Theft Deterrence Marketing -- Part 2: The Art And The Science Of The Vending Employee Loss-Prevention Orientation

by Mark Manney
Posted On: 12/3/2019

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(Click here to read Theft Deterrence Marketing Part 1: The Big Picture)

Background: As a district loss prevention manager in the late ‘80s for a national big box retail chain, I was on a human resources team that visited dozens of new stores during mass hirings well before the statewide grand openings of all the stores. I did this in two different states and learned a great about the effectiveness of theft deterrence marketing.

What I learned I incorporated into an expanded program in a regional retail company with 5,000 employees that I eventually managed three divisions for -- for seven years. Then I adapted and customized the program into my vending/foodservice consulting deliverable from 2002 on, and lastly into my Vending Loss Prevention manual: The Culture of Controls: Training -- Technologies -- Tools & Tactics in partnership with Vending Times.

Theft Deterrence Marketing is undoubtedly one of the least understood or practiced, yet proven, loss prevention “tactics” in any industry that employs beings who are human.

As stated in Part 1 of this series: “Savvy business owners in every industry understand it is wise to “market theft deterrence” to your employees just as you market your products or merchandise or services to your customers.”

Click here to read Theft Deterrence Marketing Part 1: The Big Picture

The retail company I had worked for in the ‘80s perfected the art and the science of selecting, training (and deterring from stealing) new employees to kick off their entry into their expanding markets nationwide. I took that foundation, expanded on it, and then built a customized vending program from both evolving retail models in which I had been immersed.

It was common knowledge in the big box industry that the company I had started with had by far the lowest “shrinkage” (inventory losses) in the big box retail industry. That was a fact. What this blog covers was one of the reasons they were so successful in enhancing profit with the tactic of a focused employee loss-prevention orientation program.

My early role in that retail company was to give the loss-prevention orientations by showing a brief video to deter employee theft, talk about employee theft directly with the new hires, explain why it is wrong (yes, you have to remind some stealing is wrong), and that not only would it not be tolerated, but once exposed there would be consequences, provide them with a detailed handout to read later, and wrap it all around a positive message. Not an easy task, but one that pays big residual dividends with the majority of employees you are trying to reach, the 66%.

Once again, click here to read more on this in Theft Deterrence Marketing Part 1: The Big Picture.

Theft deterrence marketing wasn’t the only reason for their well-known success in retail Loss Prevention, but it was one of the major reasons.

Here is a snapshot of the program I have developed for any vending company, of any size, and the approach. It’s the who, what, when and why of bringing a theft-deterrence marketing program to your company.

  1. Who gives the orientation is critical. Select a manager (not necessarily HR) for a separate loss-prevention orientation about 20 minutes long. I prefer a CSM or above who has a strong personality and good communication skills. Someone a little (or a lot) “edgy.” Someone with some grit and wit who has real world, in the trenches, vending theft experiences. Someone with a little gravitas to their personality. Someone who can convince the new hires the company is serious about protecting its profit and its assets, and if you want to play “Catch me if you can,” you will be caught…and last but not least…there will be “consequences.”

  2. What are the six generic vending company loss prevention orientation handouts that are used as the frame and the script for the orientation, and every employee leaves with stapled together. Here is the list:

  • Loss Prevention Overview

  • Covert Camera Announcement Memo

  • Fleetwide Covert  GPS Announcement Memo

  • Machine Pre & Post Audits Standard Operating Procedure (SOP)
  • Pre & Post Machine Audit Investigative Flow Chart

  • Acknowledgement of Attending the Vending Loss Prevention Orientation

Employees Receive all the Handouts

             All the manager giving the orientation has to do is introduce themselves, pass out the

           handouts, and read them. At the end he/she collects the signed and dated

          “acknowledgement forms” and asks for any questions and answers them.

            I also recommend the handouts are posted to remind everyone of their contents
3. When is always before the first dollar or case of product is touched by the new employee.

      4. 
Why is well known throughout many industries who have customized and developed their own loss prevention orientation. It significantly impacts the 66% of employees who sit on the integrity fence, and pushes most of them onto the right side. This type of loss prevention orientation makes the “risk” outweigh the “reward” and helps put the reality and the perception of the controls you are building into your day-to-day operating culture impactful.

This graphic is a 1,000-word picture on the first handout and is the nuts and bolts of what you are assembling in the minds of your new employees. 

The Vending Theft Ladder

7. Cash Theft

6. Product Theft

5. Theft of Parts and Property

4. Theft of Fuel

3. Theft of Time

2. Unnecessary Product Waste

1. Productivity Waste & Fuel Waste



I had a number of managers at various levels who balked at this orientation program because they either thought it was showing all of the company’s cards on investigating or it wouldn’t work. I never, ever once had this approach not work. How did I know? Simple. The cost of goods reductions.

Most operators are bleeding from a 1,000 cuts, not major wounds. You have to address 1 through 7 and this orientation, and the approaches explained within its handouts is exactly how you do that.

It’s called loss PREVENTION, not loss INVESTIGATION for a reason.

We all know investigating dishonest employees is time consuming, stressful, and takes your eye of the main thing -- SALES! Yes, it is necessary. Yes you will have to do it with some of the 13% who will not be deterred, but by marketing theft deterrence to your employees, showing them your teeth…you will have to actually bite fewer employees…if you get out in front of theft through deterrence.

An ounce of prevention (orientation) is worth a pound of time-consuming cure (investigation).

Orientation documentation for all employees: In all of my clients, we just didn’t use this program on new employees. We brought every single current employee in and they went through the orientation as well, received all the handouts, signed the acknowledgement form, and it was put into their HR jacket. That acknowledgement form was used in countless unemployment hearings when an employee was terminated for violating any of the 1 through 7 categories. I have, never ever lost an unemployment hearing in my retail or vending careers often because of signed orientation documentation we had on file. If they were terminated for one of the rungs on the ladder, they can’t say they didn’t know, because we could prove they did. Unemployment judges eat orientation acknowledgement form documentation with a spoon.

Orientation body language: I have been trained in and have conducted countless body language behavioral analysis interviews and interrogations since the 80s. Whenever I would give the above orientation to clients, I would brief two or three managers in the room with what is below, and tell them to closely watch the employees as I went over the 1 through 7 rungs on the Vending Theft Ladder, and especially watch those they “suspected.” Many individuals who were climbing on any of the rungs would have sudden involuntary body language reactions as I was talking, such as:

  • Tightly folding their arms across their chest (high up) and looking down

  • Nervous, twitchy moves, and or sudden lip licking, biting and or chewing their lips

  • Sudden deep breaths or rapid breathing.

  • Redness in the neck and face as their blood pressure suddenly surged

  • Larynx (Adam’s apple) moves repeatedly…they swallow three or four times

  • Smirks, phony smile, tension held in mouth and jaw

  • Guilty looks as their eyes became hooded

  • Trunk leans excessively (back, forward, sides) shoulders slumped, muscular tension, excessive perspiration, may shift position often

  • If standing (I had some big rooms) easing toward the door, unconsciously getting ready to flee

Some employees who have been successfully getting away with one of the rungs on the Vending Theft Ladder just can’t help themselves, and will actually ask questions about punishment for various rungs. With the right answer from the manager given, they will stop immediately.

In one famous orientation incident, I was intentionally looking right at a money room counter who was suspected of stealing. When I started talking about cash theft, she started breathing heavily then just hyperventilated. I had to stop and rush over to her (I was on a first aid squad once) then quickly got her a paper bag to breath in and out of. She recovered but would not look me in the eye. She quit the next day with no notice, and cash shortage dropped by 50%.

I have opened many successful investigations on individuals based on nothing more than their reactions to the loss prevention orientation observed by me or one of the managers in the room who was intently watching for them, after I trained them on what to look for.

This entire program, with all of the handouts in generic form, and details about the covert cameras (you only need one -- employees don’t need to know how many you have) and the covert GPS (you only need one -- employees don’t need to know how many you have) are all included in my master Vending Loss Prevention Manual: The Culture of Control: Training -- Technologies -- Tools & Tactics.

Conclusion: Management must understand the three different types of employees in relation to theft, and how powerful a well-constructed theft deterrence marketing loss prevention orientation program will stop cold 66% of “potential” thieves and drive many of the 13% (incorrigibles) underground.

 

Once the 66% (who are easy to deter) stop climbing any rungs on the Employee Theft Ladder, the 13% start to stick out like a throbbing sore thumb, and are easier to focus on and deal with -- with what I like to call (the title of a future blog) CLEAN ENDINGS.

MARK MANNEY is founder and CEO of Loss Prevention Results (LPR) focused on the vending and foodservice industry. In partnership with Vending Times, his Food Service and Micromarket Loss Prevention Manual, “The 5 Loss Prevention Common Denominators,” and his Micromarket manual “The Brave New World of Micromarket Loss Prevention” are available in the VT Bookstore by clicking here.

Manney is debuting his 117 page Vending Loss Prevention Manual titled: The Culture of Controls: Training – Technologies – Tools & Tactics, with the full table of contents, in the VT Bookstore in the near future. This manual explain his entire Vending Loss Prevention Consulting Deliverable in detail. A consulting Deliverable brought to hundreds of Operations in 27 states.

Contact Manney with any questions or comments at (919 812-3602 or mmanneylpr@gmail.com. He enjoys hearing from VT readers and is online at losspreventionresults.com