The cause of shrink may not always be what you think

CAMDEN, N.J—When Karen VanBrunt started her career in loss prevention as a store detective, the professional landscape was vastly different. First of all, the technology available during the early part of her career was obviously less sophisticated than the tools that are available to retailers today. Long gone are the days of mailing VHS tapes to headquarters in order to review an incident, she joked.

It’s always been critical to the health of an organization to know what’s happening in its stores and today’s retailers are able to get that information faster. But just having information quickly won’t in itself help retailers improve operations. In today’s world VanBrunt said it is critical for retailers to have their point-of-sale system synchronized with their video surveillance so issues can be identified and incidents quickly analyzed. However, analyzing information is still very time consuming for loss-prevention professionals, who often juggle many different responsibilities within an organization. 

VanBrunt made another career change, transitioning from a loss-prevention professional to her current role as the director of professional auditing services for Agilence, which provides point-of-sale video auditing solutions. As a loss-prevention professional, she spent 24 years with Pathmark. Now that she’s on the vendor side of loss prevention, she said, it’s more apparent that retailers all share the same challenges when it comes to analyzing information, and sometimes the outcomes can be surprising.

For example, the most common areas causing losses to retailers are not always what they think, namely internal and external theft. “There’s often more operational and systemic problems impacting stores than fraud,” she said. “Associates are going to make mistakes, but operational issues are costing retailers more money and shrink than fraud cases.” It’s important for retailers to regularly review transactions to identify such issues. “Every transaction tells a story and we’re trained that if we see a six-pack of V8 scanning a $1.69, there’s a systemic issue there,” she said.

In addition to having the exception-based reporting tools in place to identify systematic errors, VanBrunt said it often becomes apparent that retailers have not properly trained employees. “The retail industry sees such high turnover and it’s hard to keep up and train people,” she said. “That’s something we immediately find and often employees have no intent to defraud a company and they weren’t doing it intentionally, but it was a training issue. That’s one thing a lot of customers don’t know until we get in there.” Regular auditing can help retailers identify those training issues quickly and prevent further losses, she said.

One of the biggest changes she’s seen over the years that has contributed to the improved health of retailers has been a willingness to collaborate within the organization as well as with competitors. “The organization needs to be open-minded and engage with other departments,” she said. “It’s not always fraud [causing losses]; organizations need to think about building relationships to make a better business.”

Retailers have also made big strides in engaging with competitors and sharing information and strategies. “Retailers are all facing the same issues and they need to share information. They’re doing that now with organized retail crime, and if one store has identified suspects in an area they talk to each other and that affects everything. The things they’re sharing aren’t company secrets.”