Physical Security Inspections Can Help Impact Sales While Keeping Customers And Employees Safe

Daylight savings time is over and for most of us in the U.S. (yes, there are a few exceptions) we have moved our clocks and groaned at the loss of a precious hour of sleep. We have to adjust and get used to the change and eventually we do. For our personal lives there isn’t a lot of impact, once we are used to it we do benefit from the additional daylight and get to enjoy more outdoor activity. The time change is useful as a reminder for changing batteries in smoke detectors. You may even use it as a point when you will start planning your summer vacations. For business owners daylight savings time can be a reminder that it is time to conduct a store physical security review. Time changes may not impact us much individually but for retailers there is an impact for the building, employees and your customers.

     How does daylight impact your business? With more daylight you may want to take a look at your parking lot lighting. Are the lights on the exterior of the building set to timers? If they are it would be appropriate to set them to the new hours of dusk. Lights turning on too early wastes energy and drives up electric expenses. Having lights come on when it is already dark makes a parking lot feel unsafe and will keep shoppers away from your store. In an article from Buildings.com titled “4 Parking Security Essentials” by Jennie Morton, 11/30/2012, the author states, “Give your lighting a hard look stresses Geary Robinson, parking and transportation services director for Indiana University – Purdue University Indianapolis (IUPUI) and a member of IPI. Dark shadows that can conceal aggressors, reduced visibility for pedestrians and vehicles, and inadequate color rendering all chip away at safety.” The article continues, “Not sure if your parking area has a lighting problem? Look at the behavior of visitors. If people feel compelled to use their headlights in your garage or cars are grouped in your lot closest to light poles, these activities indicate that users may be uncomfortable with the level of darkness.” (Emphasis mine). If lighting is not adequate or if lamps are out, this is the perfect time to get them replaced. If you lease your property a call to your property management company is in order to get lights repaired or replaced.

     Since we are talking about a thorough physical security review of the building I would recommend testing fire exit push bars. Are they alarming properly? Do the doors open easily? I once had a set of fire doors that would not close properly after testing the push bar and we could not reset the alarm. What if the opposite had been the problem? What would have happened had the doors not opened properly in an emergency situation? You cannot assume that systems will work simply because you want it to be so. While you are at the fire doors, check the fire exit lights, make sure they are lit. This can be difficult with some lights. While they may seem dim to you, some are designed this way. Ask the fire department to come to the store and test the lights to ensure they meet code requirements. By auditing and testing you identify potential issues and get them repaired so you can depend on them in the event you need them. You could also avoid hefty fines for safety violations in case of an inspection by the Fire Marshall.

      Include testing of your burglary and fire alarm systems at this time. Your alarm system company should be able to walk you through a test of the burglary alarm system. Testing door alarm points and any motion sensors your store may have. You may also need to do a break glass test to be sure your system will pick up front door and window glass breaks. Fire alarm tests and sprinkler riser tests can be conducted through a third party vendor. You don’t need to be the expert in how to conduct the tests, just be sure to get them done.

     Many people associate spring with a fresh start. Give your business a fresh start annually, use this time of the year as a reminder to check your safety measures. Keep your customers and employees safe while protecting your business from unnecessary fines or lawsuits.


Spring Cleaning Should Include A Review Of Evidence Held For Shoplifting And Employee Theft Cases

When I was a Loss Prevention Manager we would catch a shoplifter or a dishonest employee and recover merchandise. Depending on the type of case we would sometimes hold the evidence for a few days until the court hearing other times it could be much longer. If a shoplifter refused to plead guilty or requested a jury trial cases could be held up for months if not longer. I had several cases that went on for more than a year. Felony shoplifting cases and juvenile cases in our jurisdiction often meant lengthy wait periods depending on caseloads in the court. I also recall at least one shoplifting case in which the lawyer for the defendant requested extensions three separate times hoping that I would not appear for the hearing and the case would be dropped. No dice, I showed up for each hearing and finally the lawyer entered a guilty plea. The problem with the lengthy cases was that we would have to hold the evidence until the cases were settled. In some situations the police department held the recovered merchandise, such as when they stopped the suspect after the suspect fled the store. When merchandise has to be held for long periods it is possible for it to sit in evidence and be forgotten about. For stores that are too small to have security or Loss Prevention Departments management may be storing that evidence and no one is thinking about following up on cases with their police department or court.

     Spring is the perfect time to look through cases and see if there is merchandise that can be returned to inventory. Before you just go in and start looking through evidence closets or lockers that you may have in your store take some things into consideration. Just as police have chains of custody, a store should have a similar program in place. No one should be able to open a security cabinet and start digging through it. A proper evidence locker will have a listing of evidence that is associated with a case number, date and suspect(s) name. This enables the store to track the progress of a case. It also gives reference information so that a call to the Clerk of Court can help their employees find the status of a case. When the locker is opened, there should be a signature sheet with a date and time entry showing when it was accessed. There should also be an evidence release form in the event police have to take custody of property (be aware that they will have their own chain of custody form for you to sign too).

     Why is it so important to go through and review for evidence that can be cleaned out? From an inventory standpoint the product could be losing value. I did have merchandise sit in my evidence locker and some SKU’s went clearance as the merchandise had to be held while the case was in limbo. In a few instances merchandise completely dropped from the books and I had to take financial sheets and account for the products. Occasionally police would come by with merchandise from cases I had forgotten about and let me know that they were cleaning out their evidence lockers and a case had been dismissed or adjudicated without any follow up with our store. Again, this was infrequent as most cases were disposed of with me present or a call from the Clerk of Court letting me know the defendant had entered a guilty plea. Our store was large enough that we could absorb some of these lost markdowns or the items dropped from the system without making a major impact on our stock shortage. For smaller stores this could be problematic. Every dollar and piece of merchandise should be accounted for whenever possible at inventory time. The lower the annual sales the more impact each lost or uncounted piece of merchandise has on overall shortage.

     What is the solution to potential losses because merchandise is in evidence? Use spring as the time to review what you may have in your evidence locker from shoplifting and employee theft cases. If there are cases that have been sitting for a month or more, place a call to the court that is responsible for the case and ask about the status. If it has been closed on their end you should be able to release the goods back to the store. If it is still awaiting trial or disposition continue holding it in evidence. One final piece of advice, some jurisdictions will permit photos of evidence to suffice for court. Contact your local police department or court to find out their rules and guidelines.


THE IMPOSSIBLE ACT OF “SELLING YOUR WAY OUT OF SHRINK”

I recently read over an article opining the phrase “sales cures shrink”. While the author touched on both sides of the coin, I found it interesting that in today’s retail climate, anyone would think that you can simply sell your way out of losses. Let’s cut to the chase here; we’re not bringing in 20% increases over last year, hell we’re lucky to come in flat to last year. Online giants like Amazon are eating up market share like never before and if brick and mortar don’t do something fast, sales will continue to slump.

Let’s break this down a bit further. Let’s say your shrink last year was 2% to your sales of $1,000,000. That’s a loss of $20,000 for the year, or about $57 a day. Taking that shrink number and dividing that into your loss per day gets you right at $2680. That means you have to sell an additional $2,680 on top of that $57 loss just to get to the break-even point. Understand this, you CANNOT stay in business if all you’re doing is breaking even. You just can’t. You need to turn a profit!

Being a realist here, there is no way that you’re ever going to sell your way out of shrink. EVER. It is a flawed philosophy and if you ever hear someone utter this crummy phrase, understand that whomever that person is, they have no idea what they are talking about. Unless you have some miracle business model and you’re bringing in money hand over fist, then “selling your way out of shrink” just isn’t an option. It’s a start…

Offsetting shrink takes a multi-faceted approach. Just as you can’t sell your way out of shrink, you can’t very well keep everything under lock and key, and it’s impractical to have the security devices on every single sku. If you’re trying to increase sales, you may be inclined to have more displays of merchandise. Copious amounts of data show that a customer is more likely to make a high dollar purchase if they have a chance to touch and feel the item. (Think sunglasses, hunting scopes, sports equipment, etc.) To sell it, they have to be able to touch it. For you not to lose it, you need to secure it in some manner. Once you find the balance of sales vs. LP procedure, you’ll find the winning formula for shrink reduction.

Proper security measures will only go so far to stop external losses. Internal theft accounts for an even bigger percentage of losses inside your store. Knowing who to hire, and whom you are hiring are both vital spokes in the retail wheel of shrink reduction. You need to go a step further and encourage a culture of honesty, integrity and ethics in your store. Employees should feel invested in your business, as that emotional attachment will likely deter an employee from stealing.

As with any problem, there are always a multitude of solutions to bring about positive change. Get away from a soloed approach to shrink and look at all the ways your losses may be tackled. Just as you would be foolish to believe that locking up all of your merchandise would stop theft, you’re of equal foolishness if you believe that sales are the cure all for shrink; and I personally, pity the fool.


FINDING PROACTIVE WAYS TO PREVENT VENDOR FRUAD

You know, I’ve talked a LOT about how to prevent employee theft, but one thing I don’t believe I’ve ever talked about is how to stop vendor theft. Depending on your business, you probably have hundreds of different vendors that supply you with inventory. In addition, there’s also a good chance that you have vendor reps in on a weekly basis. While I don’t know your specific set-up, I can give you some examples from my tenure in the LP field on ways that vendors steal from you (whether on purpose, or not) and ways to protect your business.

Verify shipping contents!

If you’re a multi-store location, you may have a centralized warehouse, but if you only have one store, chances are, you’re getting shipments in from a carrier daily. Reputable vendors will never short change you on purpose, but humans are the ones processing every order, so it’s always important to match those manifests up with what you actually received. Any discrepancies should always be reported to the vendor.

I’ve seen once or twice where a small vendor, specializing in maybe a handful of items was purposefully shorting orders. This happened to me a while ago with a line of shirts. Every time we received a shipment, it would be a case short. Eventually we found out they were doing this to every single customer they had in an attempt to raise capital. It backfired and they went bankrupt in the end.

Check the invoice

Did you call a plumber out to fix a leaky toilet? How about the A/C guy to cool things off? Again, 95% of vendors aren’t scamming you on purpose, but billing mistakes do happen. If you’re not vigilant about what you’re signing off on, it could cost you extra money that eats away at your bottom line. Then again, there’s that 5% that may be adding those extra “services” because they know that a check is just blindly written. Always make sure you know exactly what you are paying for!

Vendor Representatives

At least once a week, I have a rep in my stores. Sometimes they come in to merchandise a new fixture, other times, they come to maintain a dedicated area of the store that their product is in, and other times, they come out to do product demos. I had a rep once steal about $1,000 in product from me. She claimed that she needed to remove about several articles of clothing for a vendor “recall”. My manager didn’t think twice about it and she strolled out with a ton of clothes. We discovered a day or two later that she was recently terminated and at the time of the theft, no longer worked for the vendor. Moral of the story, if any of your vendors want to remove product from your store, you should be on the phone with their office to verify.


Ask A Trusted Friend To Look At How You Conduct Inventory And Receiving Processes; You Could Improve Profitability

It is human nature, we have a way we do things, we get comfortable and someone comes along with a suggestion and we get defensive. We think to ourselves, “My way works, why change it?” When asked why we do something the way we do, we may resort to using the old, “Because we’ve always done it this way” excuse to answer an inquiry. On occasion we may not want to try something new because it involves new technology we may not be familiar with. I remember when (no laughing) Loss Prevention moved from recording on VHS tape recorders to digital recording. New technology does not come easy to me and I had to learn how to use it or get passed by. In the long run, it was a better method of storing video overall. We could search transactions more easily for suspected employee passing incidents or cash theft.  We could narrow searching to specific times and we could create recording “zones”. Recording only activated when someone walked into the “zone” we were concerned with due to missing merchandise. Electronic Article Surveillance anti-theft devices became more prevalent with new and improved capabilities. Learning to trust the technology to prevent shoplifting and allow stores to take more merchandise out of lock-up cases and put them on store shelves for customer access was a difficult transition for an old school Loss Prevention Manager. In the long run these changes were for the better. We improved time management with digital recording and closed investigations faster. EAS freed up the time to unlock showcases and drove sales with increased customer access to merchandise.

      The truth is, often there is a better way to do things either because it is more cost efficient, it can save time or it is more accurate. One way to determine if there are areas for improvement for your inventory and receiving processes is to ask a trusted friend to go through and review how your store operates. The friend does not have to be an expert in receiving best practices, per se, but they should be good at evaluating how something is done and being able to ask, “Why?” and saying, “What if?” A friend will also have your trust and be able to be brutally honest with you about deficiencies in how you are doing something. You have to be prepared to take critiques and suggestions and not personalize them.

     What are some things you may seek to have evaluated in regard to receiving or inventory practices?

  • How frequently are vendors giving you credit on product that is not selling.
  • Some vendors such as cosmetic and jewelry vendors come in with laptop bags, purses boxes, etc. Do you inspect these for hidden merchandise before they leave your building?
  • Do you react to an EAS alarm for a vendor the same way you do for a shoplifter?
  • How much space in a stockroom is a vendor taking up with their products and can it be reduced?
  • How often is your store serviced by your vendors?
  • Have your product delivery evaluated? Is the store processing the merchandise and getting it to the floor in a timely and efficient manner?
  • Is product protected with EAS tags and anti-theft devices when it arrives to the store or after it is stocked on the sales floor?
  • How do you have your stockroom organized and how easy is it to locate merchandise to get it to the sales floor?
  • For inventory does your store count the merchandise and report it or do you bring in a professional inventory service?
  • How do you prep your store for inventory, especially your stockroom areas? Do you keep your stockroom inventory-ready all year or do you scramble to make it “countable”?
  • If you use a professional inventory service, do you still do a significant number of pre-counts or do you let the inventory company do what they are hired to do and can do better?

These are just a few suggestions that an evaluation of your procedures should include. The benefit to you may be that there are things that you can implement or change that will save payroll, increase productivity, improve efficiency and ultimately improve profitability.


     

     

How Do You Handle Returns, Refunds, Voids: Is It Easy For Someone To Steal Money? Now Is A Good Time To Review Your Procedures.

If you were asked what area of your store would present the most opportunity for employee theft and fraud, what would you answer? The checkout lanes where cashiers have access to the register, the ability to pass merchandise,  or steal gift cards and credit cards? At the register cashiers also have access to electronic article surveillance (EAS) detachment tools and deactivation pads. It is easy enough for them to “unprotect” merchandise and walk it out of the store undetected. Perhaps the sales floor, where employees can take merchandise and conceal it  in the boxes of other merchandise then return and purchase it later (box stuffing)? On the sales floor they have the ability to conceal merchandise under clothing or wear clothing belonging to the store and walk out during a “break” without paying for it.  Maybe the stockroom staff has the most opportunity to steal since they generally have little direct supervision and have plenty of hiding spaces to conceal empty packages if they take something not protected with EAS tags or devices. One area that could be overlooked and can be a source of a significant amount of undetected theft and fraud is the return desk.

     What can happen at the return desk that makes it a vulnerable point for employee theft? Cash theft, merchandise theft, return fraud, gift card fraud or any combination of these can take place here.  When a customer returns merchandise with a receipt is the cashier giving the original receipt back to the customer along with the new receipt?  What do you do with items that have been returned? Is there a central location for keeping returns until they can be processed? Is there a procedure in place for getting returned merchandise protected with electronic article surveillance tags and anti-theft devices shortly after the return takes place? If you haven’t thought about the ramifications of not having adequate procedures in place, then this list will provide you with some reasons evaluate your processes and options for improving controls:

  • If a return is done, the item returned should be circled on the original receipt and the slip for the completed return attached and handed back to the customer. Return desk employees who keep receipts may be fraudulently refunding other items from the receipt that were not really returned. They then remove that amount of cash from the register and keep it.
  • Do you audit the merchandise at the return desk? You should be able to review each item and verify it was returned and when. You could find that a dishonest employee is stealing returned merchandise that was not damaged. If there is no auditing, there is little chance the employee will be caught engaging in theft.
  • If a piece of merchandise is returned and the same item is protected with an anti-theft device on the sales floor, is that merchandise being processed and secured right away? Failing to immediately secure merchandise with EAS protection could be an indicator an employee intends to steal it.
  • Is the service desk area neat, organized and set up so everything has a place? Or is the return area cluttered and unorganized with random merchandise laying all over the counters, in storage bins and on the floor? If so, there is greater opportunity for employees to hide merchandise they would like to steal. If there is no organization it becomes very difficult to determine what should be behind the desk and what shouldn’t be.
  • Do you monitor for excessive line voids from your cashiers, including the return desk associate? Employees who void multiple items during sales transactions may be passing merchandise to friends or family members.
  • Inspect boxed and packaged merchandise returns. Open the package to be sure the proper merchandise is inside. Some thieves will put in the wrong item to defraud the store. Also look at shrink wrapped merchandise being returned. There are criminals that will take the time to change out the merchandise in the box for a rock or item with a similar weight and then shrink wrap the package. It looks like it was not opened, but often a close inspection will reveal an edge or a corner that does not appear to be manufacturer issued…open it up!
  • Are return desk employees assigned their own register till? Multiple cashiers working on a register makes it difficult to identify the source of a cash shortage.

The return desk can be a tricky area to control and can be the location where shortage, theft and fraud can run rampant. Take the time to review your procedures and be sure you are doing all you can to deter criminal activity.


Protecting Your Business From Theft…Are You Doing Enough?

The retail industry has been facing many changes for the last few years.  And although the nay sayers believe Amazon will eventually destroyed the retail industry, some experts believe the retail shops are  here to stay.

The issues that are affecting the retail industry are numerous though. Shoplifting and employee theft are costing the industry millions of dollars every day. Under-staffed stores, poor customer service and poorly trained employees, are bigger issues for the retail industry than Amazon is.

For more about this and other stories, follow the links below.


Are shoplifters getting it too easy?

Shoppers blissfully ignored a sign that only four garments could be taken into a department store dressing room. With armfuls of clothes and bags from other stores, customers entered and exited the fitting area, without supervision. It was a shoplifter’s paradise.

Two shop attendants frantically organised returns and refunds in a holiday-sale blur. Nobody enforced the dressing room policy, which is designed to reduce shoplifting risks, or watched customers to ensure goods were returned.

Whatever happened to department stores having a specialist assistant who manages the fitting rooms and is paid out of the security budget?

Visible signs of extra security – or much security at all, for that matter – were hard to find at this store. The main exit did not have a uniformed security guard. The handful of staff on the floor made no obvious effort to watch for thieves.


Protect your profits

Garden center owners share their stories of recovery and new strategies after thefts and break-ins. J.R. Pandy, a retailer in Ohio, explains how he’s continuing to fight for his business.

For as long as J.R. Pandy can remember, he’s been involved with the day-to-day operations of Pandy’s Garden Center in Elyria, Ohio, a business his parents founded around 1961.

“I think I was born here,” Pandy says of the grower/retailer he’s worked at since he was 12 years old.

Unfortunately, Pandy can also scarcely remember a time his family business wasn’t victimized by burglars, thieves, arsonists and other intruders and criminals. He says the garden center has been broken into and stolen from so many times throughout the years that the individual incidents tend to run together.

“I can’t even fathom to count that many times,” Pandy says. “It’s just an old hat — ‘Hey, we’ve been broken into, oh, great.’”

One of the most costly and recent burglaries at Pandy’s Garden Center came in May of 2015, when thieves entered the store grounds at night and made off with tools, trees, bulbs and other green goods. The thieves even took the store’s van, which was hotwired and driven off the premises.


Are You Doing Enough to Secure Your Stores?

Theft and robbery continue to rise, but new technology and planning can deter.

NATIONAL REPORT — Whether it’s violent crime, robberies, shoplifting or employee theft, convenience stores have been dealing with store security issues for years. New technology is allowing operators to amp up prevention and react faster to incidents, but in many cases — in c-stores and the entire retail industry — the situation continues to worsen.

“I’ve been involved in the convenience store industry for 40-plus years and the risk of loss has not changed. The most worrisome is robbery, and as c-stores evolved into 24 hours, the violence level increased,” Chris McGoey of McGoey Security Consulting told Convenience Store News.

Robberies are up all-around, specifically in convenience stores, as the latest released FBI statistics show robbery up 16.8 percent in c-stores/gas stations from 2014 to 2015. Rosemary Erickson, researcher, forensic sociologist and president of Athena Research Corp., based in Sioux Falls, S.D., says this is the largest increase she can remember in all the years she has been studying crime. Erickson has helped NACS, the Association for Convenience & Fuel Retailing, develop many of its security resources.


 

Tips To Secure Your Home And Family

This magazine is dedicated to helping you, the business owner/manager secure your business from threats to your bottom line. However, since the holidays are over, I want to help you with some tips to secure your home and family. I live, eat and breathe this kind of stuff. It is another of my long term experiences.

We tend to look for solutions from technology but in many cases we need to get back to basics. Here are a few quick items to review:

Light-When someone is looking to do no good to your property, they feel more secure if it looks like no one is home. The key is to confuse them and make them feel unsure. Remember, most burglars are lazy. If they are not sure about your house, they will move on. So you should have at least two light timers (three is better) set up and running seven days a week. These should be in different areas of the home and should come on and off at different times. Use the random or security feature found on most timers. This will vary the on/off time every day just a little in case someone is watching the house for a pattern.

This also has another benefit. It is an elegant look for a home. It also is convenient. For example, if you have a small table lamp in your foyer or stairway, you can have that lamp come on in the evenings until past the time you go to bed normally. The light does not need to be really bright. Maybe just a 40 watt bulb. Or use an LED bulb in these lamps instead. Your energy consumption will be almost nothing in the overall picture.

Sound-You may want to hook a timer up to a TV or Radio. A TV’s changing screen/light and sound will cause someone that is outside your home and maybe close enough to hear to have pause. This works best if the window coverings are closed or it is on the second floor. You may not want this option on all the time but it is a great idea for when you are on vacation or gone for a few days.

Mail/Newspaper/Flyers/Trash cans left at the curb-NOTHING says “I am not home” like these accumulating. Have a neighbor pick them up or put them away DAILY.

Safe-Mount a small in-wall-safe in the master bedroom closet behind your hanging clothes and below shoulder level. You can pick up a good little safe for around $100. These safes are mounted between two studs. They only require that you cut the sheet rock (usually a paper template is supplied) and screw the side into the studs on both sides. This allows you to keep cash, jewelry and more, secured and very well hidden.

Water-This really does not have anything to do with security. But if you are going to be gone for a few days or more, shut off the water supply to all toilets, sinks, washing machines and outside faucets (if possible). The average washing machine hose has a life span of five years. You really do not want to come home to a flooded house and an astronomically high water bill.

Alarm Systems-On the higher tech side a basic home alarm system is a great investment. When you have a system, you should cover every outside door and the door from the garage to the inside of the house. Install several motion detectors in areas such as hallways. You do not need to overdo it. What you are trying to do is create a trap effect. The bad guy should not be able to move very far without tripping a motion detector.

Basic alarm monitoring for your home system should be no more than $19/month. If it is more, you should shop around.

I strongly suggest that you have your alarm control send its signals to the Central Station via cellular not over wired phone lines or the internet. Most troubles with an alarm system are usually as a result of wired phone line problems. Cellular (GSM) resolves most of that. Also there is no wire for the burglar to cut. There will be an added monthly cost for monitoring for GSM (cellular).

Newer alarm controls have the ability to be connected to your PC or hand held smart device. This can only happen if your alarm control is connected with GSM (cellular). This is a very nice feature. It allows you to do almost anything remotely that you can do at the alarm keypad in your home. Arm/disarm, bypass….. This feature will also add to your monthly cost.

Cameras-Several cameras mounted around the outside of your home give you the ability to check in via your PC or smart device at any time. This used to be costly with traditional CCTV systems. Now you can put up Wi-Fi cameras that have long life batteries by yourself for a very reasonable cost. Shop around for quality units. A few things to consider when purchasing:

  • Battery life should be measured in years. You do not want to be on a ladder any more than necessary.
  • Is there a battery low indicator that will be emailed to you? The last thing you need is a dead camera when you need it the most.
  • Get cameras that have Infra-Red (IR) illuminators. This allows you to see in total darkness.
  • Be realistic on what you want to see. No camera is as good as the human eye. Two cameras may be needed to see what you want to see in one area.

Suggestions On How To Improve Inventory

Each year retailers take inventory of their merchandise, counting what they have in the store, reconciling that information against sales receipts, vendor credits and receipts and markdowns.  Usually the result is some amount of shortage or merchandise shrink due to merchandise that cannot be accounted for and losses due to certain markdowns and damaged products.  I have in rare instances seen overages, but those are usually the result of offsets from prior year shortages often attributed to paperwork errors.  The store objective each year should be to improve upon the prior year inventory result.  Certainly the best case would be to have zero dollar shortages every year, but that is not a realistic expectation. I try to explain to employees that if one package of gum were to be stolen during the year, you have incurred shortage. There are steps a store owner or manager can take to work towards that yearly improvement and shoot for a zero dollar shrinkage year.

 The first step to improve inventory is to look at merchandise protection strategies in the store.  Are retail anti-theft devices being used to prevent shoplifting as well as employee and vendor theft?  A theft prevention system includes having an electronic article surveillance (EAS) system installed.  This would encompass EAS antennas at entry/exit points, EAS soft tags, labels and hard tags on as many pieces of merchandise as possible and deactivation pads and detachment tools at checkout lanes. By protecting merchandise with retail anti-theft devices, shoplifters and potential dishonest employees are deterred from trying to steal.  EAS protected merchandise also activates alarms if a shopper forgets about an item on the bottom of the shopping cart that has not been paid for and a tag is not removed or deactivated.  Remember, if merchandise hasn’t been paid for, regardless of the intention of the customer, it is shortage.

There are other things that a store can do to improve inventory results from one year to the next:

  • Consider offering incentives to employees who deter a theft through great customer service.  Employees on the sales-floor are your first line of defense against shoplifting.  If they are walking their areas offering assistance, they will walk upon a customer attempting to conceal merchandise, remove items from packaging or tamper with EAS tags.  Offering assistance, remaining in the area and communicating with managers is an effective method of deterrence without accusing someone of stealing. An incentive for reporting this type of activity may be the purchase of a drink or putting the employee in for a weekly or monthly drawing for a $5 gift card.  Be creative.
  • Education/Training – Make sure employees know what your inventory results are and how much was lost in the last inventory.  I always made it a point to share that information and celebrate it when we had good results.  Let your employees know that they make a difference.  Employees also need to know how to properly respond to EAS alarms and recover merchandise without making accusations.  When training is not continuous employees become complacent and begin to wave people out the door who set off an EAS alarm.  Eventually that complacency turns to ignoring the alarms altogether and the system is rendered useless.  Alarm activations also need to be recorded so managers can review for trends and ensure there are no malfunctions.
  • Make employee receipt checks and bag checks mandatory for EVERYONE.  Managers should be the first to show their purchases to an employee for verification.  When employees see that no one is exempt, they will not mind doing it themselves.  Accountability helps prevent theft.
  • Have a program in place for marking merchandise that is purchased for store use.  If  you have to get a pack of pens from your sales-floor for office use, purchase it or account for it through a ledger and then keep the package and mark it with a date and write “store use” or put a sticker on it.  It is easy for merchandise to start being used and not accounted for and it will accumulate in offices from the sales-floor.  Account for EVERYTHING, even a paperclip if it is store use.
  • Small, independent stores may not have corporate markdowns sent to them.  These stores need to evaluate their merchandise and if it isn’t selling, mark them down, but do it incrementally.  Start at 10 or 15% and see if you can move it.  You don’t want to lose profit margin.

Improving inventory is not an impossible task.  Utilize EAS technology to deter and prevent theft.  Educate and train employees and empower them with knowledge on shortage issues and how they impact it.  Profit from reduced shrinkage! 


      

In An Economy Predicted To Improve Here Are Some Things You Can Anticipate

After a long and contested election cycle, a new president will be inaugurated and with this result, some experts are predicting the economy will begin to improve significantly.  If the rebound is as strong as these experts are predicting retailers will be one of the beneficiaries, with an increase in customers and sales.  Likewise there may also be more shoplifting activity that takes place.  An increase in sales would seem to make sense given that there would be more people with jobs and potentially more money in their pockets, but why would there be an increase in shoplifting?  There are a couple of possible explanations, for example during those periods when the economy is slumping retailers tend to order less merchandise.  The result is shelves may stay empty longer or there may be fewer high ticket goods available for criminals to steal.  Less product displayed can translate to less opportunity and opportunity is one of the necessities for a theft to take place.  There is also the chance that with fewer customers in a store, employees are more readily available to offer customer service to shoppers and this is certainly a deterrent to shoplifters.  One of the first recommendations I always make for improved shortage results is for a store to focus on customer service.

Along with increased sales and the potential for more shoplifting, what are some other things you can anticipate with an improving economy?  You may find you are in need of more employees to help in your store.  Cash stands that may not have been very active could start to see new life as lines begin to increase.  Customers don’t want to wait for service so it is important to have enough staff to meet the demand.  Sales floor coverage will likely be stretched thin again impacting shopper perception of wait time.  Hiring could be crucial and in an improved economy you could be fighting for talent.  Don’t settle on a warm body, ensure you conduct pre-employment screenings so you can be confident that the person you hire is the right fit for your team and has no hidden skeletons in the closet.

An improving economy means more transactions and that means cash registers have more money in them and credit card swipes.  Make sure credit cards are the only thing being swiped and then only during the customer transaction.  More cash in a register is a tempting target to an employee who may be experiencing a personal financial crisis.  Make sure your front end or cashier supervisors are doing random cash drops at the registers, taking most of the money and leaving enough in to continue ringing sales.  Watch for cashiers who may be tempted to swipe a credit card and forget to hand it back to the customer.  If you see credit cards lying beside a register, question where it came from and pick it up and retain it in a lost and found.

Anticipate the need to replenish shelves more quickly.  During slow economic times merchandise doesn’t always sell quickly and so filling empty spaces on shelves and fixtures may have been able to wait until the next truck load of freight arrived.  If sales improve as predicted it is important to have plans in place to address “holes” more quickly.  Prepare to monitor for out of stocks during the day and get it refilled from your stockroom quickly.  If you are selling a lot of vendor supplied product, such as soft drinks, bread, cereals and snacks, etc., partner with your vendor representatives to increase deliveries and representative visits.

If you require an increase in floor replenishment, don’t forget to protect product with retail anti-theft devices before it gets to the selling floor.  Remember I mentioned there could be increased shoplifting with an improving economy.  It is easy to overlook the protection of merchandise as it flows from the stockroom.  I should note that I would prefer to see merchandise protected as it arrives to the store, but some stores do wait until it gets sent to the sales-floor before applying Checkpoint tags and labels.

The potential for growth in sales is exciting for retailers.  Don’t miss the boat by not being prepared for it.  Have a plan to meet the needs of an expanding customer base. Be ready to fill your sales-floor and don’t forget to prevent shoplifting by protecting your merchandise before it gets to the floor.  Going green will take on a whole new meaning in the coming years!