Monday, November 06, 2006

Trends in Loss Prevention

If you have been in the LP or security business for any length of time, you have undoubtedly seen the trend in the reduction of resources allocated to LP. Recent posts on this forum confirm that many companies have
reduced their LP staffs such that there is only 1 LP agent in a store at any given time, and that there are times when there are no LP agents in the store. Yet the LP function has expanded, both in terms of duties as well as "tools" - that lone LP agent is no longer "just" responsible for floor surveillance and apprehension, and for investigation of in-progress check and credit card fraud. Now, that lone agent is also responsible for conducting audits, checking in receivables, escorting big-ticket sales items, watching CCTV monitors, reviewing surveillance tapes, checking EAS equipment, etc. etc. etc.

So...duties expand, and personnel are reduced. Yet the world is shocked when shrinkage occurs, or mistakes are made, or apprehensions go bad. Companies are so focused on the bottom line that they forget that many
things contribute to that bottom line - not just the routine everyday things that can go wrong; but the occasional catastrophic events that in one fell swoop take whole percentages from the bottom line.

With 30+ years as a security and LP Director, I am now a Security Consultant. I help a variety of organizations rather than focusing all time and efforts on a single employer. And one of my biggest challenges is convincing my clients that sound security and LP strategies are exactly like another pure-cost resource that is fondly embraced by companies, a resource that management personnel gladly pay for, regardless of cost: insurance.

Here is the usual company scenario: there are few actual, everyday problems, so security has been reduced - shrink is at an acceptable level, so the world is good. Then I come in and point out the vulnerabilities: not the
things that ARE happening, but the things that CAN happen because of the lack of attention to security. And the key executive always has the same response: "Sure, it can happen; but it hasn't happened yet, so why should I worry about it now? Why should I spend money and reduce my bottom line to protect against something that may never occur?" And here is my usual response:

"Have you ever suffered a major, catastrophic fire?" (answer almost always "NO") "So"...I say..."then I presume you have decided to save a good chunk of money by canceling your fire insurance coverage, because you would certainly never want to spend money on something that isn't happening and which only
MAY happen." The executive gives his immediate reply: "Are you crazy for suggesting that? Don't you know how tremendously my business would be affected if we ever had a big fire? The loss of product, the injuries and potential loss of life........" And then he stops because he realizes what he has just said - he has admitted that in the case of a terrible potential event (fire) it is better to have protection that is not needed than to need it and not have it; it makes good financial sense. Then we begin a dialogue on the same concept as related to security strategies: the potential for loss of product, and injuries and potential loss of life and resulting bad publicity and resulting loss of sales etc. etc. etc.

Here's the history lesson - back in the olden days, in my younger retail days, my organization had an LP staffing policy: there would be at least 3 LP personnel on duty at all times (and this was at a time when responsibilities were pretty much limited to floor surveillance and apprehension, and investigation of in-progress check and credit card fraud). We made lots of apprehensions, and they very rarely resulted in significant scuffles. Why? Because our apprehension policy called for 2 LP agents to make the apprehension whenever possible, and to immediately handcuff almost every detainee. The number of agents policy was enacted so that there would be little opportunity for the thief to resist because of superior numbers; and the handcuff policy was enacted to reduce the opportunity for fight or flight, thereby limiting the chances for injury to anyone (agents, bad guy, associates, or bystanders). I was able to convince my organization (and my 2 after that) that this was just like fire insurance: something that may rarely be needed, but something that will be invaluable when it is needed. I could show (through research of relevant case law) that a single catastrophic event (like a botched apprehension) would be financially devastating and would more than eat up the amount of money spent on providing adequate protection measures.

Here's some ammunition (free of charge for you) - information that I recently presented to the annual conference of defense trial attorneys in Wisconsin:

1. Retail stores are the second-most sued type of business in premises security liability cases - that is the category of case which includes adequacy and sufficiency of security, the basic issue on which a store will
be sued when an apprehension goes bad (adequacy and sufficiency of security includes such things as reasonable amount of security measures, proper hiring and training of security personnel, etc.).

2. Assault and battery, false imprisonment and wrongful death comprise 61% of the reasons why businesses are sued (yes, even an LP agent can be accused of "assault and battery" when his actions during the course of an apprehension are deemed to be excessive and/or improper).

3. Over a 10-year period (1992 thru 2001, the period for which such analysis has most recently been done), defendants won the litigation in 52% of the cases - good news, right? Nope. The trend is reversing....for example, in 2001, plaintiffs won in 41.5% of cases. Why the changing trend? Because as more case law evolves, there is growing attention to the issue of "adequacy and sufficiency of security" and there has been much focus on the conditions which determine adequacy and sufficiency. And this is what the courts are saying: security measures, in order to be LEGALLY DEFENSIBLE, must be commensurate with foreseeable circumstances, taking into account a variety of other things. So when persons on this post state that they individually make 100s or 1000s of apprehensions annually, and that they are frequently the only LP representative in their stores, and that they either make the apprehensions alone or rely on fellow store associates for back-up (who presumably are untrained), I shudder at the potential ramifications, knowing that luck will never replace preparation for any significant amount of time and that a bad stop or detention will inevitably occur. And that the store will be hard-pressed to justify having only that 1 LP agent available to do all those things.

A long post, with hopefully helpful information.

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