The Top 7 Loss Prevention Policies

you cant live without (Retail)

- - - - Policy Myths - - - -

There is a saying that goes,

A verbal contract isnt worth the paper its written on.

The same is true of verbal policies.

Without a clear written policy and procedure, over time employees drift toward their own way of doing things. Written policy ensures a solid foundation to grade compliance, identify training opportunities, and detect dishonesty.

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- - - An Open Door for Loss - - - -

The retail industry reports that over 4 billion dollars a year is lost to mistakes and errors.
Written policy ensures training and guidelines to avoid these losses. In addition, 40 to 50% of all losses are the result of internal dishonesty.

Written policy sets the baseline for recognizing potential dishonest activities.

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- - - - Procedures are not - - - - necessarily policies Most functions of a business include a set of procedures. We have a manual that explains how to process a sale on the POS, or how to turn on and off the alarm. A policy describes the dos and dont within many of these procedures. The rules surrounding the verification needed to process a refund

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- - - - - - Where to begin? - - - - -

If you dont have written policies, then you should begin by creating the most basic. You should consider how to create a process that protects from mistakes or one that will help identify dishonesty.

A refund requires management verification to ensure it is legitimate and to ensure the proper procedure (collection of customer information, original transaction number, etc.) were followed

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- - - - - - Is 7 enough? - - - - -

Most retail operators have far more than 7 policies.

These, however, represent areas where the highest loss occurs and where Loss Prevention professionals spend the majority of their time resolving losses.

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- - - - The 7 Critical Policies - - - -

1 2 3 4 5

Waste
High Risk Transactions

POS Audit and Authorization

Conduct Deposit Damages Access and Egress
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- - - - - Refunds - - - -

Why it is important Refund fraud continues to be one of the most costly methods of employee theft. It has the double impact of loss of cash and inflating book inventory. What to consider In the world of single coverage, our policy has to account for on duty alone scenarios. We also should build our policy based on the advantages and disadvantages of our Point of Sale system. What it should include We should detail what information is requires (name, SKU, receipt), who can process (by position, and what verification is required (signatures, witness, visual inspection of product)
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- - - - High Risk Transactions - - - -

Why it is important High Risk transactions include nosales, voids, employee discounts, and paid-outs. These methods are the primary ones used for front-end dishonesty. What to consider POS limitations and abilities is a critical factor. Also an ability to track drawer openings and audit these transaction types. What it should include Include authorization levels, signatures, reason codes and register key control

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- - - - POS Audit & - - - - Authorization

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Why it is important Although business today experiences more electronic than cash payment, mistakes and theft still occur in areas of cash control What to consider Much like the previous policies, the policy has to contemplate coverage issues and tracking ability. What it should include A clear guideline on authorization, cash auditing, and drawer opening policies.

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- - - - - Code of Conduct - - - -

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Why it is important The culture of a location determines things like integrity, error causing shortcuts, and socially acceptable behavior. A code of conduct provides a clear expectations of unacceptable behavior and the potential response from the company. What to consider Your companys culture and expectations What it should include Include a list of expectations/outcomes related to borrowing money violating policies like discounts, and theft.

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- - - - - Deposits - - - -

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Why it is important Deposit theft and loss is rare, however, when they occur these events are difficult to resolve. A policy provides a record to assist the resolution and also its presence deters loss.
What to consider Coverage, distance to the bank, reconciliation process, and presence of a location safe. What it should include Include a deposit log, verification process, verification signatures, and back records reconciliation

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- - - - - Damages - - - -

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Why it is important A lack of control can result in inventory errors and use of damages to mask theft
What to consider The number of damages in your business, storage space, and your return to vendor frequency. What it should include Include guidelines for authorization, logging and tracking, and storage requirements

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- - - - - Access & Egress - - - -

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Why it is important In order to resolve loss and ensure employee safety, we need to place restrictions on non-employee access. What to consider Coverage, insurance restrictions, hours of operation. What it should include Procedures for entering and exiting the location, restriction of non-employees from stockrooms and after hours, any bag check requirements.

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- - - - - Summing Up - - - -

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The 7 policies set a foundation for good loss prevention practices. They provide a base line for identifying compliance, training and dishonesty issues. If you already have policies you should review them to ensure that they still match any operational environment changes.

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- - - - More Information - - - - -

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To learn more or to discuss specific areas of concern:

Email: Solutions@lpinnovations.com Call: 877-574-6682 Website: www.lpinnovations.com

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