I remember a time when my refund investigations included a spread sheet and a lot of digging through media boxes. Building a refund history, reviewing details, and ultimately discovering a pattern of fraud was a month-long event. Today, the technology advances in exception based reporting makes me want to say to new loss prevention professionals - hey when I was a kid I had to walk two miles to school - up hill both ways.
With the ease of technology, sometimes we can become so dependent on its use that we forget that seldom is a piece of hardware or software a cure for all things. EBR software is a critical component of an effective loss prevention program. It reduces research time, increases our ability to analyze and do things we could never do with a pencil and paper. It’s not a cure-all however and the level of faith we put into any system to protect our assets should be done so after contemplating the four critical considerations:
- The “right” product
- The “right” analysis
- The “right” resources
- The Tip of the Iceberg
The “Right” Product - All exception based reporting systems are not created equal. Consumer desire for analysis tools has led many POS providers to include some form of “back office” reporting in their systems. While many of these are useful top and mid-level reporting tools, users must be cautious in assuming “all is fine” because there is nothing of “note” on the reports. EBR systems require thresholds, ad-hoc reporting, and history analysis for true effectiveness. While a home grown or “included in the box” system can help build a quick exception reporting foundation - users should consider the things they can’t see with these systems and ensure alternative reviews for deeper digging.
The “Right” Analysis - Regardless of your system, that system is only as effective as the user’s understanding of what the data means and which data is relevant. Setting the proper thresholds, looking for the less glaring, but still evident patterns, and knowing what the system “can’t” tell you is critical to effective use. Analysis of POS transactions has to move with the ebb and flow of the business. That means “settings” and “analysis” needs to include “knowledge” and “adjustment” for things such as new coupons, sales, and operational procedure changes. Analysis is a verb, it requires action and reaction to achieve its goal.
The “Right” Resources - Data becomes information upon interpretation. Information becomes answers through investigation of its meaning. EBR systems can use data to provide great information, but that information still requires further investigation. The top refunder is not necessarily dishonest, they might just be busy. Therefore an EBR system needs both a knowledgeable analyst and well-trained field staff to investigate the results…so in some ways we’re back to that box of media. Without the final piece, the investigation, EBR results alone can lose much of their potential impact.
The Tip of the Iceberg - The front of the house, the cash wrap, and POS transactions are an important place to protect company assets and profits. Certainly the statistics would suggest that many of the yearly internal apprehensions occur at the point of sale. Before we assume that apprehension statistics are an accurate reflection of theft locations, we first must consider that often our “attention” to areas will directly impact the “results” in those areas. Companies and loss prevention professionals place a lot of focus on the front end in terms of resources and capital. That no doubt is wise, but no doubt also affects results.
EBR systems reveal many things about POS activity, but there is plenty of theft elsewhere. So while EBR may be a cure for POS activity ailments, it can’t see the rest of the location and therefore can’t fix all of our loss prevention problems. EBR is a great tool - but just one in the entire box of LP best practices.