Shrink Awareness your introductory guide to loss prevention
Loss Prevention an introduction Dear Shoe Sensation Team member, Shrink is a significant problem for retail companies and unfortunately our company is no exception. We experience losses caused by theft and error just like every other retailer. Losses can prevent us from providing new opportunities for our associates, completing remodels, opening new locations, and ultimately increasing our bottom line. We continue to rely on our associates to prevent losses and communicate concerns. Do not hesitate to contact your Area Director, Human Resources or the Loss Prevention hotline with any questions or concerns you may have regarding the information covered in this guide. The loss prevention department will partner with operations and the AD s to assist in shrink prevention. Understanding basic loss prevention and how shrink occurs allows you to be part of a team with fellow associates, your store and our company in promoting a positive and profitable environment.
Shrink expand your knowledge what is shrink? Shrink is defined as the loss of merchandise through theft and errors. These losses occur through three areas: internal dishonesty, external theft, and paperwork errors. how does shrink happen? Internal Dishonesty or theft is caused by the loss of cash or merchandise by one of our own associates. This form of theft is responsible for the largest percentage of a store s shrink. Examples would include fraudulent refunds, pass-offs of merchandise and theft of cash from the register or deposits. External Theft is caused by the loss of cash or merchandise by someone other than our own associates. The loss can occur through various methods including shoplifting, credit card fraud and passing counterfeit bills just to name a few. Paperwork Errors are mainly caused by being careless, making assumptions and/or neglecting to follow company procedures, thus causing a loss. These mistakes can occur while shipping and receiving merchandise, processing markdowns, conducting price adjustments, etc. how is shrink measured? Shrink is measured as the difference in the amount of inventory actually on hand in the store compared to the amount of inventory that should be on hand in the store. Shrink is measured in dollars and units. approximately $36.29 billion is lost yearly from shrinkage
Internal Loss tools & indicators Our Company believes that the majority of our associates are dedicated, honest and hard working. Unfortunately, each year a small percentage of associates decide to steal. Dishonest behavior causes our opportunities, benefits and our potential success to suffer. The personal consequences for those who engage in theft are equally severe and include termination, restitution, civil demand, prosecution and/or a criminal record. in retail, $15.2 billion is lost yearly due to internal theft The prevention of internal theft is everyone s responsibility. The first step in prevention is the awareness that an issue may exist. You can help by observing and reporting these potential signs of dishonesty. internal theft indicators: frequent register or safe/ deposit shortages frequent customers asking for a specific associate excessive voids, returns or other non-sale transactions empty packaging or tickets in the stockroom/rest room associates that wear or use but never seem to purchase merchandise While it may not be possible to prevent every dishonest associate from creating losses, there are controls in place to help identify and address the associates and their actions. tools used to identify internal theft: operational audits exception-based reporting on register transactions hidden camera systems to monitor store activity mystery shops to survey store operations/service LP Hotline
External Loss practices & behaviors We can prevent most external theft through attentive customer service, being knowledgeable of methods dishonest customers use, and also by staying alert to potential dishonest behavior. The most common form of external theft is shoplifting. Studies suggest that as many as 1 in 11 Americans have shoplifted. While there may not be any physical characteristics to identify a potential shoplifter, there are behavioral clues that may indicate a customer attempting theft in your store. indicators of a potential shoplifting customer: carrying large empty gym bags, purses, backpacks, or baby carriages selecting products without giving any attention to price or quantity appear to be in a hurry or attempt to make a scene pay more attention to our associates, other customers, or the layout of the store than to the merchandise Peer at associates but refuse assistance when approached for service Merchandise theft is not the only form of external theft. Other examples include credit card/ check fraud, quick-change artists, burglary and robbery. Although these may happen less frequently, you should be aware of their potential occurrence and follow the policy and procedure to prevent them. five steps to the successful apprehension of a shoplifter Shoplifting apprehensions can only be made by a member of store management and only if the following steps have been met. 1. You must observe the customer enter the store without the stolen merchandise. 2. You must observe the customer at the counter or rack where the merchandise was displayed. 3. You must observe the customer conceal the merchandise or place it on their person. 4. You must keep the customer in view at all times. 5. You must observe the customer step out of the store without payment for the merchandise. When the above steps have been met a member of store management can approach the customer and request that they come back into the store to recover Shoe Sensation merchandise when it is safe to do so. Upon
recovery of the stolen merchandise the Police Department should be called to process the shoplifter. Once the responding officer has left the store you should call your Area Director or Loss Prevention Director for further review. If the customer refuses to come back in to the store and the above five steps have been met, ask another employee to call the police while you note the direction of the suspect s departure. When the police arrive give a report of the incident using the five steps above and a description of the missing merchandise to the officer. Refrain from accusing the customer of theft. Instead, report the merchandise as missing and the last time you saw the missing merchandise was in the possession of the suspect. Note: At no time should a employee pursue a shoplifter into the parking lot jeopardizing their safety or the safety of our customers.
Paperwork Errors patience & caution Losses caused by error or mistakes are a completely preventable form of shrink. Most errors occur when we fail to follow the correct procedure, attempt to take a shortcut, are careless, or are caused by a lack of concern by the associate. To avoid mistakes, each associate should be sure that they understand how to perform a task, know where to find an explanation of the correct policy and procedure and know who they should ask if they have questions. If you discover an error has been made, please correct the mistake as soon as possible or alert a member of management if you need assistance. take caution during: applying the correct discount transferring merchandise price changes ticketing items processing damages providing customer s change entering returns/exchange information these simple steps will help prevent errors and limit loss for your store: double-check your work never make assumptions always ask questions ask for assistance if you find an error and cannot correct the problem keep informed of all documented policies and procedures or any changes that may have occurred allow enough time to perform a task accurately to prevent being rushed Avoid the temptation of shortcuts! The easier way of getting things done is not always the best nor most accurate. Paperwork accuracy takes patience and a basic understanding of our store s policies and procedures. annually, $5.04 billion could be saved by double checking your work
We Need Your Help handling & reporting suspicions Our company is dedicated to providing a safe, productive and theft free environment for all our associates. In this guide we have talked about the three ways that losses occur. The next step is for you to help us resolve the issues through communication. If you suspect dishonest activity, policy violations or witness behaviors that do not support our company environment, notify a member of your management team. If you feel uncomfortable or feel you cannot freely speak with a member of management, immediately call the LP Hotline. Information can be reported at anytime and will be kept completely confidential. three quarters of all theft is done by an amateur shoplifter The information you provide is taken seriously and will be forwarded to Loss Prevention to determine the appropriate course of action. This may include further research and/or a thorough investigation to help resolve the reported issue. While communication is key to our reduction of loss, the manner in which we report our concerns is equally important to our work environment. To ensure a work place of mutual respect please take action. follow these guidelines before and after you report a potential suspicion: Do not discuss any of your suspicions with co-workers. Confidentiality is crucial to ensure fair treatment of everyone including those potentially involved in any inappropriate behavior. Refrain from treating any associate(s) differently. Report information when you have the privacy to speak freely. Follow the instructions given by your supervisor or the operator of the LP Hotline. Through your awareness, your actions and your communication, you play an important role in helping the company reduce losses. We appreciate your time and attention to these concerns and hope that your career with the company is a successful, educational and a fulfilling endeavor.
The LP Hotline any day any night The LP Hotline is a toll-free line that encompasses an avenue to report business abuse concerns, suspicions, thoughts, experiences, or any similar information. Don t ignore theft and dishonesty. Report any incidents or suspicions immediately to your supervisor or by calling: LP Hotline 1-800-734-3402 Mailbox 847 this line can be used to report suspicions such as: internal theft harassment discount abuse employee relations policy & procedure violations unsafe working conditions time & attendance abuse improper cash handling/theft operational deficiencies apprehension & termination are the most common responses to employee theft This guide was designed as an introduction to shrink awareness and loss prevention. It provides associates with an overview of the definition, measurement and causes of loss. The prevention of cash and merchandise loss requires the effort of each member of our team. Participation in shrink reduction needs to be a daily contribution to the overall store operation. I have received a copy of the Shrink Awareness Guide that provides an overview of the definition, measurement and causes of shrink. I acknowledge that I have read and understand the concepts presented. I understand the guidebook is not all-inclusive, and serves as an introduction to the topic of loss prevention. I realize that additional resources are available to gain further information on this subject. Date Store Number Associate Printed Name Associate Signature Manager Printed Name Manager Signature
LP Innovations, Inc.