Have we marginalized Loss Prevention?

When one side moves, they all move.

 Any engineer will tell you, “Cost, Specifications, Schedule. It’s a triangle. Adjust 1 side, the other 2 sides move. ” For example, adding more features means your product will be developed later, and cost more. The same goes for Loss Prevention, especially in this economy. We define the LP Triangle as, “Loss Tolerance; Organization; and, Controls.”

What level of cash loss is okay?

“None!” would be the politically correct and unrealistic response. But we are setting ourselves up for disaster. I recently worked with a retailer who used to have a staff of 3, handling LP and Safety. Now, it’s just him . . . and he has the added responsibility of Training! Sound familiar? Talk about skimming the waves . . .

No good choices.

Some say that the 2 steps between honesty and dishonesty are NEED and OPPORTUNITY. No one would argue that “need” is up. Unfortunately, LP staff reductions have also increased “opportunity.” Looking at our triangle’s moving sides, what are the options?

  • Accept higher losses. This may seem more like a consequence than an option. But unless you take deliberate steps, that side of  your triangle will grow. When the bad employees figure out the floor of your investigation threshold has moved, say from $5.00 to $10.00, watch that $500.00 monthly number rise. They may be testing you even as you read this.
  • Protect your assets with technology.Smart-safes and single-control cash procedures limit exposure at store-level. Investing in the most secure, tamper-evident bags to protect cash deposits and shipments will pay big dividends, especially when you communicate to other parties a strong understanding of the protection you pay for. Saving a few pennies to buy bags known in the industry for pre-voiding and false-positives may land you in an indefensible position.
  • Protect your people with training. It’s a chain of custody, not a rope! “Give a signature/get a signature.” Your signature says you accepted an in-tact package with no signs of tampering. Rushing at the check-in window without spending a few seconds in inspection because you are understaffed, or accepting a change order delivery at a store without verifying the integrity of the package is like driving with your eyes closed. You may have accepted the responsibility for any loss associated with a evidence of tampering.

“Shore-leave cancelled until morale improves.”

Lastly, we encourage LP directors to regularly communicate to other senior managers,  factual data that reflects the implications of cut-backs. It’s going to take a while to turn this economy around, with more folks switching from plastic to cash. Are you ready?

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