Closing the Door on Retail Loss

Many of Loss Prevention’s greatest challenges lie in the details. Significant losses can stem from a single, simple miskey, misinformation, or other seemingly small source that is then multiplied throughout the organization. Responsible for shrink reduction, compliance, operational efficiency, safety and security management, some of the finest LP professionals are extremely talented at understanding the “big picture,” and building processes and procedures designed to streamline processes for maximum effectiveness. However, bridging the gap from corporate policies on paper to in-store implementation can prove challenging.

Consider the following scenarios that exemplify the problem.

• A sale item is incorrectly marked down at the aisle, reading $19.99 instead of $49.99. When customers approach the register, the item scans at $49.99 but then customers show the cashier the sign for $19.99. Time and again, the cashier overrides the price, never reporting the problem, racking up losses with every transaction, until the problem is identified via an exception report generated and evaluated nearly two weeks later.

• A busy store manager is walking through the store, preparing for opening in 15 minutes. She notices that a PVM in the cosmetics aisle is not working properly. She is in the middle of pulling cash for the registers and thinks to herself that she will ask the LP manager to look at the PVM. While returning to the register, an employee approaches her about a problem, and she forgets about the PVM, which is not re-identified and addressed until after a theft incident occurs and is not captured on video.

• Inventory is received at the back of the store. The manager is busy and unable to take time to spot-check the inventory, as is standard process. Turns out, many of the boxes in a shipment were damaged in transit, resulting in thousands in losses that can no longer be posted as a claim to the vendor.

These are just a few examples of the hundreds of common scenarios causing loss in stores. The problem is two-fold: the failure to follow-up on exceptions or issues immediately when they occur, and the failure to implement best practices consistently in stores. Halting the ripple effect of losses reverberating throughout the retail organization requires consistent implementation of processes, as well as quick and complete follow-up.

The key to successful implementation of corporate policies and procedures in the field is precision follow-up. When processes and procedures are effectively implemented, the window of opportunity for loss gets smaller and smaller. Unfortunately, the disparate nature of managing implementations across many stores and employees means that executing precision follow-up is not as easy as one may think. It requires consistent documentation of exceptions, collaboration with the correct individuals, and tasking of action items through to resolution. So what does precision follow-up look like? Again, the best way to approach it is to keep it simple. Here are some best practices to keep things on track.

Escalate the exceptions. When exceptions occur, as in the case of the cashier who kept being asked by customers to conduct a price override, it is important to immediately document and share that exception for investigation. That usually means having some kind of technology solution, or simple process in place for capturing and reporting the issue. The key is to note and pass exceptions on to the appropriate managers as soon as possible. This is not rocket science; just a matter of good processes, a dependable system, and the proper training and practice.

Leverage mobile technology. Employees, store managers or auditors often note Issues in real-time, as they are working in the store on other tasks. The passage of time, distractions or other issues can easily crop up, causing the problems identified to fall out of sight and out of mind. However, arming employees with mobile technology and timely reporting capabilities gives them ability to capture issues instantly, and send a reminder or action item to the right person or department.

Automate follow-up. Without processes for tracking action items, assigning them to the appropriate individual, and following-up to make sure action was taken, many more issues fall between the cracks. Ensuring that action items come full circle is largely a matter of having a system that enables assigning a task to a specific individual to get accountability, and then tracking status until the item is completed.

Conduct regular audits. Proactively verifying and documenting that recommended processes, procedures and best practices are implemented across all stores on a consistent basis is most easily accomplished with an audit. Audits can identify compliance problems, trigger the creation of action items, and measure progress over time. The key is creating audits that measure the correct things, and are simple for auditors to complete.

Andrew Wren serves as chief executive officer of Wren Solutions, a loss prevention technology provider, helping leading retailers reduce loss and increase profits. Wren is responsible for corporate and product strategy, leveraging his more than two decades of security technology expertise. To learn more about Wren Solutions, visit