Comprehensive loss prevention – much more than random reaction actions

Comprehensive loss prevention – much more than random reaction actions

A deposit mysteriously disappeared, so instructions were added to cash handling procedures and bank reconciliations. They caught a cashier stealing. She was fired and a replacement was hired after doing a little more background check on them. An act of vandalism has occurred, so cameras have been installed. Slip and fall incidents are increasing, so floors are being cleaned more often 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 partial response to problems in retail and restaurant environments. This happens because of the need to protect the company’s assets, profitability and the health and safety of employees and customers. They can provide a short-term solution or act as a Band-Aid to mask underlying underlying problems.

Coordinating efforts to stem the multiple causes of retail and restaurant profit leakage and vulnerability to crime requires a comprehensive plan. The plan begins with well-written policies and procedures with clear expectations for hiring, training, cash management, POS procedures, food preparation, merchandise handling, fraud and theft prevention, safety, inventory control, and compliance audits.

Policies and Procedures – Well-written and comprehensive policies and procedures are the foundation of a successful business. It provides a “way of working”, direction and accountability for everyone in the organization.

Hiring – A productive and engaged workforce begins with a culture that has established clear performance expectations that align with shared goals and objectives. Hiring new workers is all about finding the right fit for the right position. Pre-employment screening, personality assessments, skills testing and other tools to identify the right employee can be incorporated into a comprehensive loss prevention program.

training – Once the right person is hired, they need to be trained in basics like time and attendance procedures and the basic skills needed to do their job effectively and efficiently. They should know the policies and procedures, have access to a copy, and confirm 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, skill in operating a cash register, and responsibility for fully meeting accountability expectations.

Point of Sale (POS) Procedures – Cashiers must follow proper transaction procedures when handling cash and cashless cards. Acceptable limits should be established on cash variances and cash components such as no sales, cancellations, refunds, price reductions, employee meals and promotions. Managers and supervisors must understand how to use relevant reports from the POS system to identify training and theft issues. Appropriate disciplinary action may then be taken.

Food preparation and processing – Proper food preparation and handling training is critical to serving a quality product. It also serves to reduce raw and finished waste and plays an important role in maintaining proper inventory control and efficient food ordering.

Processing of goods – Receiving merchandise, preparing it for transfer to the sales floor, and reconfiguring displays requires delicate handling. Accuracy in pricing and communicating price reductions is extremely important.

Inventory Control – Proper analysis of product sales, first-in-first-out inventory rotation, and establishing an inventory of key items are essential elements in effective inventory control procedures. Loss prevention measures include documenting out-of-stock items, food waste, providing and controlling access to the back door, and educating all employees on issues affecting low food cost and inventory shrinkage.

Fraud and robbery prevention – External fraud and theft are serious threats not only to a company’s 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. They should also be trained in procedures designed to prevent robberies and how to respond appropriately during and after to minimize the risk of injury or death.

safety – There are many hazards that threaten the health and safety of employees and customers. Wet and greasy floors contribute to slip and fall incidents. Employees who do not wear 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, electric shocks, entrapment of limbs in equipment, even death.

audits – A systematic audit program is a critical component of a comprehensive program. It verifies that company policies, procedures and processes are routinely followed and that there are checks and balances in place. When noncompliance is identified as a problem, corrective and follow-up action plans 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 rule violations. The seriousness or repetition of the behavior or violation will determine the level of discipline, ranging from verbal warnings to termination. A consistent and fairly applied progressive discipline program improves performance and productivity.

Security and safety equipment – All of the components of a comprehensive loss prevention program above can be implemented at little or no cost. The program can be effectively supplemented with equipment that improves profit protection and crime prevention. The financial investment will have an excellent return. Data mining and exception reporting software provides valuable insight into employee productivity and performance. The software can integrate with digital cameras to highlight suspicious activity and attach related video. SMART safes protect funds, significantly reduce man-hours for counting money and preparing deposits, and limit exposure to money theft and robbery. Floor cleaners provide greater cleaning power by reducing the slipperiness of floor tiles.

Addressing security and safety issues only when they arise is akin to the old arcade game Whac-A-Mole. When the mole appears, it gets stuck, only to pop up somewhere else and get stuck again. The game speeds up faster and faster until the player can’t keep up. A comprehensive loss prevention plan is the coordination of programs, techniques, training, and equipment to prevent profit siphoning and criminal activity and to provide the right response to mitigate it if it occurs. You’re ready for that little mole if and when it shows up. And when you hit it, it’s unlikely to respawn, saving you time and energy.

Contact a loss prevention professional such as LossBusters ( to assist you with analysis and your loss prevention efforts. They can then make recommendations that will increase your profitability by reducing your vulnerability to the health and safety of your employees and customers, counter-productiveness and crime. A comprehensive plan is much easier to maintain than trying to figure out what to do next.

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