Convenience stores with high standards succeed at reducing shrinkage and cash loss.
By Erin Rigik Del Conte, Senior Editor
Loss prevention and inventory control at convenience stores begin at the top, with clear rules and best practices for employees and store management, followed by accountability for missteps. Convenience Store Decisions caught up with loss prevention expert Chris McGoey, ‘the Crime Doctor’ and founder of McGoey Security Consulting for some tips on improving loss prevention strategies.
Convenience Store Decisions (CSD): You’ve said that clean, organized convenience stores with proper inventory management and accountability have lower shrinkage, theft and cash loss. Why does a well-organized and well-managed store help with loss prevention?
Chris McGoey (CM): After four decades working with convenience store chains about inventory shrinkage and cash loss solutions, I’ve found that daily accountability is a top priority for loss control.
The best c-store operators have high standards and demand good accountability practices from the moment inventory enters the store until it’s processed out though sale or transfer transactions.
I’ve audited thousands of high-shrink, high-cash loss stores, and I always find a corresponding lack of organization, attention to detail and clutter. A sloppy, disorganized store is a sign that management doesn’t have high standards for inventory and cash control and doesn’t require it from store employees. Dishonest employees see this as an opportunity to take advantage of disorganized management because they know they can blame former employees or shoplifters for unexplained inventory losses.
Disorganized stores usually have higher than normal employee turnover and will need emergency employee replacements when one fails to show up to work. The response is often a poor hiring decision followed by very poor training because the new-hire is only given a crash-course in procedures taught by a poor trainer. Even a quarterly cycle will make it difficult to expect and achieve inventory, sales and cash accountability.
To the contrary, being well organized has many operational benefits. Having good accountability allows a manager to spot even small changes in product movement, cash overages and shortages or variation in sales trends, and rectify the cause.
CSD: What are some best practices in inventory management/control you can recommend to c-stores to help achieve this goal?
CM: Well, there are a few:
1. Ideally, there should be a model in place when acquiring a c-store franchise where all inventory is accounted for and cash accounting is zeroed out. Short of that, there should be a method to reset to a defined default operation to establish a business baseline.
2. C-store operators need adequate training in all the necessary systems required to run an efficient operation. Since many c-store operators don’t have prior retail store experience, a structured training manual, in-store training and ongoing supervision is necessary to be successful.
3. I cannot stress enough how important it is to set systems in place that help you assess inventory and cash accountability, even if they appear to require that employees take a few extra steps. Those extra steps provide the necessary controls to run an efficient business with accuracy and accountability.
CSD: You’ve been known to say good employees want to be held accountable. Why is that?
CM: I’ve confirmed over many years that good employees prefer structure with clearly defined and articulated procedures for every task throughout a shift. This structure creates a high standard for productivity and accountability for good employees to achieve. If employees know that they are responsible for accurate inventory and sales transactions, they are more likely follow your procedures to stay in good standing or advance. Structure allows c-store operators to compare employee transactions and activity by shift and quickly spot the non-compliant or dishonest employee.
CSD: What are some steps for holding employees accountable?
CM: A store with high inventory and cash losses may need to replace staff because systems have broken down and would otherwise take months to sort out those responsible:
1. New management or at least a new training program is needed to instill a commitment to high standards of accountability;
2. The store needs to be meticulously cleaned and inventory reset to establish the model for employees to maintain moving forward;
3. Detailed job descriptions with detailed training are needed for each shift to demonstrate how to accomplish every task and be held accountable;
4. Close supervision is required initially to assure that high standards are understood and the staff capable of adhering to the changes. Some employees will not rise to the challenge;
5. A clean and organized store will generate immediate positive feedback from customers;
6. New accountability for inventory controls and cash management will bring a new efficiency that will make everyone’s job easier;
7. Cash accountability systems will allow honest employees to demonstrate 100% compliance and accuracy and should produce a surprising increase in sales activity per shift (e.g. employees not ringing up sales and pocketing the money is a major cause of cash losses).
Stay tuned for more from Chris McGoey, founder of McGoey Security Consulting, in an upcoming issue when he tackles training, hiring and cash handling best practices. Learn more about McGoey’s retail experience at CrimeSchool.com.
