Loss prevention is a major challenge for retailers, but many people think loss prevention is just about cutting down on shoplifting. Admittedly, it’s a huge problem. According to the National Association for Shoplifting Prevention, shoplifters commonly steal items ranging from $2 to $200. But retail operations don’t often think about other forms of loss that can easily be mitigated by video observation and analytics. These include not only employee theft and embezzlement (with an average loss of $1.1 million for major embezzlement cases, according to Marquet International Ltd.) but also unnecessary spoilage of product, vandalism, waste, abuse, or misconduct. Modern surveillance solutions use cutting-edge hardware and real-time observation algorithms to capture every moment at your point-of-sale and every asset in your warehouse to help you track every dime of your inventory from the time it arrives until the time it is sold to a customer. These areas of operations may be overlooked but could save you money if analyzed more.
Reducing employee fraud and policy violations
This is the simple application of video analytics. By using Envysion’s powerful video applications, you can effectively and constantly research potentially harmful employee behaviors. A disgruntled employee might be tempted to dip their hand in the till but can usually be mitigated if they know they are under constant surveillance. It also doesn’t have to be outright theft if the malicious employee is clever. There are dozens of underhanded ways to execute employee theft including collusion with friends or other store employees, conversion frauds that use refunds and voided transactions, and “double-dip” schemes that can not only lose you money but also inventory as well.
Catching bad guys
It’s important to note that loss prevention isn’t just about looking at your internal prevention systems. External theft can also come from shoplifting but also more violent and serious criminal acts such as break-ins and robberies. Video surveillance can not only help you control the risks of external theft but also help you respond to criminal acts in real time by contacting the police immediately with crucial details describing a burglar or robber. For example, video surveillance is also an important element in establishing procedures and training to help employees develop shoplifting awareness, security procedures, and trained responses on how to handle specific scenarios.
Ironically, one of the most overlooked areas of loss in retail environments comes down to errors. Whether it’s poorly designed paperwork or bad math in counting out a register, these mistakes can cause around 15% of a retailer’s annual loss. Other errors include checking in inventory, doing holiday returns, or training cashiers which can result in thousands of dollars lost annually. By using sophisticated surveillance applications, analytical tools and audit services, you can find these errors before they become a major problem for your operation.
Video surveillance is commonly cited when companies are looking into loss prevention but these technologies can also be a powerful tool to mitigate potential liabilities related to employee injuries, customer complaints, and damage to property. Whether the issue is worker’s compensation claims, customer service conflicts, or safety enforcement, installation of a sophisticated video package can help you provide a factual account of activities for a wide diversity of situations, helping you to employ a more comprehensive and secure risk management plan.