Fraud costs retailers dearly. For credit card purchases, for example, it is the retailer?not the card issuer?that picks up the tab for fraudulent transactions below the "floor limit" negotiated with the card issuers. In Britain, an application using Europe\u2019s GSM-based text-messaging standard and real-time point-of-sale analysis is catching crooks red-handed. Venerable London-based retailer Marks & Spencer has reduced fraud by 10 percent, according Martin Wilkinson, the retailer\u2019s aptly titled profit protection manager. Here\u2019s how it works: Point-of-sale transactions are streamed directly from Marks & Spencer\u2019s 312 British stores into a server at the company\u2019s main computer center?some 10 million purchases every week. There, the transaction is analyzed in real-time by a 5,000-line program written in Microsoft\u2019s Visual Studio.NET, which can process 700 transactions per second. The objective is to "pattern match" each sale against built-in rules that the company\u2019s profit protection group has devised to spot suspicious trades. Sources close to the project say there are about 500 of them, which can be changed or added to by the profit protection group without recourse to IT personnel.In addition to credit card fraud, the rules include the ability to track transactions by an individual account card, a staff member or even an individual cash register?the latter because employees also commit fraud by incorrectly processing refunds, for example. Other rules, the source says, check for multiple refunds on a single transaction, full-price refunds on a sale item and the fraudulent use of gift vouchers.When a suspicious transaction is encountered, the system sends out an alert. The preferred means of doing that is to send a text message to a security guard\u2019s cell phone, allowing him to apprehend and question the shopper while they are still at the register. If fraud has taken place, the system also produces on demand a full "evidence pack" for the British courts: the register report, the card numbers used and even a video recording of it taking place.The system, which took six weeks to develop, has impressed Marks & Spencer top management with a first-year ROI of 415 percent. Even the thieves have taken note. Oftentimes, Wilkinson says, "they now simply go someplace else."