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In this podcast of our July-August 2012 cover feature, Amber Virgillo asks the controversial question: are retailers feeding the ORC phenomenon? She investigates retailers' buying habits and shows how retailers can avoid buying back their own stolen goods.

Are we doing a disservice to the loss prevention industry by not being on the same page with how to define, categorize, or combat the growing ORC problem? Or at least sincerely examining the role retailers play in perpetuating this problem?

No company quite like American Apparel exists in the United States anymore. It's both cutting edge and an anachronism; a company that defies modern accepted practices. It hearkens back to an earlier era of manufacturing, one that used to flourish here, before it became in vogue to outsource everything and send all production to the Far East somewhere.

Owners, operators, and insurers of businesses, including commercial and residential properties of all types, take little solace in news reports that suggest a decline in the nation's crime rate. The focus of their concern is more likely to be the growing volume of incidents of violent crime, diminished law enforcement assistance, and the related risk of premises security litigation.

Because loss prevention professionals deal in so many areas of expertise and touch so many other parts of the retail organization, we continually look for a wide range of topics to feature in the magazine. You are not single focused or one dimensional, so we try not to be. This issue is a good indication of a wide range of article topics.

Are Retailers to Blame?

The cover story addresses a topic within the ORC discussion that was recently proposed by the loss prevention executive at Harris Teeter, David George. Are retailers exacerbating the ORC problem by purchasing stolen merchandise? We thought that was an interesting question, so we assigned our resident pot stirrer, Amber Virgillo, to address the issue. After you read the article, let us know what you think in the comments section.

Going to the Dark Side

You've all heard that phrase when an LP executive leaves his or her retail role and moves to the other side of the desk as a vendor. Our executive editor, Jim Lee, is one of those people who had a long, stellar career as a retail executive before becoming a solutions provider, consultant, and magazine publisher. Some people who make this change are successful; others are not. Jim talked to several individuals who have successfully navigated the transition to discuss the challenges they faced. The comments these executives offer provide insights into the retailer-vendor relationship that should be enlightening to anyone on either side of the desk. Read their stories here.

Red, White, and Blue Montez

For most of the life of the magazine, we have tried to profile companies who are not always on the tip of everyone's tongue. If you look back over our past issues, you'll see articles on small specialty retailers, wholesale distribution companies, and other niche enterprises. When I visited the Los Angeles Police Department in February, I ran into Blue Montez, one of the nicest, most professional LP executives in our industry. Blue had an interesting story to tell after moving from Sport Chalet to American Apparel eighteen months ago. It's a story with many levels—building an LP team, implementing RFID, working with IT, global retail, and what was once a common retail theme, "made in America."

Premises Security Liability

We often ask for suggestions for article topics. You've likely seen them here, on our website, or on one of our social media pages. We typically ask the LP folks we visit for suggestions as well as the members of our editorial board. One of our board members, Bill Heine of Brinker, sent me an email in January that suggested that as LP gets more and more sophisticated with newer and greater technology, we shouldn't overlook some basic security 101 measures that can impact the company, such as premises security. So we asked a couple of experts in this area to talk about the subject. You can read what they had to say here.

Hopefully, all of these articles will provide some valuable information, in a thought-provoking way that you can use in your situation. As you can see from these articles, we listen to your suggestions and appreciate your input. Please don't hesitate to contact us with your thoughts.

The beginning of every interview or interrogation revolves around the elements of rapport. Rapport between people is a level of comfort or trust that the other person has your best interests at heart. Effectively, "this person cares about me" is our conclusion.

This is difficult enough when cultures don't clash, but when there are strong cross-cultural differences and language problems, the issues can be exacerbated. There is already a significant difference between the dynamics of an interview or interrogation, then add into the mix cultural issues, and the simple becomes complex.

While researchers differ on the exact time it takes for people to make their first judgment about another, they all agree it is not long. Every human being reads another's verbal and physical behavior and then predicts whether they like or trust the other person. It is a combination of demeanor, voice, personal space, interview location, and a host of other things that, when added together, create rapport between people. Once a judgment is made about another person, that conclusion is difficult to change. There is no question a common heritage and language gives one a step up on developing rapport.

Regardless of whether you are interviewing or interrogating, an expression of caring will help bring a connection between the interviewer and subject. However, trying too hard to make a connection will breed distrust into the relationship. We want to care about the other person, but not so much that we appear insincere.

Establishing Rapport

Developing a personal relationship is the key to success regardless of the culture. This can be shown by expressing interest in the other person's comfort and showing a combination of empathy and compassion for the individual's situation. While we face these situations as a regular part of our jobs, we can never forget the person may be frightened, uncertain, and confused, so the interviewer must adjust accordingly to open a dialogue with the individual.

While the interviewer has his own agenda, he must give appropriate respect to his subject. Even simple attempts to establish rapport may trigger resistance since the person is looking through his own lens of reality. Someone who has experienced discrimination may see a slight where none was meant because of his personal history. If a person has English as a second language, his poor speech may be interpreted by the English speaker as unintelligent.

The interviewer's voice is going to send volumes of information to another person. Striving for a calm, steady speech pattern will go a long way to quiet even those who do not understand the language. People will also have a different interpretation of someone who is speaking a guttural language, like German or Arabic, which may sound angry to the unaccustomed listener. This interpretation is common to a number of languages or dialects, such as Greeks, Israelis, African Americans, Poles, Italians, and Arabs to name a few. Many of us from the United States are unaccustomed to the emotional speech patterns of other cultures and may misinterpret this for anger. The context of the conversation and behavioral features of the individual will help in sorting out the true meaning of the situation.

Every culture has some element of saving or losing face as part its members' behavior. The interviewer has to balance the fact that merely participating in an interview may cause shame for some. This may increase resistance and reduce cooperation from the individual. Sometimes it is the interviewer's questions that trigger shame as the interviewer explores the topics. In other instances it may be the repetitive nature of the questions that makes the subject question whether he is being believed. The "cognitive interview"—an interview designed to assist a witness' recall—seeks to help deflect these thoughts by a series of instructions prior to beginning the interview.

Another way to establish rapport in most situations is by listening. Probing questions may make an individual feel as though they are being interrogated, while using narrative or open-ended questions encourage the person to respond with longer answers that provide more information. This allows the interviewer to observe the perspective of the subject and what he feels is important, rather than contaminating the view with the interviewer's words or bias. The interviewer then uses probing questions to clarify or expand the narrative, which makes sense to the subject who has been allowed to speak freely about his situation. The open narrative question is especially important to those cultures that may be less open to speaking freely in social contexts or those they find intimidating.

Nonverbal Response

The nonverbal world is also something an interviewer can focus on in a cross-cultural interview. While it is difficult for a non-native speaker to associate specific movements with a part of the individual's response, it may be apparent to the translator. The more often an interviewer can work with the same translator, the more aware the translator will become of what the interviewer finds valuable. Plus, the translator can be a valuable source of cultural information and insight into the subject's demeanor.

During a cross-cultural interview, the subject is constantly sending information on the nonverbal channel through his movements, gestures, and posture. Translators and native speakers can often help interpret the behaviors for the interviewer. However, the interviewer can, in general terms, observe the basic emotional displays and accurately identify the emotion in cross-cultural interviews.

More difficult is to establish the exact cause of the emotional response. The basic human emotions of fear, surprise, anger, happiness, sadness, disgust, and contempt are recognized by people across the globe.

These emotional displays may be modified by different cultures to minimize or mask the emotion during conversations. The British, Japanese, and American Indian all, to some extent, learn to control their emotions to conceal what they are feeling. We should also mention there are appropriate non-verbal behaviors that should accompany the emotional display; however, these may change from culture to culture.

For example, in most of the English-speaking industrialized nations, people will look down, talk slowly, frown, and avert their eyes when delivering bad news. In contrast the Japanese may smile as they inform another of the problem and may do the same when they are regretful or ashamed. This is the cultural way the Japanese express regret.

While the basic emotions are cross-culturally recognizable, there are differences in how much people will move their face and brows. The more stoic expressions come from the Asian cultures, such as Chinese, Japanese, and Koreans, who avoid extremes of behavior, including the basic emotions. To many Western cultures who are unfamiliar with the Asian expressions, this lack of facial affect leaves an impression of deception or non-cooperation, which may be totally incorrect.

A strong contrast to the Asians is the Middle East, African American, Latinos, and Jews. These groups often express themselves with stronger emotional displays, such as weeping, flailing arms, deep breathing, or calling out to God when expressing anguish or suffering. One can imagine the strong behavioral cultural differences of how the loss of a loved one may be expressed in these opposite cultural settings.

These cultural norms may also lead to concealing how much something hurts them physically or emotionally. The expression of pain is seen as a sign of weakness in many Asian cultures, while Puerto Ricans and Dominicans may loudly express their feelings of pain. Arabs and Middle Easterners may loudly call out for God's help while covering their face with their hands in response to pain or bad news. To those unfamiliar with these cultures, it may seem overly dramatic and even phony.

Physical Touching

Cultures may also differ in how much they touch and what it means when they do. The dominant groups in the United Kingdom, United States, and Canada tend to touch much less than other cultures, such as the Slavic, who hug, kiss, embrace, and shower verbal endearments on those they care about. Another example, touching someone on the shoulder to give comfort as done here in the United States would be insulting in the Middle East or Asia. For Muslims and certain other religions, it is not permitted to touch a member of the opposite sex unless they are related, but they may welcome a touch by a member of the same sex.

In many cultures males and females will walk arm-in-arm or holding hands with members of the same sex with no hint of sexual attraction. Touching varies significantly and should be treated carefully so no offense is given or taken, and when done while interviewing, it should be used sparingly, if at all.

We will continue this discussion in our next column.

On Thursday afternoon, June 21, in New Orleans at the 2012 National Retail Federation (NRF) loss prevention conference, Mike Amanek of Bloomingdale's, Bruce Pyke from The Bon-Ton Stores, Bob Vranek of Belk, and I moderated a very interesting roundtable on the subject of "internal theft." The hour-long session generated a series of provocative discussions on a variety of subjects. I thought that readers of this column might like a glimpse of the topics that came up in our group discussion.

Perhaps you have different preferences, but it is my observation that roundtables are some of the most valuable sessions to attend at loss prevention events. In this largely unstructured meeting format, approximately forty-five participants actively discussed a series of topics related to the problem of employee dishonesty and internal theft in the retail store.

Economic Downturn

To get things going, we first asked the attendees to explain their experiences with internal theft during the economic downturn. Contrary to expectations, we found that most companies experienced lower than expected rates and levels of employee dishonesty during the economic downturn and this ongoing period of high unemployment.

When participants were asked for explanations of this counterintuitive situation, a number of theories were offered. Some participants believed that under our current tight labor market, most associates did not want to jeopardize their jobs by involvement in dishonesty. Many employees were fearful that they would not be able to get another job if fired or prosecuted. Others believed that many of the most unproductive and dishonest employees had already been purged from their stores. As such, remaining employees were those who were the more honest and also persons who most highly valued their current retail careers.

Collaboration

Another topic that came up involved the increasingly disturbing situation where current employees collaborated with dishonest outsiders in order to "hook up" with employee insiders in order to jointly perpetrate theft from the store. Many participants of the roundtable told stories of these hybrid forms of theft where dishonest insiders enabled dishonest outsiders to carry out incidents of shoplifting, pass-throughs, burglaries, robberies, stock-room pilferage, and large-scale cargo and loading-dock thefts. It is clear that these hybrid types of crime constitute a major problem.

Screening associates to determine whether their "friends" have criminal aspirations is a difficult, but potentially productive way to prevent dishonest associates from helping outsiders to steal from their employers. This might be a perfect use of freely available social media information posted by your associates.

Employee Motivation

The final topic of discussion involved the controversial topic of providing financial rewards and other incentives as a way to motivate associates to turn in fellow employees who are stealing or engaging in other forms of illegal activity. Although I observed that many of my young students believed that it was culturally stigmatizing to "rat out" friends who were dishonest, no one in the room found that providing rewards for turning in others was a bad idea. In fact, the debate focused on how much to provide as a reward in terms of dollars or percentage recovered.

Despite the commonly found "culture of dishonesty" in our society, no participant thought that providing hotlines and rewards was an inherently bad idea. In fact, many thought that their companies did not provide a large enough reward for turning in fellow employees or shoplifting friends. These folks believed that if the reward was more significant, that even more people would be encouraged to "do the right thing" and stand up to protect the assets of their store.

Hopefully, the above summary will encourage further debate among the readers of this column as you determine how you would have personally responded to these roundtable discussion topics. In any event, I encourage you to attend roundtable sessions in future loss prevention conferences. I think that you will conclude, as I have, that these are an invaluable way to share ideas in a face-to-face format on the many controversial subjects that challenge our industry and profession.