School’s Out – Time To Get Ready For School: Tips To Prepare for a Successful Back To School Season

May 31, 2018 by Leave a Comment

Summertime is here and now is the time for children to rejoice and shout for glee as most are finishing up their school year. Put away the pens and paper and lunchboxes and prepare to enjoy the warm, sunny days. No Mr. and Ms. Retailer, not YOU, the children. The moment the schools let out is the moment you should be preparing to roll out the merchandise for the next school year. Wait too long and you will be a step or two behind your competition.

Certainly, most children will not be anxious to go school shopping so soon after starting their vacations but we, the dads and moms out here, are always looking for special sales and deals that will save us a few bucks. Education may be free but all of the accessories are not. Think about what we parents are purchasing to send the kids off to school. We are asked to provide crayons, pencils, pens, glue, and paper. Lunchboxes, backpacks (wait, regular or see-through?), binders and notecards also fill our school supply lists. From there schools and grades may have varying requirements. The retailer who is going to be top of the class is the one who will anticipate the needs of the pupils and parents and prepares accordingly.

What are some of those things that you can do to get the head start that will drive sales for your business?

  • If you aren’t keeping old school supply lists filed away, start doing so. This will give you a good idea of what teachers will probably ask parents to provide the coming year. The schools will probably not make lists for the coming year available until July so knowing last year’s information gains you some advantage.
  • Advertise. Use social media and in-store flyers as cost-effective means of getting the word out to customers. You may also want to check on the price of a radio spot to air a short commercial. If you only rely on posting flyers and banners in the store you are limiting your advertising to those customers already shopping with you. You need to spread the message to bring in additional shoppers.
  • Create displays near the front of the store that focuses on school-related supplies that complement each other. For example, create an endcap with binders, loose-leaf paper, pencils, pens, crayons, compasses, and protractors. If your store is geared to clothing then displays for children’s clothing should be on focal points. Regardless of what your store specializes in, order a one-time shipment of some lunchboxes and food storage containers for sandwiches, chips, dressings/sauces. Parents are conscientious of rising school lunch prices and reusable containers appeal to both the cost concerned and environmentally focused families.
  • In the process of creating the displays don’t forget about merchandise protection. Use electronic article surveillance labels and hard tags on everything. Don’t lose sight of the fact that those displays will also attract the attention of shoplifters and they will steal merchandise that isn’t secure. Small and expensive items will be especially tempting.
  • Begin clearance pricing some summer products earlier to free up floor space for back to school related merchandise.
  • An easy to overlook opportunity is to keep your check lanes full of impulse buy goods. Snacks and drinks are top items but finding cool gadgets and pens that may interest students and adults are great opportunities for a few extra dollars.
  • Don’t forget about add-on sale items. Calculators tend to be popular and they need batteries. Peghook your calculators, keeping your high-end TI-83’s, TI-84’s, etc. in Alpha Keeper boxes to make them available to customers while protecting them from theft. Add the corresponding AA and AAA batteries on additional rows of peg hooks and deter theft by using Auto Peg Tags. Speaking of batteries it would also be a good idea to place battery chargers and rechargeable batteries in this type of display. Again, expense minded and green-minded patrons will find something to appeal to them here.

It is not always easy to think outside the box when anticipating the needs of school students especially if your store specializes in one area but it can be done. Be creative and it can pay dividends.

A final thought on back to school sales opportunities. Some retailers offer special deals to teachers (who present official credentials). Not only does this help your profit line it is a huge boon for teachers who often use their own money for classroom supplies. You can develop a new loyal customer base with such an offer. Make preparations early for the return to the classroom and you will demonstrate you have learned your lesson well.

     

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Inventory Over? Scrutinize The Results If They Seem Askew

May 31, 2018 by Leave a Comment

Some people in retail look forward to it and some dread it. What am I talking about? Inventory! From the planning stages and meetings with the inventory counting team to the actual inventory day it can all be a lot to accomplish even for the best of planners. But what happens when you get through the actual counting phase? What comes next? You wait for the results. You may get preliminary results immediately but for larger stores booked inventory may take several weeks and they have teams to analyze the results. As a small retailer you may have to analyze the reports yourself but do you really understand what you are looking for? Are your results accurate? Stores have to keep track of what they have on hand and owners need to know where shortage has taken place and how it has happened.

A detailed review of the inventory results is important. They can identify areas that may be indicators of poor vendor service. If your store sells groceries, snacks, soft drinks or adult beverages you are most likely served by direct store delivery vendors. If a shortage is somewhat high in these departments you might not be receiving all of the credits you are supposed to receive. This is not necessarily an indicator of theft but it could be. It may be simply poor scanning and crediting for merchandise a vendor is removing from the store. Those credits could be due to product getting ready to expire or that has expired. It may be it was a promotional product that isn’t selling in the quantities the vendor was hoping for. Whatever the reason, the representative could have miscued an entry, for example, scanning a partial pallet of sodas and keying in a quantity of 10 versus 100. If the vendor is in a hurry and no one caught the error at the time it could be costing your store a lot of money.

While we are talking about administrative errors causing shortage it is important that store owners take a look at all of their billings. In a big box retail store, we had monthly P/L (profit/loss) statements that showed the dollar amounts of merchandise shipped to us for each department. One year when inventory results revealed a high shortage result in our shoe department I went back through all of the P/L statements and found an unusual billing amount. I tried to correlate it to a seasonal reset or specific event but was unable to pin it to anything in particular. I sent my concern to our inventory analysts who reviewed the information and found we had been overcharged $10,000 in the shoe department that particular month. Review P/L statements or invoices for potential errors if inventory results seem out of line.

Look at the departments that are showing the shortage. Do they look like areas that would be prone to theft or could there be other administrative issues involved? For example, if you own an office supply store and you have a high shrinkage in printer ink cartridges there is a strong probability this is a theft concern. On the other hand, shrink in foam project boards could be due to process issues. Are individual foam boards shipped in multi-pack shrink wrap? It could be the items are not being separated and a bulk set is improperly sold as a single unit at the register. Have individual units been damaged and unsellable but not properly marked out of stock before tossing them? Foam boards are probably not being stolen but improper handling is costing money to your store just the same.

Certainly, theft has to be a consideration in the review of inventory results. But one must be careful not to attribute ALL shortage to theft. Doing so may keep you from impacting up to 26.7% of your losses in the next inventory cycle. According to the 2017 National Retail Security Survey, 21.3% of a shortage is due to administrative and paperwork errors and 5.4% is the result of vendor fraud or errors. That said it is important to dig into potential theft concerns that are impacting your store. Are you the target of shoplifters? Do you have an employee theft problem you did not realize existed? Getting a handle on theft must be part of your follow-up in creating a shortage action plan to improve shrinkage. Consultation with Loss Prevention Systems Inc. is a good starting point for finding a solution to all of your shortage concerns, theft included.

 If you take inventory and find you are missing SKU’s because results are askew, take time to dig into the findings. Knowing where shortage happened this year and taking steps to correct it will give improved results next year.

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Stop The Flow Of Bad Employees!

April 30, 2018 by Leave a Comment

The IT world has a phrase “garbage in, garbage out”. The same concept applies to hiring new employees. If you do not put effort into selecting a new employee, then chances are you will be disappointed down the road.

In my 40+ years of loss prevention experience, I have investigated and interrogated a little over 2300 employees for theft. When you have seen that much theft, you begin to look at the source. Loss Prevention folks tend to be the ones catching the sludge coming out of the end of the pipe. We are dealing with employees that no one else can deal with. Normal management techniques do not work. So I began looking back up the pipeline, to the source. Loss Prevention starts at the time an applicant even thinks about putting in an application for work with your company.

Look at it as filtering out as many bad people as we possibly can in this process. When a person visits your business, in person or the employment page on your website to put in an application what do they see? It should be a clean image. Do you drug test? That wording or sign makes many folks that know they will not pass a drug screen turn around right there. So the filtering process has started.

Next, do they see that you will do a thorough background check? Criminal records check, credit check, education verification, sex offender register, driver’s license check (if applicable), previous employment verification and so on. A person with a clean “record” or with minor issues only, will not be concerned. However, the folks with poor records may simply move on. So we just filtered out more. These are people we are not interested in talking to and would be a waste of our time.

If you have our Applicant Management Center (AMC) solution, then the next step is that the candidate will fill out your custom application online. So instead of getting paper documents with handwriting that may be poor and full of inaccuracies, you are getting a file with data that you can read and respond to. One of the documents that can be included in this process is the release of background checks. Folks that have a bad record that thought you really might not check are now faced with signing a legal document. They know that if they lied on your AMC application, that you will find out. We just filtered out some more people we do not want to hire. The good folks can then attach their resume or any other documents you require.

With the Applicant Management Center, you get an organized, readable packet that you can review online and print out if necessary. I should mention at this point that the Applicant Management Center archives all of your applicant’s information. So you can go back even years later to retrieve the information.

Upon your review, you can email the applicant to set up a phone or in-person interview, ask questions or send a “no thank you, not interested note”. If you decide to go forward with an interview, then you should have already taken our personal, FREE, LIVE two-hour seminar:

Armed with the techniques we teach, you are better suited to get more truthful answers to your questions. For established Loss Prevention Systems customers, we conduct this training as reasonably often as you need it – free of charge. We train you how to set up the interview and how to ask questions. For example, an applicant most likely will tell you if they have stolen from previous employers. You just need to know how to ask.

Next in the filtering process is to actually run a background investigation. If you have our AMC, then all you do is click a box and the background checks begin. For example, if the checks you want include a drug screen then your applicant is contacted through email with a link to set up an appointment at a lab near them (we are Nationwide). Once that process is completed, then you receive the results automatically in AMC.

Criminal records checks would also start. We like to run a Social Security Number (SSN) Trace before we run criminal records. An SSN Trace is basically the “header” off of the applicant’s credit history. It does not provide any financial information. It does, however, give us the addresses where the person has lived. We can then check those jurisdictions for criminal records. That way, if the applicant omits a place they have lived where they have a criminal record, we should find it anyway. SSN Traces are VERY inexpensive to run. We do an actual “Court House” search, not some off-beat “database” masquerading as a records check.  Many States allow for Statewide records checks (all counties & cities). But there are some that do not. At that point, we search County records.

So all of the checks have been run and as the results available in your Applicant Management Center are updated, you are notified. You can continue with the process, if necessary another interview, additional questions, job offer or letting the candidate know they have not been selected.

AMC is very inexpensive to onboard, our background checks very competitively priced with some of the fastest turnarounds in the industry. If you would like to try AMC, we will set you up for a FREE SIX MONTH TRIAL, no obligation. You would simply pay for any background checks you request along the way. However, you do not need to request any background checks to have our Applicant Management Center.

Contact us today for more information and to get started.

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May is the month to prepare for your summer sales season

April 30, 2018 by Leave a Comment

March is known for coming in like a lion and going out like a lamb. April showers bring May flowers but what in the world does May bring? May ushers in the summer sales season! Spring is wrapping up and now is the time to be getting your store ready for all of the shoppers looking for the items that will make the long, warm days of June, July and August a memorable time. The big stores are rolling out grills, picnic wares and yard games.  They are loading up with tons of bathing suits, beach towels, sunscreens and sunglasses. The big boys appeal to all of the summer trends in almost every department. They are also preparing for criminal activity and preparing to prevent it.

     With the end of May families start to travel and take vacations, children and teens are out of school and so there is just more free time on people’s hands. No, I’m not advocating doing away with summer vacations from school (I remember my school days and my break times could never get here fast enough). The simple fact is that with more people coming and going into stores theft will increase as will sales. Big box retailers prepare for this influx of traffic. Store Managers are setting planograms and endcaps to encourage the sale of those items that are relevant to the tourist, vacationer and outdoor-minded families. Loss Prevention Managers are evaluating product placement and the appropriate retail anti-theft devices for the particular merchandise in question. They may also be reviewing camera coverage to ensure thieves will be discouraged from trying to steal. Electronic Article Surveillance Systems will be tested for functionality and that tagging standards are met. The small business retail owner could have to do such things on his/her own. If you are that owner you may not even think you have a store that lends itself to seasonal merchandise sales. Take a look again, you may have more items that can be season specific than you think. You may also be able to take advantage of Loss prevention measures you have not implemented yet.

     If a store specializes in jewelry sales it may not occur to an owner that there is a seasonal element to it. Jewelry would seem to be a year-round item to sell but think about your merchandise in terms of accessorizing summer dresses or casual watches for a man preparing to go on a trip. Someone on a cruise may need jewelry that will accentuate an evening dress for formal dinners. How about the small corner grocer? What kind of impact can summer have in that store? Think about the traditional things we do during the summer days. We load up coolers with soft drinks and beer. We have cookouts with hot dogs, burgers, marshmallows, buns, condiments etcetera. Put the dry goods at the front of the store in high traffic areas to impact customer interest. Running a hardware store means putting lawn and garden care tools and supplies in front of the customers. Maybe you carry drink coolers or gas containers for boaters. Product placement is key to reminding customers what they need for the season.

     As you begin strategizing about how the merchandise you carry can have a seasonal component you also want to think about whether those goods will be stolen. Retail merchandise anti-theft devices are available for nearly every single item that is sold. It is simply a matter of finding the correct tag or label for the item. If you are going to promote meat for summer cookouts you have to know that there are going to be shoplifters who will try to steal some of it. Using food-safe Checkpoint EAS labels will prevent pilferage while allowing you the freedom to fill your meat freezers with the items that will increase sales. Having a grill display may be an opportunity to use an Alpha Security cable lock to keep it from being rolled out the door. Condiments on that display can be protected with EAS soft tags.  An end cap with bathing suits near the front of the store will drive sales and theft but clothing security tags will deter shoplifters. Jewelry store owners, you will be happy to know there are jewelry locks available to permit open-air display which can increase sales.

     Be ready for summer. Sales will sizzle as the days heat up if you use May to get your merchandise in front of the shoppers. Prepare displays that will mesmerize your customers and entice them to make purchases. In the process, don’t forget to use merchandise protection strategies. Increased foot traffic does not have to mean increased theft if you protect your products with the appropriate devices.

      

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Memorial Day Sales With A Different Twist 

April 30, 2018 by Leave a Comment

Holiday sales events and promotions are intended to boost retail sales. The obvious big event is the Christmas holiday season which seems to begin in October for many retailers. The event carries into January when merchandise goes clearance as retailers prepare for the next holiday event and the beginning of the Spring sales lines.  During the remainder of the year, retailers also take advantage of other holidays by appealing to customers. These events just are not as extravagant in terms of time or advertising.  Clothing stores conduct promotions at Easter to sell dresses, suits and related accessories. Grocery stores and discount retailers run special deals on candy, eggs, toys, and baskets. The 4th of July sales may be geared towards parties, cookouts, and summer themed goods like bathing suits. The sales don’t necessarily have anything to do with the holiday being celebrated they simply entice customers to come in for the low prices. Below are a few ads I found online for previous Memorial Day sales to illustrate my point:

  • A furniture store: $1 Down and 60 months no interest
  • A Home Improvement store: 10% – 30% Off Major Appliances $396 or more
  • A Car Dealership: Memorial Day 100 Sale – Payments as low as $100/month
  • A Grocery Store: Big Three Day Sale

Many of the ads feature red, white and blueprint as well as stars and stripes in attempts to appeal to the patriotism of potential shoppers. I understand the need for merchants to do everything they can to increase sales. Retail is competitive and in order to stay in business owners must take advantage of opportunities as they arise.

     What I would like to suggest is that retailers look more closely at the holiday they are running promotional campaigns for. Try to see if there is some way to honor the holiday, specifically Memorial Day. I am suggesting that if a retailer is holding a Memorial Day sale they take the opportunity to honor the fallen soldiers for whom the day is remembering. This is no easy undertaking. I have seen restaurants that have attempted to recognize the sacrifices of the fallen with discounts and free meals for military veterans. Despite the good intentions, they get grief from some people (I assume they are veterans) who chastise them for not recognizing the difference between Memorial Day and Veteran’s Day. As a veteran, I appreciate the effort shown and think that the griping is misplaced. There are few ways they can recognize fallen heroes but a meal or discount is the form of appreciation they can offer.

     What can a retailer do then to promote sales and keep to the spirit of the Memorial Day holiday? I would like to offer the following ideas:

  • Offer a portion of each transaction to a non-profit agency that provides assistance to the widows and children of veterans who have fallen in combat. Just a few of the groups that help such families include:

Fallen Patriot Fund
www.fallenpatriotfund.org

Faces of Valor USA

http://www.facesofvalorusa.org/

Children of Fallen Soldiers Relief Fund

http://www.cfsrf.org/

These are just three organizations that provide such assistance and there are many more out there.

  • While it has been the source of some contention you could consider offering a discount of 10% or greater to service members or veterans who can show a military ID or a copy of a DD 214 form (a document that shows a veteran has served).
  • Consider setting up a display for Memorial Day, often called a Fallen Soldier Table, a White Table or a Missing Man Table. The effort will not go unnoticed by those who have served or the family members of fallen soldiers. The displays are not difficult to prepare https://www.veteranscaucus.org/index.php/events/memorial-day/america-s-white-table
  • If taking a portion of a day’s sales is not in your budget, a donation can or collection jar with a designated charitable organization listed is an appropriate alternative.
  • Finally, invite a veteran’s group such as the VFW (Veterans of Foreign Wars) to hand out poppies for a donation at your store. https://www.vfw.org/community/community-initiatives/buddy-poppy 

The VFW uses the money collected to provide financial assistance in maintaining state and national veteran’s rehabilitation and service programs and partially supports the VFW National Home for Children.

The ideas are certainly not all-inclusive and you may find some other source of recognition of the sacrifices made by our fallen heroes. The point is that you honor the day and what it represents as you still run your sales and specials.  Remember those who have made it possible for you to operate your business in a free country.

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MAYDAY!  What are the steps you take in response to a crisis?

April 30, 2018 by Leave a Comment

What do you do when a crisis occurs? Many people would say they take steps to address the crisis. Initially, that may sound like a good response unless you never planned on how you would react if that crisis were to take place. Think about it for a moment. If your business was on fire would you want firemen pulling up in their cars without the right gear or a plan of action of how they will take care of the fire? Sure it’s good to have the firemen there but if they don’t have the resources they need or a strategy on how to put out a house fire then the response is pointless. Police officers train on how to respond to a bank robbery in progress but the reality is many officers will never face that situation. According to a Cleveland Clinic Survey, 54% of Americans say they know CPR but the vast majority of us will never be called upon to use that training. So why do we do it? Why do we train for circumstances that are unlikely to ever confront us? We do it so we will be prepared for that one-in-a-million chance that we might have to apply that knowledge. President John F. Kennedy once said, “The time to repair the roof is when the sun is shining.” Attempting to play it by ear should an emergency happen is not a plan and may even make a problem worse.

    There are those who would choose to argue that it is not feasible to plan for every contingency or crisis. There is a hint of truth in that statement. I may not be able to plan for something I have no knowledge of. I could not plan for what to do for a patient losing blood pressure during a surgery. That is an extraordinary event that I would have no idea how to address. It is beyond the basic first aid training I had as a Boy Scout and refresher training I have had in my job. I think I can stop bleeding. I believe I can apply a tourniquet if it were absolutely necessary. Much more than that and I am way beyond my capabilities and the training I have received. You as a store manager would never be expected to stop a robber as he holds your business up at gunpoint. You CAN plan beforehand how your team should react and the steps they should take during and after the robbery. Pretending you and your staff will just deal with it should the situation arise is foolhardy. Plans that have been made and are reviewed on a regular basis help people stay calm if and when the crisis happens.

     When pilots call a Mayday, they may be nervous or even scared but it is a controlled fear. Fear is not controlling their behaviors and actions. Training takes over and they use their training to solve the problems. Sometimes the scenario has been practiced and other times it takes reasoning to sort out the situation. Emergencies rarely proceed in a textbook manner so they don’t lend themselves exactly to the plans that were made. Planning for contingencies makes a team ready for the eventuality a crisis does arise.

     So what is a manager to plan for? There are so many bad things that can happen it seems inconceivable to cover all of your bases, right? Wrong. Start with the basics looking at the most likely eventualities. Injuries will require first aid. Do you have a first aid kit? Who is trained to use it? Is there an emergency contact list? Can you arrange for certified first aid training for some or all of your employees or managers? Robberies could happen. What steps are you taking to minimize the chances of a robbery? Are employees trained to give a robber what they demand? Do they know not to touch anything and not to follow a robber out of the store? Do your managers know how to respond to weather emergencies? Does your store have a safe location in the event of a tornado? Do all of your employees know where that is?

     Plan for emergencies and review those plans with managers and employees. Be open to improving on plans. Don’t allow them to sit on a shelf and gather dust. Review emergency procedures on a regular basis and when you do have to make your own Mayday call you can be like that pilot who stays cool and calm and ensures the safety of all souls on board. The plan may be useless but the planning will be indispensable.

 

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Employee Training

April 17, 2018 by Leave a Comment

The scary shoplifting cases we hear and see on TV, or on newspapers in the United States, are becoming too commonplace to rendered us shocked. 

Shoplifting has always been a problem for stores across the globe, but now, people are losing their lives because we put more value on a bag of cookies than a human’s life. The incidents that are happening now concerning shoplifting should make us ponder whether the reactions, lives lost and the way our employees conduct themselves during a shoplifting incident merits those responses.

We should not forget that Shoplifting is a crime and that as an owner of a retail store your livelihood depends on the profits that you can gain by being a responsible owner. But, we cannot forget that we are dealing with human lives as well. 

If the price of a bag of cookies has the same value to you as a shop owner than a human life, then deterrents to prevent shoplifting are probably of no interest to you. But, if you believe that prevention to these crimes is the beginning of solving a major social issue in this country, then maybe prevention methods and other solutions are likely to be of interest to you as an owner.

  1. Training  — We have read more than once about the death of an accused shoplifter in a store.  Authorities are called to the business when the shoplifting incident has gone out of hands and the resulting confrontation has led to the death of the accused shoplifter. Now, what?  Lawyers, police departments and customers are involved, and the incident has become a national news piece.  Providing training to your employees to respond appropriately to a shoplifting incident has proven to be an investment that you will not regret and lives that will not be lost.
  2. CCTV cameras, prevention systems, and facial recognition software are some of the preventable shoplifting measures you can use to prevent, deter and fight shoplifting in your stores.  These are some of the investments that apart from your employees will become invaluable to you and pay for themselves in the short run.
  3. Inventory — If you know what you are selling, what is being stolen, and what are some of the items that are more enticing for shoplifters-because of the resale value or ease of trading — you may be able to use more of your resources to protect those aisles or move them to a safer place.  Being aware of what is happening in your store is instrumental in the prevention of shoplifting.
  4. Employees that care what is happening in your store is an issue that is too important to ignore.  Studies have shown that happy employees make great employees and can boost the morale of the people that work with them.  Your responsibility as an owner begins by rewarding your employees – By increasing their salary, offering incentives, and/or offering praise-your business can gain the caring you need to protect your store.
  5. Hiring the right people for your store begins by using the tools at your disposal that can make a difference in your hiring.  Background checks are the first step in ensuring you have the right people in place.

The rewards of paying for your employees’ training can be seen almost immediately.  There is no reason why the investment should be put elsewhere when employee ’s training has been shown to be a great and continues asset for the business owner.

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Cashiers Stealing?!?!? Yes They Do! From You Also!

March 30, 2018 by Leave a Comment

Recently, I conducted an employee theft investigation for a client. I want to share some of the findings from that investigation in the hopes that you can use it to review your own potential for losses.

A Cashier had befriended a frequent customer. This Retailer sells merchandise to Contractors. The customer in question had an outstanding credit on their account of a few hundred dollars. As they went through the Point Of Sale (POS/cash register) the Cashier looked up and then applied the credit to the current sale. This is normal practice for this particular Retailer. The customer then said to the Cashier “if you have more of those, I will take them”. So the Cashier looked up some other credits, from other customers that were quite aged and never used. She found that she was able to reassign the credit to this customer and applied another credit to their current purchase.

As you can imagine this became a regular occurrence. However, no one caught on. This went on for some time. It was not discovered until a recent credit was used and raised a red flag. The CFO began an investigation and revealed that there had been thousands of dollars stolen this way. The POS activity is recorded with video cameras but the full extent could not be confirmed because the video recorder hard drive did not have the capacity for more than about three days of video.

I was asked to investigate. After review of the evidence and information, I interviewed the Cashier. She is a 21-year-old single mother of 3. She has no property, car or house. Her Mother brings her back and forth to work. An Aunt watches the children.

The first thing I do when I talk to an employee under investigation is what is called a Behavioral Analysis Interview (BAI). A BAI tells me two things: first, if the person is involved in the loss (not if they did it or not) and second what they do when they lie. Some refer to this as body language. It is a comparison of verbal and non-verbal responses to a structured set of questions. Once I have both of these pieces in place, I am in control of the conversation. If they lie to me I know it. I should add that I have conducted over 2300 of these interviews/interrogations.

I then switched to interrogation mode. An interrogation is a structured conversation. My voice stays level and calm. There are no threats, promises, abuse, bright lights, rubber hoses….. (no, you can’t use your antique thumb screw collection). After a while, she “broke” and confessed to what she did. She told me that she had been doing this for 10 months totaling over $11,000. The customer was paying her off outside of work. I then went through the evidence which up to this point is never shown to a subject. She confirmed what we had. She then incorporated her admissions into a written statement.

After reviewing the facts with the Senior Management of the company, I was instructed to contact the Police. Officers responded and took her into custody. She was charged with felonies both theft and embezzlement. Needless to say, she was terminated at that time. The company will decide at a later point whether to file a civil suit against her or not. You may be asking yourself right now “why would the company waste time/money filing a civil suit against someone that has no assets?” There are actually very good reasons to do this. In most cases, it is about ensuring that everyone else understands what will happen if someone steals from YOUR business.

You should ask these questions about your operation:

  • Does your POS system allow a Cashier to reassign customer credits without Manager approval and signature?
  • Do all customer returns require a Manager to review and sign off at the time of the return (customer & merchandise present)?
  • Are all credits, returns, voids, and no-sales reviewed at end of the day by a Manager?
  • Are any discrepancies reviewed with the Cashier that day or the next day to gain an explanation? Is corrective action taken right away if the Cashier is not following policy/procedure?
  • Is someone else then reviewing what the store turned in? Managers can be involved in theft also.
  • How much video can your DVR hold? Hard drive space is cheap. You should have at least the last sixty to ninety days of activity. You do record Cashier activity….Right?
  • Do you REALLY know your employees? Does their lifestyle fit their circumstances? Do they live above their means? Are they struggling to survive? I teach this in my live Employee Theft Seminar (in-person or webinar).

Employee theft occurs every day. It happens at your business also, whether or not you see it is up to you. Don’t bury your head in the sand. Be proactive to PREVENT losses. If you need help, contact us. Loss Prevention is what we specialize in!

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Employee Theft Cases: Should You Prosecute Or Not?”

March 30, 2018 by Leave a Comment

 You may be fortunate and have never had to address a problem of an employee stealing from your store. Be in business long enough and chances are you will have to confront the issue one day. As a small or medium-sized retail owner or manager you probably won’t have the benefit of a Loss Prevention Department to investigate suspected dishonest employees. That means it will be up to you or a company such as Loss prevention Systems Inc. which specializes in theft and shortage reduction to identify and catch the thief or thieves. Once you catch the employee who has chosen to steal from your business, be it cash or merchandise, what will you do with him or her?

It seems like it should be an easy question to answer for someone like myself who has spent many years in the Loss Prevention field catching criminals like this. The reality is it is not such a cut and dry question for many people. There are pros and cons as to whether a dishonest employee should be prosecuted when caught. This article is meant to give you the perspective from both sides so that you will be prepared to make an informed decision should the situation ever arise for you.

The pro’s for prosecuting a dishonest employee who has been caught stealing:

  • A clear message is sent to the employee and anyone working in your store that dishonest activity will not be tolerated.
  • It can serve as a deterrent to other employees who may otherwise consider stealing from your store.
  • An employee who is prosecuted and found to be guilty will have a criminal record. If this person attempts to work for any company that conducts pre-employment background checks it is likely their record will be found. It prevents the person from perpetrating crimes against other retailers.
  • A court can order restitution to be paid back to the store. This is not just the amount that was stolen but often includes additional money for the time and effort required of the victim to resolve the issue.

As you can see the list is not extremely long but it does serve practical purposes. But what about the other side of this dilemma?

There is a case that can be made for not terminating an employee who has stolen from their employer. These cons may be something you have not previously considered:

  • The most compelling reason not to prosecute a worker who has been caught stealing is that it does mean they will have a criminal record and this has a direct impact on their ability to gain employment. If you send someone to jail and they struggle to find a new job afterward you may not receive restitution even if the court ordered.
  • The expense associated with prosecuting a case. Having an employee charged with theft means the store owner or manager will have to appear in court to testify against the former worker. There is also the chance that a lawyer for the defendant could request a continuance and then you have to return to court at a later date. Some employers would prefer not having to go through all of the steps required by the judicial system.
  • You may be able to get a promissory note from the person more easily if they know they will not be prosecuted (remember though if a promissory note or restitution is not ordered through a court you may still not see any money).
  • Extenuating circumstances. You may know of recent hardships this employee started going through or have compassion for them because they are a single parent trying to raise their child. In certain instances, the employee has also been a long-time friend or family member.

The decision of whether or not to prosecute an employee you have caught stealing is entirely up to you. There is no right or wrong choice since there are legitimate points of view on both sides of the argument.

A final thought on the subject. If you find you are wavering on the issue of prosecution talk to the prosecutor’s office for your area. You may find that there is a way to prosecute a case and the person can be offered a way to clear their record so they can still seek employment. In some instances, there is something called pre-trial intervention (or an equivalent).  In these cases, a first-time offender pleads guilty and is offered classes and community service. Once complete their record is expunged so that a background check will not find a record. Failure to complete the requirements and the record stays. It is a good alternative to address both sides of the issue.

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Things Not To Overlook For Inventory: Tips For L.P. Managers

March 30, 2018 by Leave a Comment

Sometime this year you will most likely be conducting an inventory. Some stores even conduct multiple inventories when they have high stock shortage results. While it does not necessarily translate to poor results, a lack of adequate preparation can have an impact on the final shortage numbers.  Occasionally, it is easy to overlook things that can cause an unnecessary stock shortage. Here are some things to look at as you prepare for your next store inventory that may prove helpful in obtaining the best possible results:

  • If you have shoplifting or employee theft cases you are prosecuting you need to account for the merchandise. A Loss Prevention Department should have an evidence locker with recovered merchandise in it if a case has not come to trial yet. Some police departments retain the evidence and supply a chain of custody form that lists the merchandise they are holding. Ensure the evidence, in either case, is included in your inventory. It may not seem like a lot but if you are the owner of a small or medium retail business a few hundred dollars here and there can be a big deal.
  • Look underneath and behind fixtures or cases that may have gaps where merchandise can drop. It does not always occur to people to look under register scan belts but small pieces of merchandise can be pulled in as the belt rolls. Items such as greeting cards and jewelry can find their way underneath and will be missed during a count.
  • Check-in desk drawers and in offices for merchandise being used for store purposes. There are at times a need to “store use” merchandise such as pens, trash bags, tape, etc. These should be marked with some type of marker or tag to show that they have been accounted for at some point. If an item is not marked out for store use and is not counted during the inventory process it becomes a shortage.
  • Take a look at the sales floor and if your store uses gondolas and shelving for displaying merchandise, lift up baseplates of the gondolas and look for stray merchandise. If you look closely there is a gap between the base of the gondola and the pegboard wall. Small items can find the way down these nooks and crannies. It should also be noted that shoplifters and dishonest employees will hide merchandise under here on occasion.
  • If your store sells purses, luggage, diaper bags, etc. unzip them and look inside for merchandise that has been concealed. It is not unusual for a shoplifter to hide merchandise inside and get scared away leaving the hidden items behind.
  • If your store sells live units used as displays, be sure they are tagged and ready to be counted. On the flip side of that be sure inactive or non-functional displays are tagged as DNI (Do Not Inventory). These types of displays are often in housewares and may include microwave ovens, blenders, coffee makers, etc. In electronics, it could be a printer, computer, phone and so on.
  • Ensure furniture units that may be sold as two separate pieces are counted properly. For example, a desk may have a hutch attached to it on display but the hutch and desk are two unique sku’s.
  • Check that all case packs are separated appropriately for sale and counting. For example, I work in a store that sells individual binders and 12 pack cases of binders (each of the binders in the case has a barcode but are intended for sale as part of the case). Be sure your merchandise is counted in the appropriate quantity it is to be sold in.
  • Minimize your pre-counts. Some stores will spend an excessive amount of time counting merchandise that they are paying an inventory service to count. These companies are very good at what they do. Have a pre-inventory visit with the representative of the inventory crew and discuss areas that might best be pre-counted but get their input. If they are confident they can count everything allow them to do so. You should be auditing the work on inventory night and catching significant mis-counts.

Hopefully, you have been using Checkpoint equipment to minimize losses due to theft. It is also going to be beneficial to your stock shortage dollars and percent if you have had sound operational plans in place including vendor controls. The last piece to the shortage puzzle is the inventory itself. Follow these suggestions and you can rest easy knowing you have done all you can to improve your chances for a great inventory number for the year.

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