ASB Magazine

As much as we all hate it, the losses caused by theft and fraud are a cost of doing business.

V

alentine’s Day in this industry can sneak up quickly. Failure to plan accordingly, especially on the part of your Loss Prevention department, can hurt your company. To maximize your profits and minimize your losses, a strong Loss Prevention plan is important to ensure that what you make in the front door is not slipping out your back door.

We all know that theft and fraud hurts our business’, but before we delve into some strategies to prepare for one of the busiest times of the year, here’s some statistics about how much of a financial impact theft and fraud affected 13, 313 retail stores, which totaled $519 billion in retail sales, in 2005:

• Internal (employees) and external (shoplift-ers) stole $5.8 billion from these retailers in 2005.
• Of that $5.8 billion in theft, only $127 mil-lion was recovered.
• The average prosecuted shoplifting case was for $126.87.
• Based on 1.8 million employees, one out of every 26 was actually apprehended for theft from their employer.
• The average prosecuted dishonest em ployee case was for $724.15.

These are staggering statistics. The old Loss Prevention adage of "Shoplifters steal your product, but employee’s steal your business" is defi nitely true. Unlike traditional retailers, most adult stores do not have dedicated loss prevention personnel for every store. With these statistics in mind, and the fact that our industry is not as saturated with loss prevention, it seems we are riding a smal boat against a tidal wave.

Here are a few tips to assist you as you gear up for Valentine’s Day:

1. Don’t wait to create an employee culture and work environment that is un-friendly to shoplifters. Studies show that 90% of shoplifters will leave a store if they are greeted when they enter and greeted at least once when on the sales floor. The best rule to make your store friendly to customers and unfriendly to shoplifters is that your employees give a general greet-ing when a customer enters the building. Once this is done they should give a per-sonal greeting to every customer on the sales fl oor at the minimum once every ten minutes.

2. Analyze your losses and expect them to double during the busy season. If you are losing videos and you have security cases, figure out how the thieves are stealing the videos and then make it more difficult for them to do so. We have taken our DVD cases and reversed their direction in the security cases, making what was once an easy steal to a difficult, obvious movement to pull out a disc. If thieves are opening boxes, staple the boxes shut or purchase security hooks to hang your boxes on. Think like a thief and learn from your losses.

3. Watch out for scams! Quick-change scam artists, fake credit cards that require an imprint instead of a swipe, counterfeit bills, etc., can hurt your business. When it’s the busy season, expect these people to come out to hit you while your employ-ees are busy and distracted.

4. Get your EAS system serviced prior to the holiday. Train your employees on proper response to EAS alarms and always make sure they check the items in the bag against the receipt the customer has.

5. While I know it is not always popular to talk to your competitors, having good communication between loss preven-tion departments in our industry assists everyone involved. Most of the time, the person stealing from you is stealing from your competitor and communication about this can help stop a person that you never know is stealing from you, and vice versa.

EMPLOYEE THEFT

1. The first step to stopping employee theft is hiring the right people. If you are staffi ng up for Valentine’s Day, ask the hard questions: "Have you ever stolen from an employer?" "What would you do if you saw another employee steal?" Run a criminal background check at the local police offi ce and check their references and previous employment. You’ll be surprised by what you fi nd.

2. The second part of stopping employee theft is policy and guidelines that make it diffi cult for them to steal, and if they violate your policy, it’s obvious. Think of the ways you know employees steal, and gear your policies around these methods of theft.

3. Treat your employees well during the busy seasons. Most employee theft is because they feel either underpaid or under appreciated. Incentive programs, small commission, etc., drive sales and may mean the deciding factor when an employ-ee is looking at a toy they can easily steal because they are alone.

4. Keep on top of your daily sales num-bers, shortages, overages, employee bag checks, etc. Look for patterns in regards to who is working. If you are short an amount one day, and two days later you are over that amount, and this happens repeatedly, there is a pattern to look into. Review video and address issues immediately. Business owners unfamiliar with case building and investigations should never sit on a ques-tionable situation and wait to see how it develops. Jump on issues immediately and forcefully.

GENERAL RULES

1. Get a good CCTV/camera system and keep it serviced and running correctly. Keep a monitor at the front for your employees to be able to watch to deter shoplifters. If you have the money, invest in a DVR which is remote viewable so you can watch the store from home. You would be surprised by what you see.

2. The police and district attorney can become your best friend. Build a good relationship with the local police...take them food for their shifts, make a donation, build a relationship with the investigators who work theft and fraud. Treat them well and the police can give you tips and advice and can help apprehend shoplifters. Talk to your district attorney about civil recovery when you apprehend a shoplifter or a dishonest employee and make sure you can recover your losses.

3. Offer rewards to your employees for helping stop theft and fraud. Offer a reward if they catch a shoplifter or tip you off on a dishonest employee. The reward can be cash, or a gift card, or some promotional product. Your employees are in your stores every day and they are your eyes and ears...treat them as such.

4. Watch your vendors and your receiv ing. While vendor fraud accounts for a small percentage of losses in retail, it is still an area where you can lose money. Always make sure you stay on top of comparing what’s in the box to what’s on the invoice and address issues with your vendors im-mediately.

As much as we all hate it, the losses caused by theft and fraud are a cost of doing business. You can’t con trol everyone who works for you and who shops in your stores, but you can set controls in place that limit the damage they can do to your business. Remember, the safety and security of your building, staff, and custom ers is more important than any product you own, so stay safe during the Valentine’s Day push.