The Bunker Blog

Seems like there is no shortage of stories about the rising rate of shoplifting and internal theft today.  Most of these news stories either directly or indirectly blame the rise on the recession.

There is also no shortage of new incidents like this one in Mississippi, where several employees at a local retailer were involved in a fraud scheme where the were paying either very little or nothing for merchandise from the store.

At the same time, retailers across the country are trimming down their loss prevention departments. Payroll budgets are getting slashed, and many jobs have been lost in efforts to cut costs and increase profitability.

With less bodies in the stores serving customers; less LP agents on the floor protecting the merchandise; and with retail crime already on the rise; things sure don’t look good for retailers’ shrink lines this year.

I still say this economic recession is an excuse when it comes to theft. However, employees whose schedules have been cut, who see that their company is cutting costs, starting with payroll; may be tempted to subsidize by stealing from their company.

Folks recently unemployed may take to stealing as a “means to survive”, at least  that is how they would justify it.

The fact is, this whole situation looks like the “perfect storm” when it comes to increased shrink. Sales are down, theft is up; there are less people protecting the stores, and more people stealing from them.

There are a lot of displaced LP agents out there who have recently been unemployed themselves. The jobs that do become available will be tough to get because there will be many more applicants than normal. This gives retailers the opportunity to stack the deck with their retail LP teams.

I have a feeling that some of us (retailers) are going to have that “punched in the gut” feeling when we see the numbers this year. It’s bad enough to see sales going down. Add increased shrink to that scenario, and well, you know what I mean.

We have to be prepared for, and expect the worst. At the same time, we have to continue to meet each new challenge with a renewed determination to hold the line. We may not make many huge gains in the war on shrink this year, but we can at least win a few battles, and make sure the enemy takes some casualties, as we hold the line on retail shrink for 09.

Good luck to us all. As always, feel free to comment. Discussion is welcome and encouraged.

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For a limited time only, you can download my free ebook “Loss Prevention For Small Business” for free. This ebook is a 20 page sample of a full book that I’m working on. I’d love it if you, my readers, would download it, read it, and then give me some feedback.

Get your copy HERE

And don’t forget, please email me here with your feedback once you have read it.

Popularity: 21% [?]

Simply put, if you have certain expectations of security within your organization, from a cash handling program to merchandise protection standards, you must audit these procedures regularly, or they will lose much of their effectiveness. Why? Because your employees will perceive them only as important as you do.

If you place high importance on a particular program, you will follow up regularly to ensure that it is running properly, and efficiently. Employees see that, and will take their cue from you, in most cases. For example, if you demonstrate great customer service skills, and demand that same level of customer service from your employees; and, you regularly review with them any opportunities and strengths to help them improve, they will “get it”. Essentially, they will become very good at customer service, and will thereby increase your sales.

By the same token, if your employees know that you are going to review your security policies and programs, and that you are going to follow up with them about any deficiencies or strengths you find, then of course, they will follow your lead, and make those programs important to themselves, too.

It’s really about managing people. You just have to apply the same principles you employ to increase your business to the programs that protect your assets. If you never check to see if the back door is locked, your employees will not think it is important to keep it locked.

Even small businesses can, and should, have a security audit in place. Depending on the size of the business, and the specific need, the audits could range from a simple checklist to a full-blown multi-area, detailed audit process. When it comes to security, here are some things that every business owner should be checking on a regular basis:

• Physical Security – Are your doors locked? Is your building secure? Is your alarm working properly? Including all motion sensors and door contacts? If you have cctv, is it working properly? Are the times correct on your video output?
• Cash Handling – Is your cash handling policy being followed? Are the proper signatures, dates, etc. in place? Is your safe always locked? Do you regularly remove cash from registers so that you limit your liability in case of theft or robbery? Are your daily/nightly deposits secured? How are your registers counted? By whom? Are the fail-safes being used consistently? Is there accountability for discrepancies?
• Merchandise Protection – Are your lockable cases kept locked at all times? Is your high theft or high risk merchandise protected from theft? If you use Inventory tags, are they being used to your expectation? Do your employees respond to alarm activations?
• Operations – Are you checking your receipts of goods for discrepancies? Are you following up with vendors on any issues to ensure you get credit for mistakes? Is your stock area clean and organized, so that any theft activity will be more obvious? Is there a process in place to verify all receipts?
• Safety – Are your customer areas free of any potential dangers? Are your fire exits clear and unobstructed? Are your back areas clean, organized, and a safe work environment for your employees? Do you have an emergency plan? And, do all of your employees understand it?

This is just an example of the basic items that any business owner should be auditing on a regular basis, be it monthly or weekly. Sometimes, a simple checklist will work. The key to the audit is the follow up. All discrepancies must be corrected, and reviewed with the employees to ensure that everyone understands the importance of the programs. If you inspect what you expect, you will find that you will see improvements in execution, and reductions in losses.

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According to fdlreporter.com, the crime of shoplifting is increasing at a steady rate of 20 percent! It is also one of the most common crimes in America today, accounting for 30 percent of all reported crime!

According to the FBI, shoplifting is one of the nation’s fastest growing crimes. It’s increasing at the alarming rate of 20 percent a year

Full Story HERE

When you consider that theft related losses account for roughly 60 percent of all losses incurred by retailers, you can see that this is a growing problem that demands an answer. Loss prevention must be proactive, and not reactive, in providing solutions that will deter theft but not deter sales. It’s a tough dilemma, especially when you are dealing with a 20 percent rate of increase in the problem.

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