Encouraging your employees to get into a loss prevention mindset

People steal. There’s no surprise there, right? Well, what are you (the owner/manager) going to do about it? What’s your first line of defense? Awareness.

Creating awareness about loss prevention is a major component to fight the war on shoplifting and internal theft. If you help your employees think more centrally around the concept of loss prevention, then thieves will notice and feel uncomfortable in your store or restaurant.

Awareness can even lead to creating a sense of ownership amongst employees too. You can create a mindset of “Hey, I don’t want anyone stealing from my store. Shrink affects my bonuses,” which creates a halo effect on others.

Here is a brief list of things you can do to create more awareness in your restaurant or retail store:

-Challenge your employees to know the store stats. If you talk about loss prevention everyday with your employees, they will become more aware of what it is and how it affects business. What is your shrink percentage? What is your shrink goal? Where are the spots in the location where people are most likely to steal? What are recovery statements? Who is your Loss Prevention Manager? In what instance should they be called?

-Make an LP informational bulletin board in the break room. Keep all the things employees should know here; shrink percentages, facts and information, success stories, incentives, a list of behaviors shoplifters typically exhibit, contests, the loss prevention hotline poster and numbers to call in case of an emergency.

-Explain the importance of shrink and how it affects each employee. If shrink is too high, someone might not get enough hours they want or the raise they requested may be put on hold. A lot of things depend on the shrink percentage of the store or restaurant.

-Create incentives/contests to encourage a lower shrink percentage. Sets goals and when you achieve them, reward the employees that made a difference. Nothing motivates people more than an incentive.

-Role play. Sometimes employees can be aware, but when faced with a real life situation they freeze and don’t react as well as they should have. This is where role playing comes in. During a controlled environment role play, have one employee ask another for an extra discount on top of what they’re already getting. This give the employees to formulate a statement back to their peer. Ex. “No, I don’t think that’s allowed. You can always check with the manager to see when the next extra 10% off is though.”

-When you talk sales, talk loss prevention too. Maybe this is only a retail instance, but when coaching employees in the sales environment, coach them on loss prevention as well. This will prove that it’s something equally as important as sales. Ex. “Give me 3 examples of how you would sell this watch. Then give me 2 examples of how you would approach a potential shoplifter if you thought they were trying to steal it.”

Again, employee awareness is key. These are just some ideas that The Mershimer Group recommends for a safe and aware work environment.

Brand Integrity. A Loss Prevention Function?

The Mershimer Group was recently retained to conduct site inspections in thousands of one QSR's franchised units across the country. We were asked to enter the unit, and verify that food items found in the walk in were, indeed supplied by this brand. There had been concerns that Franchisees were sourcing their own product, and not buying from approved vendors.

I was challenged by a peer in the industry as to why they would "waste" money doing this, because, who really cares whether the restaurant buys their mayonnaise from the approved supplier versus Costco? Additionally, she challenged how this was loss prevention's issue anyway. I was shocked that someone in the loss prevention industry would not comprehend the concept of "Brand Integrity". So, I went on my rant as to how using the wrong mayonnaise, bread, sauce, ice cream, etc. can affect the brand. I explained that when a consumer visits a restaurant in one part of the country, and loves their particular brand and menu item (and yes, consumers "love" their favorite brand and menu item at that brand), they are extremely offended when that item does not taste the same in another area. And if you think using a different mayonnaise can not alter the taste of a sandwich, you are mistaken. I have always been a Bob's Big Boy sandwich fan. I've loved this sandwich since I was 12 years old growing up in Western Pa. The concept of Brand Integrity hit me like a punch to the midsection about ten years ago when I visited a "Big Boy" in Southern California. I ordered the Big Boy sandwich, and as I took my first bite, I was shocked to discover that this franchisee used salsa on their Big Boy sandwich instead of the approved Big Boy sauce, which is more like a tarter sauce. Talk about a dramatic difference when it hits your mouth. When you expect one thing, and get something so much different, it is upsetting enough to make you question your loyalty to that brand. And that is the point i'm trying to make in this blog. When consumers expect and pay for one thing, but get something different, they are very likely to turn their back and vote with their legs, as they walk out the door.

As to why Loss Prevention is involved... I am a firm believer that anything that damages the brand, affects the bottom line, and that is what loss prevention is there to protect. If you are a loss prevention professional for a restaurant brand, and are not involved in brand integrity issues, I would urge you to jump in with both feet. I know of many national chain LP functions who focus solely on employee dishonesty, and other criminal activity. In this economy, the LP function must be looking at additional opportunities to positively impact the financial welfare of the business. Focusing on those things which affect Brand Integrity, which ultimately affect consumer confidence is a great place to jump into.

Independent Joe Magazine - Mershimer Group article

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Johnny Rockets plans three new concepts – Nation’s Restaurant News

Johnny Rockets plans three new concepts – Nation’s Restaurant News

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Be A Spy - Scam Warning Page

Be A Spy - Scam Warning Page

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Hayes International Releases 21st Annual Retail Theft Survey

The retail industry's leading Theft Survey, conducted by Hayes International has released it's 21st annual results!! This report is full of great information including statistics on retail theft gathered by Hayes International on 22 large retail companies with 19,151 stores, and over $570 Billion in sales. In addition, Hayes International expert insight into causes and effects is extremely helpful to the Operations, Loss Prevention, and Finance executives reading this report.

Some key points I found interesting include:

• 72,120 dishonest employees were apprehended in 2008, up 3.01% from 2007
• One in every 30 employees was apprehended for theft from their employer in 2008. (Based on over 2.1 million employees).
• On a per case average, dishonest employees steal a little over 7 times the amount stolen by shoplifters ($969.14 vs $135.81)
• For every $1.00 recovered by surveyed companies, $27.64 was lost to retail theft. Therefore, only 3.62% of total retail theft losses resulted in a recovery. Much room for improvement here.
  
• Survey participants apprehended 832,106 shoplifters in 2008. That is an increase of 7.65% from the prior year.

Survey participants contributed the following to increased employee theft:

1. Enhancements in POS Exception Based Reporting
2. Less management supervision over employees
3. More employees are stealing in the poor economy
4. More focus placed on internal theft cases

Hayes International believes the following contributes to the employee theft problem:

• Ineffective Pre-Employment Screening.
  
• Less Employee Supervision creating more opportunities to commit theft.
• Decline in Honesty.

Attended Jiffy Lube International Franchisee Conference

We had a great time speaking to Franchisees at the Jiffy Lube International Franchise show at the Gaylord National Resort & Convention Center last week in Washington DC. We spoke to franchise owners about the benefits of Mystery Shopping, as well as Loss Prevention solutions we provide to franchisees worldwide.

It amazes me that in 2009, there are still organizations with over 50 retail stores (often times, over 100 units) who still do not focus on the risk of cash and inventory loss, or even recognize these as serious issues. I actually had someone say to me that these issues are the least of their problems, and that they can't even get their staff to ring the sale through the register properly! "Case in point".

We had many positive discussions with other franchise executives who were motivated after our discussion, and looked forward to getting back to their business to implement some of the concepts we discussed. As another Franchisee commented, he views those that don't take the risk seriously, simply as "acquisition targets". That is a very entrepreneurial way for one franchisee to look at others who choose to ignore business risks.