Changing Management’s view of Loss Prevention

Loss PreventionChanging management attitudes presents the biggest challenge and problem to Loss Prevention Managers. Retail managers and business owners are not loss prevention specialists, nor do issues concerning loss prevention gain any consideration until an incident occurs that directly affects them. Our job, as loss prevention professions, is to educate and advise management on risks and sometimes that entails changing attitudes.

Difference of perspective is the obstacle to overcome. A retail manager’s job is centralized around cutting costs and increasing sales. His/her focus is on team building and motivation, not issues of trust concerning loss prevention. In order to elicit change, you need to change the morality of their thinking. The mindset of coach needs to be transcended to that of a law enforcement officer, and only then may reality been truly understood from a loss prevention perspective.

The most common hurdle to overcome concerns management’s idealized conception that their employees are honest, hardworking team players who would never steal. Yet, the truth of the matter remains that though most employees are honest, given the right circumstance and opportunity – internal crime will occur. To convey this message to management with impact, you need to speak the language of management, which is profit and loss.

Statistics always catch attention. Provide management with statistics and facts on the growing amount of internal crime. Present facts such as the following: In a Pinkerton Survey of 86,000 retail applicants, 40% consider petty theft from the workplace acceptable. In another survey, the National Retail Security Survey, sponsored by Sensormatic, employee theft accounted for 41% of shrinkage. Brandweek Magazine [Feb.98] published the results of another survey citing that employees stole 1.1 million dollars more than shoplifters last year. In the U.S. Annual Retail Theft Survey [1997], it was found that employees steal up to 10 times as much as shoplifters, and that on a per company basis, one in every twenty eight employees was arrested for theft. Statistics such as these are available on the Internet and through various security publications, which you can also access through your library, if not on-line or through subscription.

Provide management with comparison information on what other retailers are doing about their internal problems. Through established relationships with other loss prevention specialists or enforcement agencies, information regarding LP products and effectiveness can be shared. Present this information to management in the form of a statistic. For example, Store X initiated a reward program three months ago, and since its implementation, they have recovered $5,000 in stolen merchandise and made 4 arrests. This information may take some time and effort to collect; however, it is effective in putting your point across and demonstrating your point.

Management should know that employees that steal find ways to rationalize their crimes. Point out how, that in their mind, the employee does not see his or herself as a criminal, just someone who has made a mistake. Emphasize that it is often rationalizations such as this, which enable the employee to justify and continue stealing.

Three of the most common rationalizations used are:

  1. The company doesn’t care about me, so why should I care about them.
  2. It’s a big company, they won’t miss a few bucks.
  3. The company expects a certain amount of shrink, they’ll just write it off or claim the insurance for it anyway.

Communication is a strategy that works to change employees inaccurate view of how the company feels about internal theft. Employees need to be shown how a few lost dollars does affect the company and ultimately their jobs or lost bonuses. Though management is in the habit of keeping this information away from employees, they need to understand that if the employees themselves understood more about how the bottom line affects everything in the company, the theft rationalizations would not occur.

Another obstacle to overcome is management’s desire to take an “inoffensive” sanitized approach to loss prevention issues. There is a misconception that employees will be offended if the problem of internal crime is discussed with them. It needs to be pointed out that the only people who will be offended by this kind of discussion are the criminals because they want management to turn a blind eye to crime. Awareness sends a clear message to employees that the company does not tolerate internal crime. A proactive stance tells employees that the company takes crime matters seriously and that the consequences for indiscretion far outweigh the harvest of criminal effort.

The key element to Internal Retail Fraud is criminal opportunity through lack of internal control and/or weak policies regarding cash and merchandise transaction. When looking to detect fraud, look for a weakness in the system [opportunity] and how the crime may be concealed. From there you will likely either find a hole to fill or a lead to follow.

Regardless of how good your investigation team is, the battle against internal crime cannot be won without management support. In fact, the biggest battle may not be against crime itself, but to direct management thinking more towards a loss prevention directive.

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