photo credit: FABIOLA MEDEIROS- direção de arte

To me, time theft is unquestionably theft, and it absolutely causes a loss to the company when an employee sits around in the employee lounge while “clocked in”. Even worse, I consider it time theft when an employee is supposed to be servicing customers, but is instead nowhere to be found. 

Time theft can be hard to prove, but admissions go a long way, so a few instances on video plus a written statement after a good interview usually do the trick. It’s hard to deny the loss, and if the employee admits to intentionally getting paid for “not working”, then the case seems pretty solid to me. 

Simply put, the employee causes a loss to the company by getting paid for time when they were not working. So, read the article here, and then let’s talk about it. Should these be cases of dishonesty? Or, are they behavioral issues that should be dealt with from a corrective action standpoint?

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Awareness, training, accountability; these three are still the keys to reducing incidents, and to catching internal theft early. Many companies are increasing their audit cadence this year so that issues can, hopefully, be identified earlier. Inspecting what we expect has always been a key to success in shrink reduction, but it is much more crucial today.

We face an up-hill battle against shrink, and we have to fight a tougher fight with fewer troops this year. Less eyes in the stores means more opportunities for theft.

Employees who feel the pressures of this down economy, including reduced payroll and benefits, are much more likely to steal from their employers. These thefts can range anywhere from simple time theft to multi-thousand dollar embezzlements. Loss Prevention MUST, not only expect this, but get out in front of this issue and be proactive in efforts to discourage disgruntled employees from causing a “bad to worse” scenario for retailers.

As always, comments are welcome

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In other words, are you in crisis mode? If you are in loss prevention, what are you seeing? Are you becoming more concerned with internal theft? Are you seeing an increase in external theft? Are your awareness and protection programs being dropped by the wayside because they cost too much time and money?

I’m not convinced that we are in Crisis as an industry yet, but I can see us getting there soon, if things don’t change. Do you agree? Disagree? Let’s talk about this…

photo credit: kryst£n

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With retailers looking to cut costs, loss prevention programs can be viewed as non-essential, and therefore be either cut back or altogether cut from the budget. Retailers are looking to save money where ever possible, and loss prevention is in a position to either show real savings through shrink reduction or face cutbacks in many cases.

One would think that the increase in criminal activity against retailers would secure a position for loss prevention professionals at every retailer, but this may not be the case.

SecurityInfoWatch.com posted an article by Mark Doyle of Jack Hayes, Intl today that summarizes the latest Annual Retail Theft Survey. Not surprisingly, the survey found that overall apprehensions were up 10.8% over 2006, and recoveries were up 9.73%. What was surprising was that the average case value was actually slightly down, at -0.33%.

According to a survey conduct by Aberdeen Research back in October 07, 60% of retailers reported shrink of 1.75% or more for that year. And friends, that’s where the real bang for the buck exists. Having an increase in cases is great, and indeed does help to reduce shrink. But if the shrink percent is high, then something is not working.

This same survey also found that retailers see four major challenges when it comes to their shrink reduction strategies. They are listed below in order of importance:

1. Lack of Employee Training On Loss Prevention Procedures
2. High Incidence of Internal Theft
3. Store Location Demographics (Crime Rates, etc.)
4. Organized Retail Crime

You’ll notice that the top challenge or concern is training. If associate awareness is low, shrink will be high. Loss Prevention must go beyond the weekly meetings and become intimately involved in the LP training in stores. That means one on one, personal training of key employees who will pass along the information and help to build a culture of awareness.

Next on the list is Internal Theft. Since 40 – 50% of shrink is attributed to employee theft or fraud, it only makes sense to put the investigative focus in this area. Shoplifters are a problem, but not THE problem in most locations. The biggest issue employers face when it comes to losses is the fact that up to 30% of their employees are stealing from them at any given time.

Store location issues are a tough problem. I recommend regular risk assessments. That means going to the local police department and requesting property crime statistics. For about $10.00, you get a great deal of information that, along with your specific shrink results, will help you customize your strategy for shrink reduction. I also recommend networking with other local Loss Prevention departments and sharing information about habitual offenders, high theft items, etc. Together, this information can really make a difference in how you protect your merchandise.

Finally, retailers are concerned about organized retail crime. There seems to be some debate in loss prevention circles as to just how much of a problem this is. On one hand, there are those who maintain that ORC is a huge contributor to retail shrink, and that the answer is to work with law enforcement to go after the leaders.

On the other hand, there are those who argue that, if proper training, awareness, and protection standards are in place, ORC is a minimal issue because the boosters are being stopped before they can seriously impact shrink.

Both sides make good arguments, and I think it will take some time before we see which approach makes the biggest impact on the problem.

So, loss prevention professionals face tough challenges in tough economic times. My goal here is to share the “big picture” concerns of retailers in general so that LP professionals can manage their workload and focus to make the biggest impact possible on the shrink in their stores, markets, etc.

But we also have to be keenly aware of what our companies’ specific goals, challenges, and concerns are. At the end of the day, it’s about the shrink. If you catch 1000 shoplifters and dishonest employees, but your shrink remains high and unchanged, then the focus needs to be re-assessed.

So, how about it? Do you agree? Disagree? Want to add your own thoughts? Please leave a comment so we can discuss.

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The National Retail Federation is making this hearing available online today beginning at 4pm. Click here to go to the site, then click the link at the bottom to view the webcast. It will be interesting to see and hear the various viewpoints offered in this hearing.  

The subcommittee will hear testimony from Joseph LaRocca, VP of Loss Prevention for the NRF;  Frank Muscato, ORC coordinator for Walgreens; and Sheriff Grady Judd of Polk County, Florida, among possible others. 

I will have an update by tomorrow here on the Bunker Blog. In the meantime, feel free to comment either here on on the forum.

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So, since I have hired and trained my share of loss prevention professionals in my career, and certainly will continue to do so; here is my list of qualifications for a good loss prevention professional:

Professionalism: The first thing that any good loss prevention professional must learn is professional demeanor. I’ve seen the full spectrum, from the worst to the best, and believe me, a professional demeanor goes a long way. I’ve seen LP officers who cursed at suspects, and who made an already tense situation worse by barking at or treating suspects like they weren’t even human. On the other hand, I’ve seen LP officers diffuse potentially violent situations simply by treating the suspect respectfully and professionally throughout the incident, from the approach to time when police arrive to take over the investigation.

Presence: I am not sure this can be taught, but any good loss prevention professional must have a leadership presence. Since the LP officer must take charge of situations that very easily can become violent at any given time, the LP officer must be recognized by everyone who witnesses or assists during the incident as the person in charge. It’s a natural ability to assess a situation, and then take the necessary steps to control it safely.

Partnership: Every good loss prevention professional must also be a salesperson. No, they are not selling merchandise. Instead, they are selling ideas that reduce loss and increase awareness. They are also selling themselves as the subject matter expert on all things loss prevention in their store, market, etc. To do this, LP professionals have to build partnerships. They must gain the trust and confidence of their team members and be known by all as a good partner, who works with the team to drive the business while reducing losses.

Decision Making: The lack of good decision making skills gets a lot of otherwise good LP people into trouble. Early in my career, some 11 years ago, I was told something that stuck with me through today. It never left me, and I still use it all the time. I was told, by a mentor, to always make good business decisions. Sounds simple enough, but when you apply it to loss prevention, it takes on some new meanings. For example, sometimes the better business decision is to let the shoplifter walk away without approaching them, even though it hurts one’s pride to do so. LP officers must have the ability to recognize which decision is best for the business (store, company, etc.), and make that decision, even though our emotions may be telling us something else.

Writing Skills: This is one of my pet peaves. Reports written by LP professionals are a direct reflection of the officer, their company, and the profession in general. These reports become part of the company’s records, and in most cases, also are entered into evidence in court. That means that they are read by people, including attorneys, judges, etc. Proper grammar and spelling are essential.  Not only that, but the report needs to answer some basic questions like, “Who?, What?, When? Where? How? and Why?”. I have read way too many reports written by loss prevention officers that instead appeared to be written by second graders.

Strong Math Skills: Anybody who has spent any time in loss prevention at all will tell you that LP professionals spend a lot of time pouring over financial reports, looking for evidence of fraud and theft. A loss prevention professional must have the ability to review these reports and identify discrepencies. Strong mathematical skills are necessary, and a keen eye for variances doesn’t hurt at all.

Attention To Detail: LP is a detail profession. From audits to exception reports, the LP professional must have the ability to pay close attention to detail, and to “get it right” each and every time. When it comes to what we do, there is usually little or no room for error. The LP professional must have the “eye” for details.

Multi-Tasking: Loss prevention professionals do much more than apprehend shoplifters. They are the “jack of all trades” in retail. LP professionals are often tasked with multiple projects at one time, and are expected to accomplish them all, on time, and correctly. The LP professional must not only be able to multi-task, but must be comfortable doing so. This is a high pressure job, regardless of what the outside impression may be. If the LP professional is not comfortable taking on at least three projects at a time, then LP is probably not the right profession for them.

Patience: Loss prevention professionals who have little or no patience are doomed to fail. It takes a great deal of patience to fully develop a case from its beginning to the point when the LP professional is ready to apprehend a suspect or interview an employee for theft. Impatience causes mistakes, and mistakes lead to liability for both the LP professional and their company. Patiently going through reports and watching video to determine the facts involved in a case makes the case stronger, and alleviates the margin of error. It also builds the confidence of the LP professional in the merits of the case, thereby making it easier to obtain an admission. I have witnessed the “hurry up” methods in action, and without fail, I have seen very preventable mistakes made.

People Skills: When it comes to apprehending shoplifters, a loss prevention professional doesn’t have a prayer without very good people skills. The ability to read people and convincingly speak to them is eseential. Also, every loss prevention professional will, at some point, become an interviewer. Whether it be gathering information from a shoplifting suspect, or interviewing an employee for suspected theft or dishonesty, the LP professional must have good people skills as a basis for building interviewing skills. Communication is key, and the LP interviewer must know when to talk, what to say, and when to listen and what to observe. Of course, interviewing is an advanced skill, but without basic people skills, it is impossible to be a good interviewer.

You will notice that I didn’t include any physical traits in here at all. I know that there are those who think that LP agents must be six feet tall and very imposing figures because they are stopping shoplifters, etc. However, some of the most effective LP people I have ever known didn’t fit that bill at all. It’s a myth.

Those are the basic things I look for in a loss prevention professional. The list is by no means all-inclusive, but it does cover the basics, I think. If you think I missed something, or if you would like to add to this list, by all means, leave me a comment.

There is a book available that explains the responsibilities of the retail loss prevention agent. You can get it here.

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Since the woman was determined by mall security and police to be innocent of any wrongdoing, the manager for the store now faces assault charges. Lubi’s manager Hoshin Lee was arrested by Spartanburg Police after it was determined that the unidentified female customer had not shoplifted, and police could see visible marks on her neck that allegedly resulted from Lee grabbing her.

According to reports, the 20 year old female customer took some items of clothing into a fitting room to try on. She then exited the fitting room, placing items on a fixture outside the fitting room. Lee entered the fitting room and found 3 sensor tags behind the mirror inside the fitting room. He then asked the female to come to the fitting room. When she did, he grabbed her by the throat while accusing her of shoplifting from the store.

Both Lee and the customer called mall security, and Lee closed the store’s security gate to keep the customer from leaving. When security and police arrived, they found the articles of clothing, which the customer had tried on earlier, on a rack outside the fitting room. One piece still had a sensor tag attached, and two pieces were on clearance, and had never been tagged.

From a loss prevention perspective, this is a nightmare.  At the very least, there were some really bad decisions made here by Mr. Lee. Unfortunately for him, he now faces charges. Although his intentions may have been good in that he was trying to stop losses for his store, his methods were flawed, and it seems he was mistaken in his assumption that the customer had stolen merchandise.

There’s a great book available here that helps explain the “dos and don’ts” for non-lp retail managers.

Anybody want to talk about this case? Have you ever been falsely accused of shoplifting? Have you ever falsely accused someone of shoplifting? Leave a comment and let’s discuss it.

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Here’s an excerpt from the site’s home page:

LPCommunity is a fresh approach to addressing the interests, concerns and career advancement of people working in the Loss Prevention industry. A world of information designed to help you excel at what you do.

The site is organized into sections. Internal LP focuses on employee theft issues, including tips for better interviewing. External LP focuses on shoplifting and other external incidents, and includes safety issues and discussion about cameras versus floor surveillance, etc. Perspective is an interesting section that presents interviews from people who have either direct or indirect interaction with loss prevention professionals. These include attorneys, former shoplifters, etc. The career section gives advice to loss prevention professionals about career development. Finally, there is a job search section that allows LP professionals to search for openings in their area.

LP Community is pretty new, but already it shows huge potential. This is the first loss prevention site I’ve seen that actually addresses the LP Community at all levels, from the store detective to the VP of loss prevention.  I’m a fan, and I look forward to seeing how LP Community grows. The only thing that I can see that would be helpful would be to add an audio podcast to the site. Those of us who do a lot of traveling would love to download some good audio training and listen between destinations…

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