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The Top 5 Audit Questions Revealed

Posted on 4/14/15 10:09 AM

Achieving a goal is simplistic in its complexity. We define our target objective, we create the process to get there, and then we periodically measure our progress. In loss prevention, the latter we measure through the audit practice. In that sense an “audit” can really be any type of measurement. In the retail and restaurant environment, we audit many different practices and at times our overzealous desire to measure “everything” can result in information overload - a topic I’ll discuss further in an upcoming post.

Although every audit question provides some form of information, some questions are better than others are. This principle, loss prevention interviewers learn early in their careers.

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Topics: Audits and Investigations, Retail Audit, Audits

Criminal versus Control

Posted on 4/8/15 1:37 PM

In a market where brand recognition, market share and high competition have most businesses working overtime to reduce cost, there is little room for the losses caused by internal theft. Industry reports suggest that as much as 43% of all losses are caused by dishonest employees, totaling $16 billion annually in revenue loss.

Obviously with so much at stake, an honest employee is a key element to business health - but is there a magic bullet? How can we tell if an employee is likely to engage in dishonest behavior?

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Topics: loss prevention, Audits and Investigations, Calculating Shrink

The Communication Paradox:

Posted on 4/1/15 12:00 PM

Effective loss prevention is dependent on the timely receipt of information. Discovering dishonesty after the responsible person is gone is not as helpful as learning of their actions in advance of his or her departure. Being aware of a potential risk early on allows us to react sooner and thus reduce or avoid loss. One would think that in the age of high velocity communication, we would be more effective than ever. Unfortunately, what many of us have learned is that velocity doesn’t always mean efficiency.

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Topics: career development

The EBR Balancing Act

Posted on 3/25/15 11:18 AM

For more than two decades, exception-based reporting (EBR) tools have been widely used by retailers to analyze point of sale (POS) and other business related data. Even though these tools have saved considerable time and resources in the analysis, detection and resolution of concerns, the use of these tools still requires time and resources. So, how does one determine the necessary number of analysts to properly analyze their exception-based reporting information?

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Topics: loss prevention, EBR, Exception Based Reporting

Shrink Results – Good Program Or Good Luck?

Posted on 3/17/15 9:00 AM

Everyone in the organization is satisfied, if not ecstatic, when final shrink results reveal that we have achieved the company goal. The shrink result, alone, seems reason for celebration and these good results would intuitively indicate the existence of an effective loss prevention program.

An unfortunate number of times, however, companies are frustrated when the next inventory cycle misses the goal or when shrink slips back to a higher percentage.  In a search for answers, the most common responses to increased shrink are:

Even a highly focused and effective program will not prevent every store from having a shrink meltdown. A focused program, however, that maintains a clear connection between its components, execution, and results can accomplish three important objectives:

  1. Confirm that the program components provide desired results
  2. Establish and monitor the behaviors that create a rise or fall in shrink
  3. Determine when the issue is one of effectiveness versus resources
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Topics: loss prevention program, Calculating Shrink

How Are You Calculating Your Stores Shrink?

Posted on 3/10/15 9:45 AM

“Shrink” is a common term in the retail world. It is a term for the calculations that demonstrate the loss of merchandise in relation to our total inventory sales. We say “calculations,” plural, because there is some flexibility in how it is calculated and the exact nature of the relationship between those items lost and those items sold. Most loss prevention professionals prefer to discuss shrink in terms of loss as a percentage of retail sales, while many finance professionals like speaking in terms of true “cost.” In truth, as long as the reporting method remains consistent from year to year, the three accepted methods of Shrink calculations are all created equal. 

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Topics: loss prevention, Calculating Shrink, LP 101, Shrink

Is Your Loss Prevention Program Like A Spork?

Posted on 3/5/15 9:11 AM

You may not immediately recognize the word “spork.”  Perhaps you know it as a “foon.” It’s that inventive little utensil made famous by fast-food take out and camping trips. The spork is a combination of a spoon and a fork. An efficient and cost-saving invention that has been around since at least the eighteen hundreds (I won’t go into all the things I know about the Spork’s history at the risk of sounding like a geek).

Now this little tool is great in a pinch (or on the road or in the woods) but I’m going to go out on a ledge and make a guess. I’d guess if I open the utensil drawer in your kitchen that I would find lots of silverware. No doubt, two sizes of spoons, two types of knives and prob

ably two sizes of forks. I’d probably see that you could last a week in full supply without ever washing a utensil. And I’d bet that beyond the basics, you have a whole bunch of other interesting, though seldom used “specialty” utensils. An entire drawer of stuff devoted to doing one thing – eating. I’ll go a little farther out on that ledge and bet that in all that stuff, maybe…and that’s a big maybe…you have one “spork” still wrapped in plastic. That lone little guy is probably not with the silverware, but in that “other” drawer - The one where you keep all those condiment leftovers and take-out menus from your last fast food run.

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Topics: loss prevention program, loss prevention, employee awareness

Attend What You Intend

Posted on 2/25/15 9:00 AM

 

They say the road to Hades is paved with good intentions. If that is true, than I say most of the heavy road construction was completed by the “new year special committees.” Those business groups we form in January and February charged with special tasks such as POS rollout, Training Initiatives, or Shrink. The intentions are, of course, in the right place. Certainly, in at least the first couple of meetings goals are met…and then comes Spring…and Summer…and attendance and attention wane.

Now granted, I’m not a huge fan of committees. In my opinion committees are as the British politician, Sir Barnett Cocks said: “a cul-de-sac down which ideas are lured and then quietly strangled.” My distrust for such groups is not born out of dislike for being a team player. Team’s are critical to achievement—small teams. Small teams with a specific set of goals, that follow specific plans, and include specific and individual responsibilities—I call it managed creativity. My reason for a small team preference is that while evolution may make great leaps to achieve change, human goals are reached through small and incremental steps. The more people there are milling around, the more likely we are to lose focus and misstep. But this isn’t an article on the pros and cons of committees. It is about “attending to what you intend.” A premise that is  much simpler in theory than in practice. 

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Topics: loss prevention, lp development, educate, career development, associates, Consulting

Baggage Claim

Posted on 2/17/15 10:00 AM

As humans, we were born selfish. Our instinctual need to be the most important part of our own universe runs through all our veins, and rightfully so. Without “me” being the top priority in everything we do every single day, we would never survive. So, it should come as no surprise that our own life issues are carried with us at the top of our minds, everywhere we go- including work.

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Topics: employee theft, loss prevention, employee awareness, educate, Holiday Tips, customer service

Is Your Company Headed for the Emergency Room?

Posted on 2/11/15 11:37 AM

It’s an interesting conundrum that although no one can guarantee great shrink results, bad shrink is easy to predict. It’s a case of we “don’t know what we don’t know.” In other words, one can never really be completely sure if an employee may have stolen, if unreported shoplifting is crushing our profits, or if people are confidently doing important things the wrong way. The reverse however is not true. The absence of important and critical behaviors is easy to detect. And in their absence, one can surmise that our shrink results will be a train wreck or that any positive results are going to be, at best, really fortunate luck.

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Topics: loss prevention development, preventing theft, loss prevention, Retail

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