2017Issue6_Alabama_v9.indd

BY DAVID GEORGE

Fraud? Behavior problem. Paperwork and administrative errors? Behavior problem. If this seems like common sense, don’t be so sure. Many shrink-reducing solutions on the market are designed to detect loss rather than prevent it. Sure, one can argue that detecting and resolving a loss-causing issue lends itself to preventing loss, but modifying behavior to the extent that losses are truly prevented from occurring in the first place is truly the only thing that can get us to a loss prevention dream state. MODIFYING BEHAVIOR Behavior modification is not just a significant part of the most successful loss prevention and asset protection programs. It is the entire root system. Although many shrink-reducing solutions do have the potential to play in the behavior modification sand box, supplemental programs typically have to be created to support them. For example, POS Exception reporting software solutions are designed to identify losses caused by dishonest employees, training issues and systemic pricing issues However, some of the most successful loss prevention programs maximize their POS Exception reports by also rewarding cashiers for things like low item voids, high rings per minute and other metrics their respective organizations deem important. This not only increases morale, but also lets cashiers know that a system is in place to monitor their activity. Modifying behavior is the most important attribute of any loss prevention program. Employees not only need to be told what is expected of them, but they also need to be inspired to actually do what is expected of them.

Therefore, we have to change the way we think about shrink causation before we can even begin to consider which solutions would deliver the best results. Changing the way we think must start with identifying commonalities within shrink causation categories. First, let’s consider the typical epidemics contributing the most to shrink: external theft (shoplifting), internal theft (employee dishonesty), vendor fraud and paperwork/administrative errors. Is there any one thing that can be identified that each of these categories share? THE COMMON CULPRIT In a recent article entitled “Shrink: A Roundtable Discussion” by Len Lewis, Al Hrubeniuk of Smart & Final Stores says, “We’re also getting into exception reporting systems and analysis to identify abnormal behavior and trends with register transactions as well as electronic shopping cart containment systems and technology that prevents bypassing payment at the registers.” In another article, “Aligning Loss Prevention with CEO Goals” by Larry Miller of Smart Retail Solutions, she says, “When we see our BIG every day and understand the mandate to be sales driven, we can help to change the operational thinking and behaviors associated with profit optimization.” Still not convinced? Then perhaps this quote found within an article by Cassandra Pye, “Workplace Harassment: Low Profile, High Price Tag,” will push you over the edge: “You want your people to know you’re holding them to the same standard of behavior that you have.” Let’s break it down in the simplest form possible: Shoplifting? Behavior problem. Employee theft? Behavior problem. Vendor

Those of us who have had the privilege of serving the complex world of grocery have had to master the ability to squeeze large financial returns from miniscule financial means. With profit margins so thin, executives within the grocery vertical are forced to make tough decisions on a daily basis, forcing asset protection executives to follow suit. Spending the majority of my career in asset protection within the grocery arena, I understand the complexities of building a successful loss prevention program with minimal resources. With a vast array of shrink-reducing solutions available in the marketplace, choosing the best solution in which to invest can be an extremely daunting task. Most, if not all, of the available solutions will deliver a positive financial return. However, it is incumbent upon the asset protection executive to ensure their capital investment is providing the greatest return. SOMETHING TO PONDER Imagine as an asset protection professional you were only provided enough budgetary dollars to invest in one solution to reduce shrink. Which would you choose? Be careful not to answer too quickly. Each of us have at least one success story in which we implemented a shrink-reducing solution and received better than expected results. However, that doesn’t necessarily mean the chosen solution delivered the best possible financial return relative to the amount of capital invested. The truth is it’s impossible to know with certainty whether a particular shrink-reducing solution delivered a greater return over all other possible solutions unless each solution available was implemented and the results analyzed.

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