“2012 research by FMI and The Retail Control Group into the ‘causes and cures’ of retail supermarket shrink indicates that 64% of store shrink is directly caused by a breakdown in or the absence of effective store operating best practices, while 36% of store shrink is cause by theft and/or misdeeds.    (Retrieved from http://www.theshrinksurvey.com/)

All retail business managers need to put together procedures for each practice for which they delegate to an employee; a written direction that both they and the employee can refer to during the course of business. For instance, accepting deliveries from UPS, FedEx, etc need a procedure to follow to allow for tracking of missing shipments.

When a UPS delivery is made, the receiving document must be marked with the time, date and the full legible signature of the receiver.   This document must be kept with the shipment until checked in by authorized employee.  Said employee will initial and date receiving document before sending to accounting.

This short document will suffice as your Best Practice.  Each employee who would normally receive UPS deliveries would be given a copy.  They would sign off as understanding their role in this procedure.  There is less chance of the delivery going missing if proper procedures are followed.

At LPC, we assist in developing your own best practices and then train your employees to implement them.  Combat shrink – take control of your own business practices!

Fraudulent Donations

You run a small grocery store and are asked by an association – i.e. Girl/Boy Scouts, State Youth Organization – to set up a table by your doors to solicit for donations.  You have heard of the group, you see the logo around town, so WITHOUT CHECKING THEM OUT you allow them to set up and “sell” candy bars for the weekend.  Because you have them in your store, your customers believe that they are who they are advertised to be.  BUT, on Monday one of your customers reports to you that those in your store over the weekend had no affiliation with the local organization.  Wondered why they were in your store.

ALWAYS check out organizations with the State Chapter.

Short Change Artists

With the beautiful weather and easy traveling, you may notice an increase in easy, quick scams from strangers.  The more popular is the short change artist whose targets are frequently those cashiers operating self-scanning or express checkout lanes. These criminals can easily, quickly and fluidly extract over one hundred dollars from an unaware and untrained cashier.  Any transaction that requires change in excess from that noted on the receipt should be a “Red Flag”.  If the cashier becomes confused or the customer becomes threatening or belligerent, the cashier should be given the option of locking down her register and asking her supervisor for auditing assistance.

You are focusing on something other than your surroundings – music, phone, standing in front of a self serve  kiosk – your attention is diverted elsewhere and criminals will take advantage of your inattention.  We all have been made aware of ATM robberies and usually make sure we are alone and no one is nearby when we pull out our wallet.  But have you thought about all the other times you are really in the same position –

ATM

RedBox

Postal Self Serve Machines

Coffee or Candy kiosks

Anytime you are pulling out your wallet – be aware of your surroundings, folks walking by, parked cars, other customers that are attempting to make you rush (you are more likely to leave your charge card).  The more isolated the kiosk location the higher the risk – try to find locations in busy malls or streets.

Tide liquid  is now one of the top shoplifted items.  It is ranked with baby formula, razor blades, batteries, high end cosmetics, etc.   Shoplifters and Boosters are using Flea Markets and Swap Meets to sell these items.  Now that the summer is nearly upon us, theft will increase as there are more places to sell the stolen products.  Limit the amount of these high shoplifted items that are out on the shelf.  Do not allow more than 3 to 5 items to be available at one time.  Items can be restocked during the day to make sure product is available for your customers.  When the shoplifters or boosters realize that they can’t take many at one time, they will go someplace where they can.

It no longer is difficult to hire associates.  They line up long before the door is open.  You speak with them, they sound like great folks and you offer them a job.  In this economy, you must take precautions in hiring.

• You MUST call all references on the application AND prior employers.
• You MUST verify either with the local police or a company that handles criminal history inquires that your new applicant is trustworthy
• You MUST do at least a five screen drug test

An employee can steal more from you in three months than shoplifters can steal in a year.  An employee is responsible for assisting in preventing shrink or assisting in causing it.

You must take steps to make sure that the check your employees are accepting is legitimate.  There are a few easy Red Flags that can signify a problem. Do they know them?

• Are all the words spelled correctly?
• Does the signature match the name?
• Is the bank name on the check and should not be a xx.com.
• If the customer provides a Michigan I.D. rather than a driver’s license, are they there with a driver?
• Are they purchasing easily resold products – alcohol, gift cards, cigarettes, baby formula?

With our training, we go over many more Red Flags and make sure that your employees are knowledgeable and know your Best Practices on Check Acceptance.

If a business sells money orders, send wire transfers or cash checks for cash, the I.R.S. requires the business have an Anti-Money Laundering Policy.  In fact, many businesses are surprised when the I.R.S. sends them a letter indicating a review of their policy is forthcoming.  The I.R.S. will verify the policy fulfills government guidelines as well as auditing all transactions for compliance.  The Title 31 Exams are becoming more aggressive and fines are more common.  Now is a good time to review the government website and make sure your program is following all requirements.

Feel free to post questions regarding any of these processes.

Educating your employees in shrink prevention is the best method to reduce loss.  If your employees do not know what you expect nor what to look for, you are losing