I read an article last week posted by Doctor Hayes in LP Magazine. The article on the need for Evidence Based Loss Prevention makes perfect sense and for the most part I agree with the good doctor’s opinion. I wrote along the similar line in my post, Is Your Deterrence Loud Enough. Our loss prevention goal is deterrence. We don’t have enough staff, money, or technology to “catch” them all, so the best method is one that prevents or deters theft when we aren’t looking.
It’s sort of like speeding. Imagine if speed limit enforcement relied strictly on a cop with a radar gun. We’d need a cop on every street, twenty-four hours a day to prevent hundred mile an hour races down residential streets. But that’s not the approach. Instead we erect signs, we employ public service announcements, and we impose fines, add points to licenses, and conduct random radar traps. All of these efforts keep most of us within the reasonable speeds of a particular road—yes I’m hedging here. We are deterred by the cost of being caught. We even post large signs that warn about stop light cameras. These things aren’t a secret because secrets don’t deter.
There is a problem, however, with this application to loss prevention and the issue lies in the exact place Doctor Hayes told us to look—psychology.
It’s fine to ask Loss Prevention to deter more crime and to focus on preventing rather than capturing. Except, most LP professionals recognize that we aren’t graded on the things that didn’t happen. In many organizations, the value of loss prevention is still a numbers game. We often only get credit for “low” shrink if we have the corresponding stats to prove we had a part in that success. I’ve sat through several consultation where an Operator complains, “our team doesn’t catch enough people.” So there is still a psychology or belief in retail that LP performance is measured, in part, on case count…especially when shrink rises.
Loss Prevention represents a real cost to companies. Companies don’t like costs that don’t demonstrate a return on the investment. Deterrence can be measured, but only indirectly and only on the single parameter of “shrink” or loss. The issue is compounded by the fact that “other” factors can play a role in shrink contribution—things like systemic errors, inventory miscounts, and distribution problems. None of these can be reduced through deterrence and thus without a “case count” to point to, an effective “deterring” LP program could have no proof of their contribution to prevention at year’s end.
As I stated at the start—I agree with Doctor Hayes’ contention. We should focus on deterrence. We should prevent more than we apprehend. We should send a “louder” message to both internal and external thieves. It makes for a better program, better results, less cost, and certainly less liability. The real change, however, begins with the internal measurements of success. Not just the measurements by loss prevention, but by the entirety of the Operations team. For now the predominate thoughts are “Sales teams sell, operators operate, and LP catches bad people.” Until there is a shift in that psychology, a deterrence first philosophy won’t gain a lot of ground….well…in my opinion.
Authored by: Ray Esposito