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By Jo Best, 15 March 2005 16:45

NEWS When it comes to stopping shrinkage in the retail environment, CIOs need to think as much about psychology as technology, according to delegates at the Multi Channel Retail Show in London today.

Professor Joshua Bamfield, director of the Centre for Retail Research in Nottingham, said that often would-be fake refund fraudsters can often deterred if shop staff shift blame onto technology rather than store policy.

People tend to accept it if you say computer won't allow a cash refund [rather than explaining it's company procedure]," he said. "It reduces aggravation."

With almost as much of retail shrinkage down to staff as customers - 36 per cent and 43 per cent respectively - retailers are also keen to use both technology and psychology to stop fraud.

Lyn Blethyn, loss prevention manager for the Tussauds Group, which has recently installed a IP-connected CCTV system, said that often warning staff that they are being watched is enough to deter the potentially sticky-fingered - whether the equipment is installed or not.

"[Staff] think we have more CCTV than we do... Every year, we're kidding them," she added. "They're never quite sure what we're doing." The CCTV TV system is also key in proving fraud that has already happened, with staff often confessing before they can be shown the footage on a laptop, Blethyn said.

Jim Gillespie, director of shrink and loss prevention at US supermarket chain Farm Fresh, has already invested in a data mining system which he can use to psyche out the covert staff fraudsters as well as help out honest cashiers by showing those workers making the most refunds and voided sales their performance hasn't gone unnoticed.

"What's that do for the honest cashier? He thinks 'the store manager is trying to help me'... The dishonest cashier has two options - they can either stop doing whatever they're doing to cause the shrinkage or they can leave. Either's fine with me," he said.