describe the image

Top 3 Worst Business Trends for Loss Prevention

Posted on 8/19/14 10:00 AM

1. Training Reduction - We live in an economy where cost cutting conversations have become more common than improvement discussions—unless of course you consider cost cuts as an improvement. Training departments and programs have moved from a staple to a luxury. But bigstock-Empty-rack-of-clothes-and-hang-66576664in saving the time and costs, we often sacrifice those hard-earned dollars we work so hard to earn. Industry experts estimate that nearly 15% of all losses are the result of error. Those estimates are becoming difficult to defend in an environment where companies loath spending any money on educating employees. The real problem is that without a solid foundation and the certainty that all the ships are moving in the right direction, the causes of our loss and declining profits become a large gray area. And the little mistakes can really add up. Transfers and shipments can be mis-processed, incorrect prices are rung through the register, waste or damages are mis-handled, and improper procedures open the door for breaches to our merchandise and money protection standards. Really, the only way to know the difference between an employee who doesn’t know versus one who doesn’t care is to ensure each has received the proper training and guidance on how to do things right.

2. Customer Service Frenzy - In the quest for profits and foot traffic, customer service can appear our best ally. And of course it is, but a danger  exists in the application of an “any thing goes” customer service attitude. Customers understand companies are desperate to improve sales and to stay afloat during the flood of bad news for Main Street. Some of those customers will certainly take advantage of our willingness to do “anything” to make them happy, but where profits are concerned…we still need a smart approach. Sure, we need a fair and reasonable refund policy, and we can and should consider mark-downs on old, worn, or ready to RTV merchandise. We do, however, also need lines of authority in making the decisions that effect our profits. That means policies and stages of approval. Just because a customer complains shouldn’t mean we give them anything they want for fear they’ll never return. And asking a customer to adhere to our refund policy—such as have your receipt and stay within the return time-frame—isn’t placing an unreasonable burden on them. When we allow customer service to be driven by fear of loss, we open the door to all types of bad decision making at the store-level. It’s far easier to give the customer anything than entertain a possible, if not mild, confrontation. Most importantly, the customer service expectations we create today—when desperate to make the quarterly sales goal—will be with us for a very long time. With that in mind we should be certain we can live with the standards we are creating.

3. Complaince Creep- Many policies and procedures are written from a “perfect world” viewpoint. That is, they are the rules to follow assuming a store has the correct number of associates, the correct amount of time, and proper training. In the best of times, many policies are unofficially revised at the store level long before we officially re-write them to match the realities of daily business. In most cases this is good as we create best practices by developing a process that meets the intended goal through the application of a real-world filter. Compliance Creep however can also have very bad results when the changes are designed for the wrong reason. When we don’t have enough staff or time to complete things the correct way, we often accept short-cuts with unintended consequences. For example, reduced staffing means we have to accept a single signature for a refund. A single signature means no real verification of an actual customer or confirmation of a legitimate return. “Speed” processing shipments means we can’t truly verify correct items or quantities. Loosening the oversight of the employee purchase process opens the door for abuse. There is a strong correlation between sound operations, compliance and shrink. Messy operations tends to predict profit and loss issues. Compliance Creep is the gateway to these future concerns and we are better served developing policies and practices that “Do” work in our changing environment, than simply ignoring the issue until some future date when our store resources match are old policies

Today’s economy presents many challenges to businesses. It is important to not only advance but to survive the ups and downs of consumer shopping habits. Cost cutting will certainly separate the winners from the losers. Smart choices, however, will determine if those efforts are enough or if in the end they just make the end more painful. The need to be more efficient and more frugal doesn’t require we shuck off everything we’ve learned about asset protection. Instead, it requires a more creative approach. The best place to start is with a single question: “How do I achieve a particular goal and maintain a level of protection that works with the resources I have?” 

It’s not an easy question to answer, and the answers will be as varied and specific as there are business developing those answers, but in the end, smart adaptation will separate the survivors from those who enter the Hall of “Do you remember that company such and such?”

 Authored by:

 

Ray Esposito   Ray Esposito

 

   Ray Esposito Linkedin




Loss Prevention Planning Guide

 

Topics: loss prevention awareness, policy development, loss prevention, employee awareness, policies and procedures, customer service, Compliance, Training

Join our email list!

Posts by category

see all

Most Popular Posts