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Loss Prevention’s Big “I Wish We Had” Moments

Posted on 2/3/15 10:28 AM

bigstock-Female-Worker-Writing-Inventor-47389276We can spend a lot of time discussing audits, shrink numbers and awareness programs, but there is nothing more frustrating than the unresolved theft issue. I’m not speaking of the “mystery” stuff where there is uncertainty as to the cause of the loss. Nope, I’m referring to the missing money or merchandise that by virtue of access and opportunity had to be an employee. Things like the dreaded missing deposit or empty back stock containers that used to contain our merchandise.

Their is something psychologically draining about “knowing” you have a dishonest employee problem, knowing they took “stuff” and knowing there is no way you can prove it.  Sure you can interview the entire store, sure you can blame it on the employee who quit, and sure you can resolve to never let it happen again, but still you’ll taste bitter dissatisfaction. The interesting aspect of unresolved dishonesty is that it is usually accompanied by a big “I Wish We Had” moment. A mental…maybe verbal…rundown of the things we wish had been in place before the theft. That little bit of now elusive evidence that would have drawn a comfortable trail to the responsible party.

Really these situations are the definition of a loss prevention crisis: A set of circumstances and conditions, some recognized, others not, that in retrospect warned us that it was coming. Not all conditions will lead to a crisis, but in every one of them exists the potential for a crisis. For example if you have no refund verification process you are ripe for refund fraud. No controls on petty cash? Probably will be missing a few bucks sooner or later. No employee purchase controls? A lot of non-employees will sooner or later receive that employee benefit. The list goes on and on, and you don’t need a crystal ball to predict these events…but you may need one to resolve them…and that’s a really bad plan.

So here are my 3 favorite Big “I Wish We Had” moments:

Equipment: There seems to be a dark, malevolent force working in the retail universe. Companies invest millions in camera and recording equipment and yet in the most important hour, the equipment doesn’t record the event. The gremlins of dishonesty seem to magically sabotage that expensive DVR. Except not really. In truth the moment is “I wish we had turned it on or had timely maintenance conducted.” 

Accuracy: A number of years ago I was working with a company on their LP efforts. Running through their program  I noticed cash shortages weren’t a part of the audit. I did a review of their company wide cash shortages and was shocked. It was a lot of money and it was disappearing $5 a time, every day and every month. When I asked about it I was told, “well we’re not too concerned with the nickels and dimes.” Today that company is running upon the jagged rocks of bankruptcy. I, of course, don’t wonder why that happened. Accuracy is important. When things break bad, when we have to resolve the “big” issue, then we must be certain that the information in all the little details is true and accurate. If we can’t depend on an employee schedule being accurate, or a cash shortage log, or even alarms codes, then we can’t expect to build a case on evidence. 

Accountability: I had an idea that I believe would end the process of sharing sign-on’s and passwords in retail. It’s simple, your password is your social security number and your log-on is your Facebook or Twitter password. It’s doubtful any employee will play “fast and lose” with that information. Knowing who did what is a lot harder when there is no accountability. During investigations when these simple things break down, employees are quick to share all the loop holes that exist. We find out that no one actually verifies the deposit, or that batch signing is standard operating procedure, and everyone has access to the manager’s log-on, and we we haven’t updated that alarm list since circa 1996. So what could be simple to resolve… “Employee Z you processed this refund” … becomes a wicked web of possibilities most of which are impossible to unravel. And we will of course think…I wish we had made accountability more important.

There are many reasons an employee may steal.  Regardless of the reasons there is always two underlying motivations as to why they did—there was an opportunity and it appeared highly likely they could get a way with it. These three big 'I Wish I Had Moments' aren’t difficult to fix. A little scheduling, a little auditing and a little insistence that we follow the rules or we receive the consequences. And for location managers who claim that there “just isn’t time” for this stuff, I ask: Can you spare a couple of days helping us not figure out who took all your deposits? It takes more time than doing it right the first time and its a lot less pleasant.

Authored by: Ray Esposito      


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Topics: loss prevention development, preventing theft, employee theft, loss prevention, Refund Fraud

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