Comprehensive Loss Prevention: Much More Than Random Reactions
A deposit mysteriously disappeared, so instructions were added to the procedures for handling cash and bank reconciliations. A teller was caught stealing. They fired her and hired a replacement after checking her background a bit more thoroughly. There was an act of vandalism, so cameras were installed. Slip and fall accidents were on the rise, so floors are being cleaned more frequently and employees are advised to be more careful when walking on wet floors.
The solutions above are part of a loss prevention program developed as a gradual reaction to problems in retail and restaurant environments. It occurs out of necessity to protect the assets, profitability, and health and safety of the company’s employees and customers. They can provide a short-term solution or act as a band-aid to cover up major underlying problems.
Coordinating efforts to stop the many causes of restaurant and retail profit losses and vulnerabilities to crime requires a comprehensive plan. The plan begins with well-written policies and procedures with clear expectations on hiring, training, cash management, POS procedures, food preparation, merchandise handling, fraud and theft prevention, security, inventory control, and compliance audits.
Police and procedures – Comprehensive and well-written policies and procedures are the foundation of a successful business. It provides the “way of working”, direction and responsibility for everyone in the organization.
Hiring – A productive and compliant workforce begins with a culture that has set clear performance expectations that align with common goals and objectives. Hiring new workers is about finding the right candidate for the right position. Pre-employment assessment, personality assessments, competency tests, and other tools to identify the right employee can be included in a comprehensive loss prevention program.
Training – Once the right person is hired, they need to be trained in the basics like time and attendance procedures and the essential skills needed to do their job effectively and efficiently. They need to know the policies and procedures, have access to a copy, and acknowledge in writing that they understand the company’s expectations of them.
Cash management – If the employee handles cash and / or deposits, they must demonstrate accuracy in cash counting, competence in the operation of the cash register, and responsibility to fully meet expectations of accountability.
Point of Sale (POS) Procedures – Cashiers must follow correct transaction procedures when handling cash and cashless cards. Acceptable limits should be set on variations in cash and cash components, such as no sales, voids, refunds, price reductions, employee meals, and promotions. Managers and supervisors must understand how to use relevant POS system reports to identify training and theft issues. Appropriate disciplinary measures can then be applied.
Food preparation and handling – Proper training in food preparation and handling is extremely important to serving quality products. It also serves to reduce raw and finished waste and plays an important role in maintaining proper inventory control and effective food ordering.
Merchandise handling – Receiving merchandise, preparing it for transfer to the sales floor, and reconfiguring displays requires delicate handling. Accurate pricing and transmission of price reductions is extremely important.
Inventory control – Proper analysis of product sales, first-in, first-out stock turns, and establishing inventory counts for key items are essential elements in effective inventory control procedures. Loss prevention measures include documenting out-of-stock merchandise, food waste, securing and controlling access to the back door, and training all employees on issues affecting low cost of food and food waste. Inventory.
Theft and fraud prevention – External fraud and theft are serious threats not only to the profitability of the company, but also to the health and safety of employees and customers. Employees trained to recognize suspicious behavior and transactions and respond appropriately can minimize fraud activity. They must also be trained in procedures designed to prevent theft and how to respond appropriately during and afterward to minimize the risk of being injured or killed.
Safety – There are many hazards that endanger the health and safety of employees and customers. Wet and greasy floors contribute to slip and fall accidents. Employees not wearing personal protective equipment (PPE) are susceptible to severe burns, cuts, falls, and other injuries that affect productivity and profitability. Improper training can contribute to fire, poisoning, electric shock, limbs caught in equipment, and even death.
Audits – A systematic audit program is a critical component of a comprehensive program. Verify that company policies, procedures and processes are routinely followed and that checks and balances are in place. When rule breaking is determined to be a problem, action plans for correction and follow-up keep activities focused on achieving goals and objectives and deter counterproductive behavior.
Progressive discipline – Effective progressive discipline policies identify and address employee misconduct, poor performance, unacceptable behavior, and policy violations. The seriousness or repetition of a behavior or violation will determine the level of discipline ranging from verbal warnings to dismissal. A consistent and fairly applied progressive discipline program improves performance and productivity.
Safety and protection equipment – All components of a comprehensive loss prevention program above can be applied at little or no cost. The program can be effectively complemented by equipment that improves profit protection and crime prevention. The financial investment will have excellent returns. Exception reporting and data mining software produces valuable information on employee productivity and performance. The software can be integrated with digital cameras to highlight suspicious activity and attach associated video. SMART safes protect funds, greatly reduce working hours when counting cash and preparing deposits, and limit exposure to theft and cash theft. Floor cleaning machines provide greater cleaning power by reducing slippage of tile floors.
Addressing safety and security issues only when they arise is similar to the old arcade game Whac-A-Mole. As the mole appears, it is knocked down, only for it to appear elsewhere and knock down again. The game accelerates faster and faster until the player cannot catch up with it. A comprehensive loss prevention plan is the coordination of programs, techniques, training and equipment to prevent loss of profits and criminal activity from occurring, and to provide the appropriate response to mitigate them if they occur. You’re ready for that little mole, when it shows up. And when you hit it, it’s not likely to show up again, saving you time and energy.
Contact a loss prevention professional such as LossBusters (www.LossBusters.com) to help you with an analysis and your loss prevention efforts. They can then make recommendations that will increase your profitability by reducing your vulnerabilities to the health and safety of your employees and customers, countering productivity and crime. A comprehensive plan is much easier to stick with than trying to figure out what to do next.