Using Video Surveillance in a Retail Environment to Reduce Paper Shrinkage

Utilizing Video Surveillance to Combat Paper Shrinkage

Most retail loss prevention executives will tell you that they have effective utilization of closed circuit surveillance systems in the fight against internal and external theft. The number of successfully solved theft cases reported by the industry surveyors paints a vivid picture of a robust crime busting program in place throughout the retail community. Congratulations, job well done!

But what about paper shrinkage? You know paper shrinkage which according to industry pundits is taking quite a toll on the retail financial landscape. If we look at last years estimates by the University of Florida study sponsored by the National Retail Federation, retailers lost over $37.4 billion dollars in total shrinkage. Remove the estimated 17.8 billion attributed to internal theft activity and the 12.3 billion associated with shoplifting, which leaves approximately a 7 billion dollar shrink opportunity relating to paper losses. Definitely nothing to sneeze at. Yet paper shrink initiatives seem to take a back burner to their more glamorous crime busting cousins. As margins become slim, budgets whither and the economy continues to contract, security and loss prevention leaders need to be on the forefront of emerging trends and innovative thought process in the fight against all things shrink.

When approaching the paper shrink challenge we first have to identify the causes for our paper woes. It may vary depending on the type of retail operation you work in, but some of the general pain points would be: missed markdowns, receiving errors, pricing issues, claims/returns and invoicing mistakes. This might be the time to evaluate where you and your team feel your paper shrink opportunities lie. Utilizing tools such as procedural reviews, internal audit studies, and store visit spot checks can aid in determining root causation for paper shrink. Always a good exercise, it may be time to clean the shrink closet out and find those nooks and crannies where your paper shrink is hiding!

Once you have identified key areas of paper shrink opportunity, integrating video surveillance to address these concerns is the next step. Although no one likes the idea of working under the watchful eye of surveillance system I doubt any of you who have cash offices would ever consider such an operation without properly installed video surveillance… would you? Utilizing that reference point, placing video surveillance in areas rich in paper shrink opportunity seems to be the best defense beyond standard audits or reviews. As technology costs lower, video solutions are now an affordable enhancement to the check and balance systems that are in place to prevent paper shrink losses.

The benefits of a paper shrink video defense plan are many. I will highlight 3 that quickly come to mind:

1. Deterrence. Utilizing the video system in paper shrink environments reminds employees that monitoring is in place to ensure proper procedures are undertaken. This will reduce the risk of employees cutting corners and making errors. As well, video can be a validation, indicating that the error did not come from that particular office or worker. This dual benefit factor is a great selling point when implementing the video system.

2. Training. Allowing the employee to see themselves in action (or a lack of action) involving a specific shrink related activity is a wonderful way to teach and train the proper procedures. If a picture is worth 1000 words, then video must be worth a million! I have found this to be very effective in the receiving, DSD and claims areas of the business. Reinforcement of policy is easily enhanced with video. And the employee understands that their job performance is always being evaluated through the utilization of the video system.

3. Error recovery. Video can be used to identify errors in various paper shrink environments. Once discovered, adjustments may be able to be made to save what might have been a huge shrink impact to the business.

Involving video analytics in the “back end” of your retail business environment is yet another solution to add to your ever growing list of technological advancements in the industry. Finding a supplier who will work with team to identify risk areas and establish dynamic analytics is crucial to getting paper shrink eradicated.

As we travel down the road of progress, we can not forget that paper shrink is real, and is a real threat to the profitability of any retail company, including yours. What are you waiting for? Get to the forward edge by implementing a robust paper shrink attack using targeted video surveillance solutions. Your bottom line will be happy you did!