Enveloped in Prevention

“Our approach to loss prevention is 100% proactive,” says Mark Goloja, Director of Loss Prevention at Carlton Cards Retail, a subsidiary of American Greetings.

A few years ago Goloja and his management team realized that the loss prevention department was viewed with apprehension and distrust. “We were the product no one wanted in their stores,” he says, “We were seen as the people who were responsible for bad news.” This attitude limited the LP department’s effectiveness, so they set about to change the entire loss prevention and safety process to build trust, honestly share information, and actively involve front-line staff in preventing losses.

Stacking The Cards

Carlton Cards, a 430 store gift and greeting card chain, replaced their legacy point-of-sale system, and the application did not interface with their legacy loss prevention solution. In spring of 2005 they selected XBR Store Analytics, and were up and running with it in August of that same year.

“We decided that the best way to build a strong loss prevention mechanism was to get buy-in from the front lines. The best way to do that was to be completely open and honest,” says Goloja. “We told all of our managers that we had XBR in place. We told them what were going to watch for, and we taught them how to read an XBR report. No nasty surprises. It was like being a teacher who gives out the test as a study guide.

”Further sharing information, the LP department issues a monthly newsletter about loss prevention. Included in it are the details of actual fraud cases, including how the fraud was committed, and how it was detected. “Secrecy may help catch thieves, but it doesn’t prevent the theft,”says Goloja.

Part of the standard, semi-annual training for store and district managers is devoted to loss prevention. Some of the training instructs the managers in seasonal trends, such as increased shoplifting during the holidays. Other training has to do with preventative tools and procedures. To make the training memorable and enjoyable, Goloja and his team create a video that spoofs a TV show, such as Taxicab Confessions, embedding information in a lighthearted format. “The point isn’t to bore them with a bunch of statistics. We want them to be invested in preventing fraudulent activity before it starts, and we want them to know what to expect,” explains Goloja.

Stamp Of Approval

Goloja and his team designed a rewards program similar to a loyalty program. Stores earn points based on how consistently they employ LP procedures and how well the store ranks during audits. The points are redeemable for a number of team-building items such as a pizza party, shirts, a microwave, and more. If a store receives a perfect score during an audit, the manager receives $100 cash on the spot and has a photo taken for the monthly LP newsletter. Managers of stores that receive a “commendable” rating are also recognized, though they do not get pictured. “We actually have managers coming up to us at the regional meeting asking when we can come to do an audit,” says Goloja.

Addressing Daily Procedures

XBR’s automated reporting enables Carlton Cards to involve the store managers directly. Every Monday XBR automatically runs and distributes a report to each store manager showing key indicators such as the number of returns, post voids, no sales, etc. for every associate in that store. Each associate must initial the report, so everyone knows what is being monitored.

The manager is responsible for reviewing the report and notifying the LP department if she sees something suspicious. The loss prevention team conducts the actual investigations, often interviewing on the phone. “We have a 95% successful closure rate,” says Goloja. “When the store managernotices something unusual on the report,she walks us through her thought process very thoroughly. We know exactly where to use XBR to drill down for more information. Cases take only two or three weeks from detection to resolution.

” XBR alerts the LP department directly to specific, potentially fraudulent transactions. A call to the store the next day leads to quick follow up. The department also runs a series of reports to identify areas where more training is needed. Denny Demarcy, Regional Loss Prevention Manager, has customized a number of XBR reports to address specific needs.

“Since installing XBR our case value has dropped by nearly 70%,” says Goloja,“and our case load is lighter. Our LP platform has three major planks: inform the people of what is expected, provide the education for them to follow-through, and reward performance. XBR has been an intrinsic part of our program, both as a deterrent and a detection tool.”