Whether it’s employee theft, a robber, skimmers or other individuals intent on shrinking your profits, employing modern preventive means and methodologies is crucial in protecting your employees and your business.

By Erin Rigik, Senior Editor

In the convenience store industry, a combination of best practices and technology are assisting c-store operators in reducing shrinkage problems.

A recent study from The National Retail Federation (NRF) and the University of Florida found that retail inventory shrink cost U.S. retailers $44 billion in 2014. Of all shrink occurrences, shoplifting accounted for 38%, 34.5% was linked to employee and internal theft, administrative and paperwork errors accounted for 16.5%, vendor fraud or error caused 6.8% and 6.1% was attached to unknown loss.

Because those kinds of numbers can erode profit margins quickly, c-stores are on guard to protect their enterprises.

For instance, Flash Foods, which operates 171 convenience store locations in Georgia and Florida, has invested significantly in security tools during the last few years.

“Employee theft will always play a major role in any company, not just the employee stealing, but also who else they are allowing to take product without paying and simply turning a blind eye to it,” said Dale Williams, director of quality assurance and internal controls for Flash Foods. “With our item-level inventory system we are able to see exactly what we have on hand at most any given time so if something looks ‘off’ we are able to investigate that here and now.”

Flash Foods uses such item-level inventory reports to drill down and look at what each associate has sold on his or her shift and if a price override was done after an item was scanned. It can also show no sales, item returns and voids.

“Our digital surveillance system shows text of what product is sold and allows us to look at video and compare what is captured on the register,” Williams said. “This brings to light any scanning issues.”

Store associates are aware the reports are generated and reviewed daily. If there are any employees contemplating stealing, “I feel this makes some of (them) stop and think that the chances of stealing and getting caught may be too high,” Williams said.

BATTLING EXTERNAL THEFT
Of course, not all threats of theft are restricted to just internal forces. External theft can be an even bigger issue for c-store retailers and can happen in a variety of ways from fuel theft to card skimming to hold-ups.

“As for the fuel-ground theft, it can range from pulsars being disabled on pumps to someone siphoning it out of your tank,” Williams said. “With these we are able to see in-ground inventory, so we get an alert if ground inventory starts dropping and no pump is in use.”

Skimmers can pose an even bigger problem because they are constantly evolving, making outsmarting them a challenge. Newer pumps at Flash Foods shut down automatically if a card reader is tampered with.

For older pumps, boxes are placed in the card reader so thieves can’t connect anything to the reader or open the pump without an alarm going off and employees receiving an alert, which they must acknowledge before returning to their normal screen.

Another preventive measure Flash Foods has implemented is security strips on the pump that show if one is opened by someone, who doesn’t have company authorization.

“We require our managers and associates to check inside all pumps twice a day for anything that ‘does not belong” and to report anything they find,” Williams said.

Flash Foods’ c-stores are equipped with panic buttons close to the registers, which can be pressed if help is needed, be it a robbery, a fire or someone inside the store who requires immediate medical attention.

ROBBERY PREVENTION
Employee training, best practices in cash management and keeping up to date on the newest technology can help c-stores keep employees safe and stores secure during the threat of a robbery.

Bon Moraca NRF vice president of loss prevention, told CSD the first issue all c-store retailers should address is the amount of cash in the register, an issue that’s not as easy as it seems.

“This is something that retailers are struggling with today, because people are using bigger bills, for which retailers need to be able to make appropriate change,” Moraca said.

What’s more, when a store gets a rush of customers, dropping money into a safe doesn’t come to employees’ minds immediately.

Also, using an armored car service is one potential fix. Armored car services can deliver cash to the store and pick it up, and the price point on such services is decreasing thanks in part to technology. This takes the responsibility for making bank deposits away from employees, increasing their safety.

Another option is to install a smart safe that tallies money as it is fed into the safe. Today, many safes require an electronic dual control to open them, making it impossible for clerks to open the safe. “Any would-be either opportunist or robber or career criminal that comes into the store knows that,” Moraca said.

This type of passive resistance—where employees either cannot access money from the safe or must wait so many minutes to receive money in small increments—does not seem to trigger additional violence or create a higher risk for the employee, Moraca said.

Smaller c-store chains that can’t afford an armored car service or smart safes can still do much to prevent theft by using drop safes that can’t be opened and controlling the amount of cash in the register.

CANDID CAMERA
Once best practices in cash handling are in place, the next step is properly monitoring the store. Today, video cameras themselves as well as video monitoring systems that allow retailers to drill down to see voids and other transactions, can do much more than in years past.

“I’m a big believer in customer facing store monitors, where customers walk in and see themselves on the monitor and know they are being recorded,” said Moraca. “I think that is a large deterrent to anyone contemplating a crime.”

Video systems, like the one Flash Foods uses, can allow a loss prevention specialist to view eight items crossing the counter and compare it with the register receipt to see only five items were actually scanned.

Today’s video systems can also do analytics to show things such as how long the cash drawer was open for each transaction, which can sometimes be a sign that something out of the ordinary has occurred.

Hypothetically, if a c-store operator has experienced a 10% drop in Saturday beer sales since bringing in a new weekend employee, technology can provide a probably solution.

“The new employee might just be a little slow, but a shift analysis might show otherwise, and then you can bring up the video that corresponds to the time of the transaction in question and know exactly what is happening,” Moraca said.

Sometimes the issue isn’t theft at all, but employee behavior. For example, the clerk’s friend might be riding a skateboard into the store and music might be blasting, repelling customers. A quick, random video check can pinpoint such issues.

Many systems today offer video analytics and real-time alerts. If an employee presses a panic button, a loss prevention professional will receive an automatic alert containing a crisp video image of what is happening, Moraca explained.

Another trend in retail is interactive security. If an employee presses an alarm, someone at a central monitoring location can intervene via a two-way speaker.

“They can say over the speaker something like, ‘Sir, can I help you?’ and it takes the onus away from just the cashier and the person causing the issue knows someone else is watching and you can get him out of the store,” said Moraca.

ARMING AGAINST CRIME
Because gunman incidents are an almost constantly in the news these days, more businesses are implementing training for employees.

“Right now more than ever, it’s important to take steps to keep an employee safe in these potential situations,” said Jay Hart, director of the Los Angeles-based Force Training Institute. “I get calls all the time from middle managers saying that they’re getting a lot of push-back from the executive level. That’s because this subject is very easy to do wrong, and people in the position of leadership don’t want to do it wrong.”

In a robbery, appeasing and allowing robbers to take what they want is crucial to ending the situation, but in an active shooter situation, employees successfully removing themselves from the situation is key, as is pressing a panic button to alert law enforcement.

When examining best practices in such an extreme situation, Hart advised focusing on safety rather than on violence. Also, empower your employees to trust their instincts.