Managing risk at jewellery stores

Natasha Maroun, Managing Director of Gem & Jewel Acceptances

According to Natasha Maroun, MD of Gem & Jewel Acceptances, a specialist insurance underwriter, writing on behalf of Compass Insurance, criminals are beginning to use alternative modus operandi in order to escape detection. She was referring in particular to the recent case of R23 million worth of stock stolen from a Johannesburg diamond dealer, where the criminals dressed in a leading security firm's guard uniforms.

Possibly the work of a new crime syndicate, it highlights the need for the South African businesses to ensure they implement effective risk management strategies.

"It has become increasingly critical for retailers to consult with specialists in order to develop tailor-made risk management strategies, as criminals become increasingly unpredictable in their methods," she says.

"The suspects in the diamond dealer case seem to have had inside information, as the criminals had enough time to know how to dismantle the alarm, remove hard drives from the surveillance cameras and cut through the one-tonne safe."

Maroun says all clients carrying high values of stock should mitigate the risk by employing the services of two security companies, without each other's knowledge. "If a jewellery store owner for example, employed the services of a second security firm, the second company's alarm would have been set off once the perpetrators broke in, even if the one system that they were aware of was disabled."

Background checks, fidelity cover

"The retailer has the right to enquire about the security company's employees' criminal records, background checks and their minimum standards for employment."

Maroun says it is also essential for retailers to have fidelity cover, which covers any loss suffered because of the retailer's employees participating in a theft. "Unfortunately, no insurance company will cover a loss suffered because of a service provider that the insured company engages.

"It is also a good idea for retailers to belong to industry networks, which are very effective in circulating information about criminal syndicates to its members. For example, the Jewellery Council network sends images of perpetrators to all network members as soon as an incident occurs. The key here is that a syndicate may operate in Cape Town and then move to a new region to try again. However, if a store in Johannesburg has received a photograph or a copy of the ID of the person, they will already be on the lookout for the same face."

Maroun says this has proven very successful in catching criminals. "Historically, businesses didn't want to share information with competitors but in today's world, with syndicates devising innovative new ways to commit crime, this has become an ever more essential business practice.

"One can implement appropriate security measures yet one can never really determine when, where or how a theft may occur, so the best safety measure any jewellery store can have in place is a comprehensive insurance policy to cover against any loss," concludes Maroun.