Ed HeskettLoss Prevention Manager

How Data Helps Operators Find & Fight Theft

#DelagetLPWebinar

Goals for Today’s Webinar

Answers to the following questions:

> What data types should I follow in order to prevent theft?

> Why should data be part of every loss prevention plan?

> How can following the right theft metrics save me time and money?

> Why does data analytics play a key role in preventing future theft?

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Agenda

+ Additional Thoughts Before We Get Started

+ POS Theft As Seen In COGS

+ Data Points – COGs

+ Data Points – POS/Cash

+ Thresholds / Goals

+ Tracking / Trends / Anomalies

+ Recap / Setting Goals

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Opening Thoughts+ Analyzing data is time consuming, but necessary

+ Think about analyzing data as checks and balances.

+ Someone at the store level and above store level needs to own the data process, tracking, following up

+ Build regular data checks into your schedule

+ The more effective the store level team is in executing your brand standards (daily, weekly, periodically), the better

+ Understanding the numbers for what they are removes the emotion that often comes with performance and non-performance

+ Systems = “a method of regularly inspecting what you expect”

+ Commit to doing things differently than you are now.

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POS theft as seen in COGS

+ It’s too late…when you see the loss / theft in your COGS

> The theft or loss isn’t identified until seen in the COGS, perhaps even over a period of time

> Lost Revenue = Increased COGS = Food Served, Labor to Prepare The Food

> At this point, you are reacting and in some cases playing “whack a mole” to get to the root cause

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First Data Points

Store Level – COGS

+ Daily Variance Reports: Critical Few – Accuracy – No Bounce Backs+ Weekly Variance Reports: Complete – Accuracy – No Bounce Backs+ Transfer Reports / Summaries – Ghost Transfers+ Period End Inventory Results+ Beverage and Paper Cost Targets as a percentage of sales+ Calculating, tracking, trending “days in inventory”+ Example, inventory turns, increasing inventory, steady or

improving PCV

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Beverages+ Set goals / targets to monitor:

> Usage> Growing inventory on the shelves> Potential theft

+ 3% to 4% is a good starting point

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Paper Cost#DelagetLPWebinar

+ Target 2.5% of sales as your target

Inventory Alerts#DelagetLPWebinar

Calculating Days in Inventory

+ Beginning Inventory and Current Inventory (ending) should be relatively close to each other in dollars

+ To calculate “days in inventory”:> Current inventory dollars, $5497 /

Total COGS, $30,726 = .1789.> .1789 x 28 (days in a period) = 5 days.> Influenced by delivery day, volume, case

count / size on slower moving inventory

+ Set store goals, monitor trends

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Inventory Tracking#DelagetLPWebinar

+ Example #1 > Days in Inventory> Red Flag Usage

Inventory Tracking#DelagetLPWebinar

+ Example #2 > Improving PCV> Increasing Inventory> Inventory Turns

Protect Your Sales & Cash With Data Points

Store Level – Cash

+ “Professional thieves” steal on a budget….daily, weekly, and periodically

+ POS Register Tapes & Cashier Reports – Automated / Manual+ Transaction Compliance / Cashier Performance Log+ Armored Car Users – End of Shift Reports+ Shift Change Documentation – Handing off the safe+ Validated Deposit Slips+ Weekly Schedule (follow up on scheduling

and deployment of the cashiers)

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Register Tapes / POS Settlements#DelagetLPWebinar

Pay Attention To The Details

+ Typically, MICs focus on one number: cash accountability… “how much cash am I suppose to have?”

+ What else is the shift close tape / report telling you?

+ Deletions in this example are acceptable ($107, 4.85%) …but are they?

+ Over rings / voids > 1 for $3.20> Is there documentation

+ Employee meals / other discounts> 10 for $29.48 on a late night cash drawer> Documentation?

+ Coach, train, feedback with the cashier NOW!

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Accountability for Cashiers

+ Store level compliance is a must - every meal slip, every void / refund slip, and deletion performance.

> Handle missing documentation like missing cash!

+ And the MIC – What is their role in compliance?

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Trends and Comparisons

+ Trends can only be identified through tracking, manual or web-based solutions.

> Manual cash performance logs> Track metrics by cashier, over time

+ Web-based programs do the work for you - compares cashiers, identifies trends.

Cashier Comparison#DelagetLPWebinar

Cashier Trending#DelagetLPWebinar

Cashier - Shift Results#DelagetLPWebinar

A Single Transaction…innocent or theft?#DelagetLPWebinar

Example of Questionable Discounting#DelagetLPWebinar

The Power of Total Metric Tracking

+ Example of 7.0% of sales - for a location / cashier, over time> Totals found in manual tracking or on a Dashboard> Your brand may vary

+ Deletions before = 5.50%+ Deletions after = .20%+ All discounts = 1%+ Voids / Refunds / Over Rings = .10%+ Cash +/- = .20%

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Dashboard Example…..Theft Occurring

Sales $ O/R % Deletes % Emp Meals % Total %

371,814.12 0.29 10.90 0.99 12.18

370,218.19 0.14 9.16 0.49 9.80

293,473.30 0.28 10.56 0.95 11.79

292,518.09 0.46 14.15 1.26 15.87

383,196.85 0.19 9.29 0.38 9.85

378,618.54 0.31 10.84 0.64 11.79

312,252.43 0.35 12.19 1.13 13.67

389,737.56 0.20 11.09 0.75 12.04

298,319.16 0.13 10.14 0.89 11.16

3,090,148.24 0.26 10.84 0.81 11.90

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Where Do You Go From Here?

+ Investigate

+ Review transactions, trends / if available

+ Review schedules - common employees working?

+ Review DVR Footage

+ Who is “really” working the register?

+ Review manager register codes

+ Surprise cash audits

+ Speak with the employee(s)

+ Set goals / daily feedback

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Recap of Today’s Goals#DelagetLPWebinar

Answers to the following questions:

+ What data types should I follow in order to prevent theft?> Web-based solutions work best. COGS Trends / POS Trends> POS reports, from POS or Back of the House Systems> Follow deletions, voids, discounts> COGS Reports (cost of beverage, cost of paper, PCV results, over time)

+ Why should data be part of every loss prevention plan?> Removes the emotion from the performance…believe the numbers.> Keep the team’s eyes on what is really important…your team / your guests.> Better productivity / positive work environment

Recap of Today’s Goals#DelagetLPWebinar

+ How can following the right theft metrics save you time and money?

> Addressing anomalies as they occur> Tracking and addressing outliers, and addressing the issues before they blow up> Keep you out of investigations and working on what is really important> One organization reduced discounts by .25% = $300,000 / year!

+ Why data analytics play a key role in preventing future theft.

> The name of the game is get the money in the register.> Well controlled POS metrics will increase your sales and reduce / prevent theft.> Increased Profits

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Questions

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