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Is Helping A Customer Worth Losing Inventory Or Money?

Posted on 9/17/13 3:30 PM

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Customer ServiceToday’s retailer expects their associates to engage with customers on the sales floor building relationships; selling not only a product, but a company image and lifestyle. What happens when a change to customer service or operational procedures cause an increase in theft or loss? Which technique should prevail; Loss Prevention or Customer Service?

One area where we have seen changes over the past couple of years is at the point of sale (POS). Retailers like Apple have led the way (since 2006) with mobile POS, allowing sales associates to walk the floor ringing sales and taking credit cards on a mobile device. Grocers and large retailers have also implemented self-checkout systems, shortcutting the interaction between cashier and customer; supposedly to allow for more interaction on the sales floor.

Many retailers not yet at the point of mobile or self checkout POS systems have been looking at ways to reduce the amount of time spent at checkout; perhaps at the cost of some loss prevention best practices. It takes more than a balanced approach to determine the impact on the customer experience versus the potential opportunities for loss. Let’s take a look at some of the areas where retailers have sought out a means of reducing the time spent at checkout.

Assigned Register Drawers and Shift Change Audits

In a perfect (LP) world, each associate would have their own register till, audited before and after their shift. However, we know this is not feasible (or happening) in most retail environments. From a customer service and/or operational perspective, maintaining separate tills can be expensive, time consuming and a managerial headache. However, sharing register drawers can also complicate accountability. This is where proper register audits, including shift change audits, are important.

Register audits, conducted throughout the business day, have specific advantages when it comes to preventing and/or determining a monetary loss, those advantages include:

  • Identifying a cash or monetary variance within a smaller window of time

  • Reducing the number of associates working when a variance occurs

  • Providing assurance to an oncoming associate that the register is balanced

  • Serving as a deterrent to possible dishonesty, knowing that registers are audited

  • More accurately tracking variances and help to investigate consistent losses

Some retailers have eliminated register audits throughout the day in order to reduce the amount or “downtime” at the register for potential sales or customer interactions. If your business has low cash transactions, then you may be able to reduce the number of audits conducted daily. However, eliminating audits or reducing shift change audits when dealing with more cash transactions is not a wise choice. Skipping register audits may save time, but at what expense?

Management Authorization for High Risk Transactions

Refunds, voids, cancel and no sale transactions are often known as high risk transactions; those most often conducted in employee theft. At one point, most retailers only allowed managers to conduct these transactions. Today, many retailers allow most associates to conduct these transactions in order to prevent the customer from having to wait for management involvement.

We have learned through many of our dishonest associate investigations that removing management from the process does increase the opportunity for fraudulent activity. However, we have also seen that even with management approval or witness confirmation, store associates (and management) enact their own time saving techniques by;

  • Sharing management codes or swipe cards rather than calling a manager to complete a transaction.

  • Signing all high risk transaction forms at the end of the night instead of during the time of the transaction.

  • Voiding a transaction as a shortcut to complete a transaction (or vice versa if you don’t allow post voids in your environment)

  • Omitting customer information or entering in dummy or department numbers instead of accurate SKU information for returns.

Self-Checkouts: Increase in Theft or Failure to Properly Monitor?

A few years ago, self-checkout registers were the big thing in grocery and some big-box retailers. Recently, there have been several articles about some removing self-checkout due to research and studies showing increased theft, loss and lack of improved customer service. Check out the article from loss prevention experts on the subject listed below. Is it really due to theft and loss or is it lack of proper controls and customer support?

3 ways to stop theft at the self-checkout

As retailers begin adopting technology like mobile POS (which has its loss prevention challenges) and focus on customer service we, as loss prevention practitioners, will need to adapt, evolve and balance the needs of the business against the needs of loss prevention.

Just remember, as you look for ways to improve your customer’s experience, consider the impact on exposure and include loss prevention in the discussion.


Authored by

Marc MAcGillivray

Marc MacGillivray, LP Program Director

  Marc MacGillivray Linkedin

Topics: Loss Prevention program and development, Audits and Investigations

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