Loss Prevention Loss Prevention ““Facts of LifeFacts of Life””

IAAPA Attractions ExpoIAAPA Attractions Expo20082008

Randy McMahonRandy McMahonPalace EntertainmentPalace Entertainment

INTRODUCTIONINTRODUCTION

Internal Theft is a ProblemInternal Theft is a Problem

–– 2007 Retail Survey: $35B Shrinkage2007 Retail Survey: $35B Shrinkage

–– 44% due to Internal Theft ($15B)44% due to Internal Theft ($15B)

How big is your problem?How big is your problem?

Motive & OpportunityMotive & Opportunity

When they cross paths, theft is likelyWhen they cross paths, theft is likely

Motive to steal may be worse than everMotive to steal may be worse than ever–– Economy, Reduced Hours, Obligations, Economy, Reduced Hours, Obligations,

Poor MoralePoor Morale……

Opportunity must be limitedOpportunity must be limited–– Hard with stretched staffHard with stretched staff

OUR RESPONSEOUR RESPONSEReduce Motive & Opportunity to StealReduce Motive & Opportunity to Steal

–– Involved ManagementInvolved Management

–– Physical & Procedural ControlsPhysical & Procedural Controls

–– AccountabilityAccountability

–– Background Checks, Hotlines, etc.Background Checks, Hotlines, etc.

–– Aggressive Investigation, Prosecution, Aggressive Investigation, Prosecution, Discipline/Termination & RestitutionDiscipline/Termination & Restitution

AndAnd……

Communicate a Clear Communicate a Clear Loss Prevention MessageLoss Prevention Message

Begin during preBegin during pre--employment interviewemployment interview

Heavy emphasis during orientationHeavy emphasis during orientation

Make it part of continuing trainingMake it part of continuing training

Every employee should receive a simple Every employee should receive a simple and frank and frank ““Loss Prevention Facts of LifeLoss Prevention Facts of Life””talk as soon as they are hiredtalk as soon as they are hired…… with with regular refreshersregular refreshers

As parents need to talk to their kids As parents need to talk to their kids about the birds & the bees before they about the birds & the bees before they

are in the midst of adolescenceare in the midst of adolescence……

We need to have a frank talk with our We need to have a frank talk with our employeesemployees……

–– To prepare them for situations that will To prepare them for situations that will confront themconfront them

–– Because many are young, naBecause many are young, naïïve & ve & inexperiencedinexperienced

Benefits of the TalkBenefits of the Talk

PreventionPrevention–– Fewer employees will stealFewer employees will steal

DiscoveryDiscovery–– Employees will come forward with Employees will come forward with

information about misbehaviorinformation about misbehavior

LetLet’’s Role Play for a few minutess Role Play for a few minutes……

Put yourselves in the position of Put yourselves in the position of employees who have come in for their employees who have come in for their orientationorientation

The talk can be given with or without a The talk can be given with or without a PowerPoint presentationPowerPoint presentation–– I have given you the PowerPoint notesI have given you the PowerPoint notes……

feel free to use them as you pleasefeel free to use them as you please

Loss PreventionLoss PreventionEmployee IntroductionEmployee Introduction

IntroductionIntroduction

Personal IntroductionPersonal Introduction

Employee TheftEmployee Theft

Today I want to discuss the unpleasant Today I want to discuss the unpleasant topic of employee thefttopic of employee theft

I need to be very open with youI need to be very open with you

This may not apply to you, but you need to This may not apply to you, but you need to think hard about itthink hard about it

You may not do it, but you will probably You may not do it, but you will probably see itsee it

StatisticsStatistics

About 50% of retail theft losses is due to About 50% of retail theft losses is due to employee theft employee theft –– Our business is probably higherOur business is probably higher

Employee Theft costs $14.6 Billion per year Employee Theft costs $14.6 Billion per year in the US [Retail only]in the US [Retail only]

Causes lower profit, higher prices & lower Causes lower profit, higher prices & lower salariessalaries

Retail ExampleRetail Example

$10 retail, $5 whsle, $3 overhead, $2 profit$10 retail, $5 whsle, $3 overhead, $2 profitFor every shirt stolen or given away, you For every shirt stolen or given away, you have to sell 5 to get evenhave to sell 5 to get even

Food & Beverage LossesFood & Beverage Losses

ScenariosScenarios

What would you do ifWhat would you do if……

One of your best friends comes to your One of your best friends comes to your register & asks you not to ring up register & asks you not to ring up somethingsomething

What would you do ifWhat would you do if……

A coA co--worker steals in front of youworker steals in front of you

What would you do ifWhat would you do if……A coA co--worker steals in front of you & offers worker steals in front of you & offers some (mdse, food, tickets, etc) to yousome (mdse, food, tickets, etc) to you

One of your supervisors asks you to turn One of your supervisors asks you to turn your head to a theft your head to a theft

A guest leaves exact change & walks off A guest leaves exact change & walks off without waiting for a receiptwithout waiting for a receipt

You will face some or all of these You will face some or all of these situationssituations…… you you willwill be temptedbe tempted

Temptation often comes at a weak point (late on Temptation often comes at a weak point (late on car payment, etc)car payment, etc)

If youIf you’’re using drugs, your will power is lower & re using drugs, your will power is lower & your $ need is higheryour $ need is higher

The time to decide what you The time to decide what you will do is will do is NOWNOW…… not in the not in the

heat of the momentheat of the moment

So What Do You Do?....So What Do You Do?....PLAN AHEAD!PLAN AHEAD!

Your OptionsYour Options1.1. Do nothingDo nothing (shows approval(shows approval…… you you

share guilt with thief)share guilt with thief)

2.2. Say Say ““NoNo””…… Tell them to stop/put it backTell them to stop/put it back–– ““No, I could lose my job for thatNo, I could lose my job for that””

3.3. TellTell supervisor or managersupervisor or manager

Should you tell your supervisor?Should you tell your supervisor?–– Nobody wants to be a snitch or a ratNobody wants to be a snitch or a rat

–– You may think itYou may think it’’s none of your businesss none of your business

–– You donYou don’’t want to get a friend in troublet want to get a friend in trouble

–– If you are a supervisor, you have no If you are a supervisor, you have no choicechoice…… you must deal with ityou must deal with it

But you need to do the right thingBut you need to do the right thing…… you canyou can’’t t just do nothing just do nothing –– DECIDE NOWDECIDE NOW

Would a Would a realreal friendfriend……

Steal in front of you??? Steal in front of you???

Include you in their theft??? Include you in their theft???

Offer you some of the stolen goodies?Offer you some of the stolen goodies?

Why would they do this?Why would they do this?

TO MAKE YOU A PART OF THEIR THEFT!TO MAKE YOU A PART OF THEIR THEFT!

A true friend would A true friend would NOTNOTput you in this position!put you in this position!

They try to justify their behavior by They try to justify their behavior by sucking you into itsucking you into it

If they get caught, they will turn on youIf they get caught, they will turn on you–– ““Even Tom does it.Even Tom does it.”” ““Karen knows about it.Karen knows about it.””

They have no respect for you if they They have no respect for you if they steal in front of yousteal in front of you–– Why jeopardize your job, reputation & Why jeopardize your job, reputation &

future by protecting them?future by protecting them?

Team Member TheftTeam Member Theft

Many people who steal are good people Many people who steal are good people who have made poor choices & have gotten who have made poor choices & have gotten in over their headin over their head

It is habit formingIt is habit forming…… like drugs, and it gets a like drugs, and it gets a little easier each time you do itlittle easier each time you do it

ButBut……Theft is wrong in any form or sizeTheft is wrong in any form or sizeCashCashFood Food GiveawaysGiveawaysSupplies Supplies RidesRidesTokens Tokens GasolineGasoline

AndAnd……There areThere are ConsequencesConsequences

–– Your integrity & self respectYour integrity & self respectNobody can take itNobody can take it…… you can only give it you can only give it awayaway

–– Your reputationYour reputation

Your jobYour job

Your freedomYour freedom (if arrested)(if arrested)

PALACE POLICY:PALACE POLICY: If you steal you will be If you steal you will be terminated & probably prosecutedterminated & probably prosecuted

Future potentialFuture potential

Other jobs you may want: you donOther jobs you may want: you don’’t know t know what you may want to do laterwhat you may want to do later……

What if you fall to the temptation What if you fall to the temptation or youor you’’ve already done itve already done it……

ItIt’’s never too late to do the right things never too late to do the right thing……take responsibilitytake responsibility

Tell your supervisor or managerTell your supervisor or manager

Agree to make restitution payments Agree to make restitution payments

You will probably lose your job, but you You will probably lose your job, but you will regain your integritywill regain your integrity

LOSS LOSS ““PREVENTIONPREVENTION””

Industry has many tools to prevent Industry has many tools to prevent employee & guest theftemployee & guest theft–– POS, Cameras, electronic tags, audits, etc. POS, Cameras, electronic tags, audits, etc.

ButBut…… the best loss prevention tool is the best loss prevention tool is YOUYOU……–– DonDon’’t put up with lossest put up with losses…… be an example for be an example for

othersothers

CONCLUSIONCONCLUSION

Loss Prevention is everyoneLoss Prevention is everyone’’s jobs job

Our company takes Loss Prevention Our company takes Loss Prevention very seriouslyvery seriously

Look for ways to prevent lossesLook for ways to prevent losses…… tell tell usus

If you become aware of lossesIf you become aware of losses…… tell us tell us

Thank YouThank You

NotesNotes

NotesNotes

DiscussionDiscussion

Use your own personality & experiencesUse your own personality & experiences

Who should give the talk?Who should give the talk?

How often?How often?

Who should hear it? Who should hear it? –– Not just for cash handlersNot just for cash handlers–– Theft can occur in any areaTheft can occur in any area–– Games, Redemption, Maintenance, GasolineGames, Redemption, Maintenance, Gasoline

FormatFormatIn Person In Person –– With or without PowerPointWith or without PowerPoint–– Consider Props for Consider Props for ““ShirtShirt”” exampleexample–– Approximately 20 to 30 minutesApproximately 20 to 30 minutes

PowerPoint with AudioPowerPoint with Audio…………on CD or Intraneton CD or Intranet

VideoVideo (if you have the $$$)(if you have the $$$)

Input & QuestionsInput & QuestionsOther ideasOther ideas

Personal ExperiencesPersonal Experiences

ConclusionConclusion……