SAI Groups

Internal Fraud

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Retailers worldwide face mounting challenges from internal fraud, which can erode profits, damage reputations, and undermine trust. SAI visual AI platform leverages advanced computer vision and AI analytics to proactively detect and prevent a wide range of fraudulent activities within retail environments.

What is internal fraud?

In retail, internal fraud, also known as insider or occupational fraud, refers to illegal or unethical acts committed by the store staff for personal gain. Here are some typical instances observed in the retail sector

  • Voided items being handed to customers without payment
  • Markdown misuse involving staff giving out unauthorized discounts
  • Cash pilferage from tills
  • Processing returns when the customer is not present.
  • Abuse of colleague discount cards.
  • Loyalty card abuse which typically involves fraudulent accumulation or redemption of points.

    • Such schemes exploit the trust and access employees have, often bypassing traditional controls and causing significant financial and reputational harm.

    How internal fraud is detected?

    1. Real-Time Visual Monitoring
    SAI visual AI platform continuously analyzes CCTV video streams from checkout areas, aisles, and backrooms to detect suspicious behaviors and anomalies associated with internal fraud.

    2. AI-Powered Pattern Recognition
    The system uses advanced algorithms to recognize specific fraudulent actions, such as:

  • Voided Items Handed to Customers: The system detects when an item is scanned, voided, but still handed over.
  • Markdown Misuse: The system identifies unauthorized or excessive discounts applied at checkout.
  • Cash Pilferage: The system monitors cash handling at tills, alerting for suspicious withdrawals or discrepancies.
  • Customer-Not-Present Returns: The system detects returns processed without a customer physically present.
  • Colleague Discount Card Abuse: The system tracks usage patterns to spot misuse or sharing of staff discount cards.
  • Loyalty Card Abuse: The system analyzes redemption and accumulation patterns for anomalies that could indicate fraud.
  • Item consumption by staff in store
  • Loss of restricted items from kiosks

    • 3. Automated Alerts and Evidence Collection
    When suspicious activity is detected, SAI visual AI platform raises real-time alerts and displays them as notifications on the dashboard, which can be accessed by the store staff and the security team. It also automatically extracts and stores relevant video footage, creating legally admissible records for investigations and potential prosecution.

    Benefits of using the Internal Fraud feature

    Proactive Loss Prevention

    Detects and stops fraud in real time, reducing shrinkage and protecting profits.

    Operational Efficiency

    Automates surveillance and evidence gathering, freeing staff for customer service.

    Enhanced Staff and Customer Safety

    Reduces the need for confrontational interventions by providing discreet, actionable alerts.

    Data-Driven Insights

    Offers detailed analytics on fraud trends, enabling targeted training and policy adjustments.

    Regulatory Compliance

    Ensures robust documentation for audits and legal proceedings.

    FAQ

    How does the platform distinguish between genuine mistakes and fraudulent activity?

    The AI is trained on large datasets to recognize patterns that are typically seen in fraud versus accidental errors. Alerts are prioritized based on risk, and staff can review flagged incidents with supporting video evidence.

    Can the system handle new or evolving fraud tactics?

    Yes. The platform uses machine learning to continuously adapt to emerging threats, updating detection models as new fraud patterns are identified.