Coming Up Short?: Ensuring Your Deliveries Match Your Invoices

Most of the headlines in 2009 have carried a common theme with respect to business and retailers in particular: a struggling economy and record high unemployment. Although most employees, customers, and vendors are as honest as the day is long, others simply cannot resist the temptation to steal what they cannot afford--especially in difficult times.

According to experts, store employees stole an estimated $15.9 billion from their employers last year--an astonishing amount that constitutes just under half of the documented theft losses at stores. By some accounts, that's more than shoplifting and vendor theft combined.

Wait, you mean drivers are stealing from me?

Not all certainly, but "shortage on delivery" can contribute significantly to shrink and shortage in most stores. Ordering 50 widgets and receiving 40 can be a problem if you're paying for the full order and don't take the time to follow good receiving practices. Wherever possible, there should be a neutral vendor check in area at the front of the store where vendors can "dock" or stack their delivery to be checked in against the invoice. Experts also advise against "swap- outs" to replace stale or damaged goods and instead recommend separate credit/return and delivery/invoice write-ups.

If your business has a walk-in cooler (like those found in quick-serve restaurants or convenience stores), it might seem that your delivery driver is reducing your workload by wheeling soda, beer, or other cold products directly into the cooler. But how do you check in the delivery when it's docked next to product already on storage shelves or retail racks in the cooler? How do you know your check-in process doesn't include products you've already paid for, products that the delivery driver slid onto the new stack? When drivers are commissioned sales reps, the temptation to pad the bill can sometimes be overwhelming.

So how do you stop it?

Regular checks and proper procedures are the keys. If deliveries come in from the street, check in your vendors at the front of the store. If back-door receiving is your practice, make sure an employee checks each delivery by hand count, touching each case as it comes in. And don't be afraid to open boxes to make sure they contain the correct amount of product.

A final thought on delivery theft: Employees should be prohibited from accepting gifts or free samples from vendors. Rare is the case when the deliveryman just happens to have an extra case of product on the truck when they're selling product off the truck. Gifts can also be a way to soften up an employee to look the other way the next time the driver shorts a delivery as an "honest mistake."

Shoplifting is another demon that comes in all sorts of shapes and sizes. It's an ugly reality for many retailers across the country and it becomes even more evident during the holidays. Encourage employees to make eye contact with customers as they enter the store. Allow employees to walk out from behind and offer assistance to customers. It's a great customer service and an excellent theft deterrent.

Police and retail experts generally advise against physical confrontation with a customer suspected of theft. Get familiar with the appropriate retail laws in your state. Most prohibit physically detaining a person unless you've witnessed a theft and most every state prohibits a physical search or pat down of a child or an adult by a store employee. Never chase or confront theft suspects or leave the of the store to pursue shoplifters - employee safety is the watchword of the holidays. Call the police and be a good witness.

Finally, armed robbery isn't confined to convenience stores, banks, or late night businesses; it can happen at any hour of the day in any type of business that transacts cash. Limit the amount of cash in the till if your average transaction value is in single digits. It will be rare (and should cause a raised eyebrow) if customers try to pay for small purchases with large bills. Oftentimes, it can be an excuse to see if the employee balks at providing change, or readily lifts the till to reveal $20's stashed in the bottom of the drawer. Big money can be big opportunity for a robber looking for a quick in-and-out hit.

Best practices

In light of these kinds of losses, it becomes imperative that you secure your stock from theft by customers, delivery drivers, and certainly by employees and their friends. Back-room stock should be inventoried daily and counter racks counted every day; or even each shift, if counts don't reconcile with sales.

Good inventory controls serve as a prevention tool with respect to internal loss. At a minimum, they can help identify patterns when losses increase and help employees pay better attention.

By most accounts, 2009 has been a challenging year for many. Prudent loss prevention and security practices can help ensure the profitability of your business, as well as the safety of your employees and customers through the holiday season and beyond.

Rollie Trayte is a Scottsdale, Ariz.-based security consultant and former director of loss prevention for ConocoPhillips/Circle K stores. Gary Widman is president of Lekson Visual Communications, a supplier of security products and services.

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