Retailer cuts checkout fraud with alert software

High-street fashion chain River Island is cracking down on internal fraud in its 200 UK and Ireland stores with software that analyses all point-of-sale data and flags up any unusual transactions.

Before the system was implemented River Island's fraud prevention auditors relied largely on alerts from store managers about in-store fraud.

These incidents typically include members of staff putting refunds against their own credit cards or giving non-authorised price reductions to friends above the approved discount level.

Ben Lewis, operations director at River Island, told silicon.com: "It's always been a difficult job to identify fraud in a store and the audit team have a considerable amount of stores to visit and data to sift through."

The system is intended not only to make it easier for the audit team to spot fraud but also to act as a deterrent to staff.

"The majority of savings are in prevention of fraud and I do expect the deterrent effect to have a considerable effect. It is another weapon in our armoury," said Lewis.

The Fraud Alerter software from Innovetra will first extract, filter and then clean all electronic point-of-sale data from River Island's branch network. The data is then checked for unusual transactions against user-defined patterns set by the fraud prevention team.

"It helps us identify the needle in the haystack and indeed, which haystack it's in," Lewis said.

The store began implementation of the fraud alert system last August and had it up and running by October but Lewis said it will be an ongoing process to find improved ways of using the system by refining the data analysis tools and fraud patterns to spot.

Lewis declined to reveal how much the system had cost to implement but said it will also be of value for procedural compliance purposes.