide optimum service to their customers, retailers will need to pre-empt these issues and ensure that any potential security risks are anticipated and safety measures are put in place," concluded Dr Taylor.

Source: Australian Food and Grocery Council

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