Presentation on theme: "Loss Prevention, Risk Management and Theft Businesses must deal with theft daily. There are two types of product theft, employee and shoplifter."— Presentation transcript:
Loss Prevention, Risk Management and Theft Businesses must deal with theft daily. There are two types of product theft, employee and shoplifter
Shrink is the enemy Most retailers experience about a 2% shrink rate. Department Stores 2.18% Drug Stores 2.33% Mass Merchants 1.82% Apparel 1.84% Hardware 1.98% Supermarkets.93% ?
Shrink is missing product After an inventory, shrink turns up on the closing inventory as a negative number. It is theft if it is still not found.
Supermarkets have half the shrink as other retailers Two reasons: 1.People prefer not to steal food, as opposed to electronics or DVDs. 2.Employees are treated better in the supermarket business compared to other retailers.
Up to 90% of all product theft is from employees Employees know where the good stuff is and how to get it out of the business.
According to a University of Florida study, Over 1/3, 35%, of all employees say that they have stolen from their employer.
The most common way in which employees steal is Discounts to friends and family. “Hey hook me up!”
To control employee theft, There is five things businesses can do. 1.Improve the quality of your employees 2.Participation Management 3.Awareness programs 4.Reward Systems 5.Control employees
Improving employees means Drug test employees. Employees with drug habits tend to steal. Background check employees. People who have stolen once might steal again. Require good interviewing practices. Have credit checks on employees. People who owe a lot of money tend to steal.
Participation Management is Is a theory developed by W. Deming a Columbia University Professor. To quote Deming the theory works on the belief that “Dogs don’t bite the hands that feed them.”
In Participation Management, Employees are to “feel” as though they are part of management. Businesses should: Pay employees better. Require that all employees make suggestions regularly. Give employees great job titles Employees are to participate in stock purchases and profit sharing
Awareness Programs Talk about what would happen if caught stealing. “What would your mother, wife or children think if you were fired for stealing?”
A Reward System pays Employees for helping management to find thieves. A $100.00 reward is nothing for a business to stop what might be stolen.
A Reward System stops employee theft by: Suggesting that employees might tell management about what they saw. A Reward System should be done in conjunction with a 1(800) # for anonymous tips
Control Employees Employees should come in and out of designated doors Employees should be allowed only in specific areas Employees should never be given Keys (Only Management should carry keys)
Control Employees Employees should not be able to come in on their day off. Employees should never be given combinations to safes. Cashiers should have personal sign-on passwords and tills should be counted in and out after every register change.
Shoplifting Is a problem, but remember employee theft is a bigger threat.
Most commonly shoplifted items are: Razor blades and shaving products. Cosmetics, especially face creams and perfumes. Wii and other gaming systems. Alcohol. Meat. Satellite navigation, or GPS, systems. Brand-name clothes, purses and accessories. Infant formula. Some stores lock up powdered formula, which is not only sold on the black market at a higher price but used to cut drugs. Who knew? powdered formula Watches.
According to a study by the National Retailers Association, When Shoplifters and Retail Managers were asked, on a scale of 1-10,(10 the most effective) rate the effectiveness of these theft deterrents? They responded: Retailers Shoplifters Product EAS tags 2 1 Trained employees 1 2 POS Systems 3 1