Beverage Dynamics is the largest national business magazine devoted exclusively to the needs of off-premise beverage alcohol retailers, from single liquor stores to big box chains, through coverage of the latest trends in wine, beer and spirits.
Issue link: https://read.dmtmag.com/i/485350
www.beveragedynamics.com March/April 2015 • Beverage Dynamics 73 Store Security Group, Inc., a risk management fi rm special- izing in the identifi cation of risks, threats and liabilities to business and industry from both internal and external sources, cash manage- ment is more than just verifying deposits and making sure that cashiers are not short. "Think about your business," Alford says. "Virtually everything that a retail busi- ness owner does—buying smart, ordering and receiving merchandise, advertising, merchandising, promotions—is designed to move merchandise through the checkout in order to convert products to cash. So why wouldn't a business owner make sure that the controls are in place to ensure that cash is going to the business and not into the pockets of employees?" Alford says that straight cash theft—like cash shortages and de- posit shortages—can occur, and when they do, there are ways to deal with them to identify the cause(s) and take the appropriate actions. However, cash theft though "register manipulation," (such as voids, refunds, item corrects, no sales) and cash offi ce fraud (i.e. cook- ing books) can bring a small business to its knees. "Your inventory will be 'short' and you will be looking for ways that cases of inventory 'walked out of your doors,'" Alford says. "And the scary part of this scenario is that most small businesses discover such fraud situations by accident, only after the person committing the fraud gets lazy or careless and the dollar amounts get ridicu- lous." Recently Alford learned about a small nine-store chain where a 15-year employee admitted to stealing over $25,000 by ringing up fraudulent bottle refunds. "The business discovered the fraud after they changed the em- age, miscounts, misplacement, breakage, or cashier error." A few best practices in controlling in- ventory and reducing shrink include using EAS systems to deter theft of merchandise, video surveillance to manage the activity in the store and using stored video as case management evidence to understand error or deviant behavior. "One newly trending technology is RFID (radio frequency technology), which is the practice of attaching smart tags to merchan- dise. Then it can be read with handheld read- ers or fi xed point readers upon entry the store, periodically in the store with cycle counts, and read on exit or at POS," Sell says. "This technology gives a retailer real time accounts of inventory down to the item level. However, RFID has not been adopted by liquor retail- ers to date as a mainstream tool. MANAGING THEFT While frequently taking inventory helps manage loss, there are also certain situations that should trigger management to monitor video while a theft might be taking place. For example, customers wearing jackets to conceal items in warmer weather is an obvious sign that a theft may occur. One area Tyco Integrated Security helps with is the theft behavior known as "sweet hearting," where cashiers are not scanning or ring- ing up items through POS and they pass items unpaid to customers for personal gain or as an illegal favor to customers. Cash management is another key concern for beverage retailers. According to William Alford, president of International Lighthouse Various brands with security caps from Loss Prevention Systems. Questions to Ask Steve Sell of Tyco Integrated Security says there are fi ve key questions retailers should ask themselves about employee and consumer theft: What impact does organized crime have on retail theft and how can I minimize it? Organized retail crime (ORC) is a major threat that accounts for a large share of the $35 billion in theft occurring annually. ORC rings are prev- alent across the country and offer the most serious threat to retail. To offset, one must understand that ORC steals in volume, so deploying shelf technology that deters shelf sweeps of large volumes of product is a strong strategy along with EAS and video. Also, being informed about regional crime activity helps with readiness to prevent. What trends in video are most popular? Moving to IP video (internet protocol) and higher pixel rate cameras offers retailers improved vigilance and also post-theft investigative tools. The new IP tools also allow more freedom in access remotely with bet- ter storage and retrieval. Also, facial recognition technology is growing and is enabled by higher quality video. How is RFID being used for loss prevention? Today most RFID use cases are focused on inventory management to improve sales and accuracy of display to drive sales. The next step is to use RFID to get more specifi c on what is stolen and drive real-time ID of theft. Although this is a key way to gain insight on theft, we are not quite there yet with heavy adoption for this purpose. Is EAS still effective after many years of use? Yes, it is very effective and there are many cases of retailers installing EAS to see reduced shrink, then later removing it only to see shrink rise again. The proof and ROI on the technology is time-tested. What is the best way to manage theft in my store environment? The best way is to deploy a thought-out plan with an integrated strategy of multiple techniques and technologies that fi t your envi- ronment. Most impor tantly, demand compliance on response and practice of deterrence by your employees. A great plan and invest- ment in technology is useless without compliance.