Daily Controls for Year-End Profits: Getting Back To Loss Prevention Basics

As we begin this new year, let’s all make a commitment to keep shrinkage control a daily duty and priority within our store, warehouse or distribution center location. While some losses may occur at inventory time (due to an inaccurate count or misidentifying merchandise), the greater majority of losses occur throughout the year.  From the moment product arrives at your location via a DC shipment, direct vendor shipment, company transfer, drop shipment, etc. until it is received by our customers, or returned to the supplier / manufacturer, there are many opportunities for loss to occur.  So let’s start the year off right by checking to ensure that your location is consistently doing ‘the basics’, day in and day out. We believe this is one of those areas that management sometimes takes for granted as being completed and complied with, since most companies have policies and procedures in place to address these ‘basic’ loss prevention/shrinkage control issues. Yet, our experiences consistently show that many locations, especially those with high losses, fail to properly implement, maintain, or consistently comply with ‘basic’ loss prevention policies on a daily basis.

Here are just a few LP “basics” you should be complying with on a daily basis.

  • Receiving Process:
    It all starts with the accuracy of inbound freight/product. If we don’t accurately account-for incoming freight our inventory accuracy will likely be off all year long. Follow your company’s receiving policy and promptly report any shortages, overages or damages you identify.
  • Transfer / Delivery Process:
    When shipping or delivering merchandise it is most important to ensure items leaving your location are accurately picked/pulled, packaged and then accounted-for in the system. Always double check for picking accuracy before finalizing any transfer or delivery.
    Being “in a hurry” is not a good reason for an inaccurate inventory.
  • Damaged/Defective Product:
    Product being returned due to being damaged or defective, or items found damaged/defective in your location, must be treated the same as a good saleable item. Therefore, carefully check-in and process all damaged/defective product to ensure its correct disposition.
  • Pre-Employment Screening:
    Prior to hiring new employees, ensures your company’s pre-screening requirements are fully complied with to assist in hiring only honest and quality employees.
  • LP Training:
    New Hires:Ensure all new-hires are familiar with your location’s Loss Prevention/Shrinkage Control Program, and all company policies/procedures relating to merchandise accountability and security are thoroughly reviewed with them. Current Employees: Ongoing loss prevention/shrinkage control materials should be regularly provided to, or reviewed with, all employees. This would include newsletters, monthly messages, security briefs, confidential 1-800 reporting lines, etc.
  • Door Controls:
    Back Doors: All back/emergency exit doors should be protected by a functioning local alarm-lock which is ‘set’ at all times thus prohibiting unauthorized use of these doors to walk or pass-out merchandise
    Overhead Doors: These doors should be closed and padlocked when not in actual use. This will prevent someone from entering the location thru an open OH door, and also prohibit the passing-out of merchandise.
    For Specialty Stores and locations with single employee coverage:
    Customer Entrance/Exit Door: This door/entryway should have a have a working bell/chime that sounds on both the sales floor and in the stockroom that alerts employees when someone enters or exits the store.
    Stockroom Doors: The stockroom door(s) should always be kept closed, and have a chime/bell affixed to sound when the door is used.
  • Package/Bags Checks:
    All employees (including management) should have any  package/bag/lunch box they are carrying consistently inspected immediately prior to exiting the location.
  • Trash Removal:
    Trash contents should be inspected by a management/2nd person immediately prior to removal to check for intentionally or unintentionally concealed merchandise. In addition,  boxes/cartons should always be flattened prior to removal, and clear trash bags used in all trash receptacles.
  • POS Transactions:
    Critical POS transactions such as refunds, voids, price overrides, etc. should be consistently verified at the  time of occurrence by a management/2nd person.
  • Customer Service:
    All customers should be promptly greeted upon entering and then  approached and offered assistance. Employees should not be so task oriented that they get tunnel vision and ignore customers walking about the sales floor.

These are just some of the ‘basics’ when it comes to practicing good loss prevention on a daily and consistent basis. Remember, daily controls will result in positive year-end profits.  Now go have a great 2011!   $

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