Loss Prevention NOT Sales Prevention
To work effetively within your organization become a Student of the Business
Over the years, progressive Loss Prevention/Assets Protection Divisions have had to sometimes overcome a perception, particularly with the Operations and Merchandising groups, that their role in protecting merchandise from loss would be more appropriately termed “Sales Prevention.” In this article, I will address how this perception develops and what must be done to correct it.
The truth is that companies which control their shortage losses most effectively are those where the responsibility for those losses is widely shared. Loss Prevention/Assets Protection Divisions rightfully shoulder the lion’s share of responsibility for the identification of appropriate deterrent measures including both equipment and people resources. In addition, LP/AP must be at the forefront in implementing programs and procedures to prevent losses and quickly recognize and address breakdowns that occur.
However, Senior Management must recognize that these efforts are greatly enhanced by the active involvement of other critical areas including Store Operations, Merchandising, Information Systems, and Internal Audit. Where this involvement does not exist, the LP/AP Manager can easily develop a sense that no one else within the organization is concerned about the losses or particularly appreciative of efforts to control them. If allowed to persist, this “isolationist” approach tends to result in policies that focus on loss control through lock-up – a development that encourages the “sales prevention” attitude from others.
A better option is for the LP/APprefessional to become a Student of the Business. To do so means developing and demonstrating an honest understanding of the goals of the enterprise. For a retailer, this goal is to buy and sell merchandise at a profit. While proper display and packaging requirements are important to reduce losses, it is also important to recognize that restricting customer access to merchandise always negatively impacts sales. There must be a sensible balance achieved that takes all of these issues into consideration, so that the ultimate result is improved profit.
Partnering with Operations and Merchandising regarding packaging and display requirements, working with Information Systems and Internal Audit to capture and analyze specific losses by SKU, and developing a true understanding of loss solutions that don’t always involve security cases (such as EAS source tagging) is the best road to becoming a true Student of the Business.