Terms and Definitions

Loss Prevention Terminology

Loss Prevention - A general term for multidisciplinary activity within the organization aimed at identifying the organization's weaknesses and flaws in the various work processes, such as management errors, mishandling of the product chain and employee theft within the organization. Data from international surveys indicate a loss of between 0.5% and 3% of overall company sales. Our experience has shown that these numbers, provided by senior executives in Israel's retail industry, and derived from academic studies worldwide, accurately reflect reality.

Information Security - Maintaining the confidentiality of the information held, processed or transferred by the organization. Information security is ensured through technological as well as organizational means, such as company procedures (shredding documents, leaving documents in locked and secured rooms).
This activity is meant to protect the organization from industrial espionage and information theft by the competition or other parties.

Physical Security - Protecting the organization from sabotage, robbery, break-ins and theft. Technological means are used (cameras, electronic detectors, entrance monitoring and recording systems, etc.) as well as organizational means such as security officers, risk surveys and safety procedures.

Physical Information Security - Assessing processes that affect information leaks/pricing/property and work methods, information routes, authorized access, storage and classification of documents and media, document shredding procedures, etc.

Intellectual Property – A general term for rights to man-made intangible assets such as works of art, reputation, inventions, etc. Securing intellectual property protects the organization from product forgery or copyright, patents and trademark theft.

Logistic Security - Protecting the organization from theft along the logistic chain (handling cargo, transportation merchandise storage) perpetrated both by an individual from within the organization who is part of the logistical chain and an outside party who breaks in. Logistic security is ensured by conducting a risk survey, drafting the relevant procedures, training employees and guards as well as through the use of technological measures.

Risk Survey - Identifying the risk factors liable to cause financial damage to the organization and proposing potential solutions, including setting priorities for neutralizing the risks and applying the solutions in practice.

Risk Management - Ongoing analysis of the existing and nascent high risk processes, and proposing creative solutions to neutralize them, in a manner suited to the spirit of the organization. Managing and evaluating risks is a risk reduction methodology in the event of a flawed process or a loss of money or stock. Most risk assessments address the risk's impact on the organization's assets and profitability. We all engage in risk assessment on a daily basis whenever we are about to cross the street.

Security Consulting - Mapping risks and devising tailor-made solutions and modes of action to neutralize the risks with protection systems and by placing the organization at the forefront of technology. The consulting services encompass:

  • Physical security for the company's facilities.
  • Planning protective systems beyond the stipulations of the insurance policies.

CCTV System and Analysis - Providing monitoring and information services to chains and businesses, combined with technological measures such as surveillance systems. The recorded material is then analyzed in order to form a clear picture of the employee's work in the business or organization.

Industrial Espionage - Collecting secret information about the competitors' products and work processes, as an illegitimate part of business intelligence.
Industrial espionage can be conducted on a private or an international level, and the term is also used for to denote the collection of secret information about the work methods of non-industrial organizations.
The methods used in industrial espionage are fundamentally similar to those used in military espionage. Applying these in a civilian context constitutes a criminal offense according to Israeli law.
The methods used include wiretapping, hidden cameras, surveillance, stealing documents and production plans, mail theft, bribing employees, tapping computer systems and stealing computers and storage devices.

Investigative Auditing – It originates from standard auditing, and its purpose is to detect and quantify acts of fraud, money laundering and errors and to create a process that will prevent such events from occurring in the future. Investigative auditing is conducted in addition to standard auditing, when the need to clarify details arises.

Embezzlement - Committing an act or acts for the sake of financial gain. The perpetrator abuses the information, the position, the status or the resources he was provided with. The embezzler will usually employ all the means at his disposal to conceal his actions and cover up his tracks (as opposed to theft, where the damage is immediate). Embezzlement is usually concealed by forging documents and false accounting. The Israeli public has been exposed to many publications regarding embezzlement involving banks, public institutions and public figures. Embezzlement is exposed through standard and investigative auditing.

Fraud - A betrayal of trust committed by an employee or employees at the workplace. By committing fraud, the individual in question takes advantage of his or her position and status to steal money or goods. Fraud is typically perpetrated by making false entries in documents in an attempt to mislead the employer or the organization's control system. Periodically, incidents are published in which the public is exposed to exceptional acts of fraud committed by bank clerks or people in senior positions.
Based on our experience, many cases of fraud are not brought to the attention of the police or the public, but rather are handled within the organization in order to avoid rocking the boat.

Wiretapping – Surveying, recording or listening to another person's conversation without the consent of at least one of the parties to the conversation. Listening in on computerized communication is also considered wiretapping. Wiretapping is generally used to obtain intelligence information or to investigate past acts, and is done in secret. Wiretapping can be performed in various ways, such as eavesdropping on telephone conversations (openly or secretly), or using electronic devices (for recording or amplifying) to eavesdrop on conversations held in a given place.

Reliability Assessment – Performing and implementing screening processes and formulating a policy on the subject of employee reliability that will serve as the standard for the employees' credibility prior to their employment in the company.

Shoplifting – A well-known concept primarily among retailers in Israel and abroad, which denotes the theft of products from stores by customers. Retailers incur tremendous damage as a result and its effect on gross profits is apparent in a stock/money shortfall. Coping with this phenomenon differs from one country to the next depending on the criminal law regulations and the authority the legislature places in the hands of the citizen/retailer to cope with the problem.
The most common means of confronting shoplifting is through both hidden and manifest technological devices, proper commercial planning of the stores, undercover security agents and various deterrence measures.
Shoplifting is not necessarily akin to kleptomania, which is defined as a mental disorder, but kleptomania does account for some instances of shoplifting.

Employee Theft - Theft committed by employees is a relatively common phenomenon among employers. The employee's proximity to merchandise, money, raw materials and the like creates temptations that at least half of all employees cannot resist.
Employee theft can take on many different forms – be it stealing products from the store or factory, stealing money, distributing products among friends and all sorts of creative ways to perpetrate the act.
The process of addressing the problem focuses on two main stages: the initial screening stage, which includes acceptance and suitability testing, and the second stage of both overt and secret monitoring for the purpose of tracking employees who have committed theft, identifying new breaches and curtailing the problem.
The legislature takes a graver view of this offense than of shoplifting.