A deposit mysteriously disappeared, so instructions were added to cash handling procedures and bank reconciliations. A cashier was caught stealing. They fired her and hired a replacement after doing a bit more background check on her. An act of vandalism occurred for which cameras were installed. Slip and fall accidents were on the rise, so floors are being mopped more frequently and employees are being advised to be more careful when walking on wet floors.
The above solutions are part of a loss prevention program developed as a phased reaction to problems in the retail and restaurant environments. It occurs out of necessity to protect company assets, profitability, and the health and safety of employees and customers. They can provide a short-term fix or act as a band-aid to cover up major underlying issues.
Coordinating efforts to stop the multiple causes of restaurant and retail profit loss and vulnerabilities to crime requires a comprehensive plan. The plan starts 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.
Policies and procedures – Complete, well-written policies and procedures are the foundation of successful businesses. It provides the “way of work,” direction, and accountability for everyone in the organization.
hiring – A productive and compliant workforce begins with a culture that has established clear performance expectations that align with common goals and objectives. Hiring new workers is all about finding the right fit for the right position. Pre-employment screening, personality assessments, competency tests, and other tools to identify the right employee can all be included in a comprehensive loss prevention program.
Training – After hiring the right person, they need to be trained in basics such as 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 counting cash, proficiency in operating the cash register, and responsibility in fully meeting accountability expectations.
Point of Sale Procedures (POS) – Tellers must follow proper transaction procedures when handling cash and cashless cards. Acceptable limits must be established on cash variances and cash components, such as no sales, voids, refunds, price reductions, employee meals, and promotions. Managers and supervisors need to understand how to use relevant POS system reports to identify training and theft issues. Appropriate disciplinary action can then be applied.
Food preparation and handling – Proper training in food preparation and handling is extremely important to serve a quality product. It also serves to reduce raw and finished waste and plays an important role in maintaining proper inventory control and effective food ordering.
Merchandise Management – Receiving merchandise, preparing it for transfer to the sales floor, and reconfiguring displays requires delicate handling. Accuracy in pricing and passing on price reductions is extremely important.
Inventory control – Proper analysis of product sales, first-in, first-out stock rotation, 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 back door access, and training all employees on issues affecting low food cost and reduced of inventory.
Fraud and Theft Prevention – External fraud and theft are serious threats not only to company profitability, 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 injury or death.
Security- 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 serious burns, cuts, falls, and other injuries that affect productivity and profitability. Improper training can contribute to fires, poisoning, electrical shock, limbs caught in equipment, and even death.
Audits – A systematic audit program is a critical component of a complete program. Verifies 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 supplemented with equipment that enhances profit protection and crime prevention. The financial investment will have excellent returns. Exception reporting and data extraction software produces valuable insight into employee productivity and performance. The software can be integrated with digital cameras to highlight suspicious activity and attach associated videos. SMART safes protect funds, greatly reduce labor hours on cash counting and deposit preparation, and limit exposure to theft and cash theft. Floor cleaning machines provide increased cleaning power by reducing slippage on tile floors.
Addressing safety and security issues only when they arise is similar to the old Whac-A-Mole arcade game. As the mole appears, it is hammered down, only for it to appear in another location and is hammered back down again. The game speeds up 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 criminal and profit-draining activities from occurring, and providing the appropriate reaction to mitigate them if they do occur. You’re all set for that little mole, as long as it shows up. And when you hit it, it’s not likely to reappear, saving you time and energy.
Contact a loss prevention professional, such as LossBusters (www.LossBusters.com) to help you with analysis and your loss prevention efforts. They can then make the 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 to than trying to figure out what to do next.