COVID-19 pandemic has taken the world by storm. World over the governments and enterprises are coming to terms as to how to tackle both health & safety of their people. At the same time they’re exploring ways on the business continuity. Economists are already predicting that we’ve a recession around the corner leading to job losses.
The world will have to deal with increased crime rates and fraud and retailers are particularly vulnerable as well. NRF 2019 study (http://nrf.com/research/2019-organized-retail-crime-survey) estimates that average shrink rate for a retailer is 1.38%; i.e, about 1.38% of revenue is lost due to pilferage annually. Out of 1.38% of shrinkage, nearly two-thirds comes from internal and external thefts. In times such as this, it is important that retailers plug every hole they see in their balance sheet to protect their margins.
Frauds on the rise:
One of the popular types of fraud faced by retailers is return fraud. Organized crime rings typically use the retailer’s friendly return policy to buy expensive products and return fake equivalents of the same product. More often than not, the store associates are not trained to differentiate super fakes and the authentic products. It’s a double whammy for retailers; they lose the product, money and also end up having a fake product in their inventory. When the next customer picks up this fake product, it results in loss of reputation and can lead to lawsuits.
Dishonest employees are extremely creative in leveraging this return policy for their own benefit. For example, when customers buy a product and forget to take the receipt with them, it offers a window of opportunity for the store associate. Store associates pick such left-over receipts and create a false return transaction to pocket the refund amount.
We at Entrupy have been helping retailers to detect and prevent return frauds using our patented visual fingerprinting technology. It uses microscopic images of products taken using our specially engineered hardware. Entrupy’s hardware is an iPod accessory that magnifies images 260 times. Using the finer details in the product we build a unique virtual identity for every product we scan. Entrupy’s cloud software uses the virtual identity to detect if the same product was returned or if the returned product was a counterfeit one. Fingerprinting checks for 1:1 mapping of the microscopic image and hence doesn’t require AI like training.
How is it being used in retail?
Retailers fingerprint every product that they have in inventory using Entrupy’s device (akin to creating a barcode for every product). This process is called registration. Once a unique fingerprint is registered, it is securely stored in our cloud servers. Depending on the nature of retail, fingerprinting can be done at warehouses, distribution centers or at the retail stores.
When a customer brings a product for return, the store associate takes the fingerprint of the product using Entrupy device and it is then compared against the earlier registered fingerprint. Only if they match, the refund is processed. Entrupy’s solution addresses both internal theft by a dishonest employee and external return fraud done by organized crime rings. Take a look at the video (https://fingerprinting.entrupy.com) to see how the solution works.
Interested to know more, drop an email to firstname.lastname@example.org.