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3 Holiday Myths That Are Killing Your Shrink Results

Posted on 11/12/13 3:00 PM

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factThe holidays are a stressful time for retailers, restaurants, and grocers. We are stressed from being too busy and stressed from not being busy enough. A stressful environment is not very conducive to thought clarity or rational considerations. Perhaps this is why certain myths continue to be prevalent during the holiday season. It’s not that we can’t point to rational evidence that is contrary, it’s just that we understand these proclamations are more of an emotional response rather than a logical one.

The problem is that three of these myths can (well, I content do) have a substantial negative impact on loss control. The fact that we accept them rather than dismiss them means that our ability to impact loss is greatly handicapped by going along with these well intended statements that define or dare say limit proper action.

1. We’re too busy to audit - No one wants an audit regardless of the time of year. And although the “holidays” seem like a viable reason NOT to audit, that decision is counter-productive. Consider this, if we are attempting to gauge compliance to important polices, which provides a clearer snapshot? When there is plenty of free time to do things right or when things are hectic and doing things right demonstrates an ingrained habit? I would argue that anyone can do the right thing when not under pressure, but how a location operated during the busiest of times is a true picture of their level of performance. Most importantly is the consideration that compliance standards are more critical not less critical during our busy seasons. One might argue that auditing during the holiday’s is disruptive, but I would compare that to being too busy having a heart attack to go to a hospital.

2. Temporary staffing and stores are different - They are different, but not different in the sense that we should do less training or conduct less oversight. The thought is that temporary staff and stores are temporary, so we should not overly invest in these workers or locations. They are temporary and therefore, probably have temporary loyalty to the company and little concern with the February loss or shrink results because they won’t be around to hear about it. If anything, we should provide more intense screening, orientation, and employ stricter policy guidelines to ensure that these “for the moment” workers and locations do no harm to our company.

3. Shoplifting is the big problem - No doubt that shoplifting rises during the holidays. No doubt that one in eleven Americans shoplift…but…one in ten employees are dishonest. So if shoplifting increases than we must also assume employee dishonesty increases as well. And if employees steal on average six to ten times more than shoplifters, than the real “big” problem during the holidays is…internal theft. Something we will be hard pressed to discover since we stopped auditing sometime in early November.

I understand that behind these myths lie more valid reasons. The reasons are that our field operators are busy, stressed, and focusing on the customer. In my experience, that is pretty much true every month of the year. In the consumer faced business world, we are always getting ready for something. It might be inventory, spring, Mother’s day, Father’s day, Back to School, any thing you can think. We rely on the holidays, the seasons, and the life celebrating events for our business. It may be a nice “gift” to provide holiday support in the form of discontinuing audits, short cutting efforts on temps, or declaring that our theft concerns have shifted to the consumer not the employee.

Unfortunately, I think that it is also a mistake. Making a sales plan is critical, but if in making that plan the cost is higher shrink then... did we really make the plan? Interestingly enough, retailers (encompassing restaurants and grocers) are one of the few businesses that decreases in loss prevention activities during busy periods. I’ve never seen a bank reducing standards during the holidays, an airport security conducting fewer screenings, or a law enforcement agency doing fewer patrols because people are too stressed to worry about speed limits.

No, these are nice holiday myths with the well-meaning intention of reducing the field of attention. Most will continue to live by them even though the impact of these decisions have a far reaching impact on their yearly performance.

 Authored by:

Ray Esposito   Ray Esposito

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Topics: shrink awareness, Audits and Investigations

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