Cat and Mouse
Driven by erratic bounces in month-to-month and year-to-year fuel margins, which have formed a discouraging and obvious long term downward trend line, and facing a similarly unpredictable dilemma on the expense side of the equation with uncapped, runaway credit card fees, retailers are once again focusing on controlling shrink at store level to show a profit. Not that this is a novel approach. Retailers have long understood that better than 75% of losses come from the very people they trust to provide superior customer service. For fear of losing their job and the only source of health and other benefits that come with it during this two year recession period, some store employees have re-thought the “rationalization” for stealing and moved it down their priority list behind eating and having a roof overhead. The “motivation” and “opportunity” still exist for those inclined. But as long as retailers accept cash for cigarettes, beer and merchandise, employees will be creating ways to take a little extra cash home.
Not your Mom and Pop’s Technology
Handling customer transactions today requires a level of sophistication that is not uncommon for the twenty-something crowd that staffs most retail/restaurant operations, even the lesser educated. Most point of sale systems that comply with PCATS standards and are PCI compliant are loaded with functionality that didn’t exist with the cigar box. Regardless of the system, any good loss prevention person worth their weight in audit skills will tell you that it is about finding the “who” behind the losses – putting a name to the dollars lost. Industry hardware and software solution providers developed this generation of store tools to help retailers find the “who.”
Business Intelligence and Predictive Analytics
Loss prevention is now loss predicting. Technology and the tools available for convenience/petroleum retailers have changed the game. Industry solution providers have developed robust software packages, integrated pos models, and reporting that can pinpoint with fair certainty after only a couple of shifts if an employee is getting the money to the register. Analyzing employee register behavior today is like monitoring theft tracks on steroids. Guessing is eliminated from the equation and the documentation is ready-made. Today’s LP is predicting employee behavior. Predictive analytics is expanding to allow industry LP professionals to communicate with field operations more effectively, handle triple the number of stores, and deliver lower losses. When the recession finally ends and store employees return to normal levels of rationalizing theft, the retailers who have invested in current loss prevention technology will surely get more money to the bank.