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A major sporting goods company, founded in the ‘70s, sells more than a dozen brands in over 300 stores worldwide. With over $900 million in annual revenues, the company sponsors hundreds of professional and amateur athletes. Its diverse product line includes clothing, accessories, eyewear and watches. The company entered a new stage of expansion and growth, opening new stores. With rising theft, they realized they needed better Loss Prevention (LP) practices. |
Challenge
This manufacturer/retailer was experiencing high shrink. Several factors were contributing: lack of LP policies and procedures, lack of compliance, and general lack of security resources. Adding to that was the fact that their sporting goods product line was highly desirable, with an inherent street value and strong youth appeal. It was an attractive target for theft.
Because store employees tended to be young and less experienced, they were not highly alert to theft, and were more susceptible to committing fraud themselves.
The situation escalated when sales media could not be located for a substantial cash refund case. This was when the company decided to call in the professionals.
Solution
KWI implemented new LP procedures and began monitoring the client’s POS transactions. The exception-based reporting program detected instances where user-defined rules were broken. These instances were flagged by the LP analysts and presented to the team’s investigators for further examination. The analysts also inspected online auction sites for the illegal sale of merchandise.
The company also instituted KWI’s sales audit program. This process reviews all of the daily sales receipts to ensure requirements are met. Paperwork can by accessed by the LP analysts when questionable transactions require further review.
Most recently, the company launched KWI’s field audit program. This non-biased overview helps maintain consistency company-wide, and aids in identifying training issues.
Results
Since implementation of the program, several theft admissions were obtained and assets were returned. Shrinkage is decreasing.
On an ongoing basis, the company has increased the detection of fraudulent register transactions, stolen bank deposits and merchandise theft. Store personnel are more inclined to notice instances of theft, both internal and external, and are educated on the appropriate procedures and actions.
The company continues to update operations to advance their Loss Prevention practices, educate their employees and enhance the capabilities already in place.
This company’s name has been omitted from this case study to ensure client privacy as pertains to Loss Prevention casework.
