Presentation LP Watcher 4 Eng 2.0

Reducing Loss at Check Out:
an untapped opportunity
LP Watcher Release 4 Presentation

Madrid, August 2009

© 2009 ICTS Newfield Global BV www.ictsglobal.com

The enhancement opportunity at Check-Out
is significant in Loss Reduction terms
Unknown Loss drivers in Retail
Suppliers
5%
Internal Errors
15%
Internal Theft
47%

Check Out represents a real
opportunity: it accounts for
as much as 30% of Total Loss
External Theft
33%

*Source: ICTS Database

ICTS is specialised in the implementation of efficient check-out
Exception Management Tools, generating remarquable results and
a swift return on investment during the first 3-6 months of the project in many cases
1

Myths and legends about Loss Reduction
at Check Out: change inhibitors are mainly cultural
“Check-out fraud is inevitable:  Check-out Loss is an extraordinary source of immediate
it is part of doing business” profits and an issue worth tackling asap

“We will have to increase the number of security  Not at all. Our model focuses efforts on following up on
and control employees” main issues, enhancing the productivity of assigned
employees

“The timing is not right: we do not have  Within 3 to 6 months, initial investments will have paid
sufficient money, nor time nor people for that” off, and that with the existing team

“We can do it by ourselves …  Certainly. We help by doing it in a swift, focused,
we are already doing it” comprehensive and sustainable way

“New problems will appear  Sure. We will repress fraud and errors that are currently
to replace the ones solved” harming your bottom line and we will monitor potential
new frauds

 Unfortunately not: processes, people, information tools
“It is a security issue”
and protection measures are involved along the entire
supply chain
“My company is different:  It always works, no matter where you stand. Dissuasion is
It would not work with us” instrumental in achieving real results

2

A Check-Out loss management tool will
get the most out of different fonctionalities

Events Stores

COMPANY POLICIES

References Cashiers


Suspected frauds are detected thanks to alerts
of parameters and company policies’ infringements
Examples of indicators to build company rules:

 Returns and exchanges
 Null sale
 Cancellations
RULES
 Manual discounts
 Credit/Debit/Loyalty Card Repetition
 Non-scanned products
 Supplier and gift vouchers ALERTS
 Negative amounts
 Late night operations
 Number of non-existing employee
ACTION
operations PLAN
 Number, value and percentage of price
corrections
 References with the largest number of:
returns, exchanges and cancellations

… and triggers a follow-up workflow, generating a
dissuasion effect that drasticly reduces check-out errors and frauds
4

Detecting risks and company rules’ infringements at
Check-Out on store/regional/national level is possible

4 RISK
PROFILES
6 cashiers

3 RISK
PROFILES

10 cashiers

2 RISK
PROFILES

25 cashiers
1 RISK
PROFILES

34 cashiers

Source: ICTS Database

5

Real life example of risk detection at
Check-Out: excessive use of discounts by cashiers


Focusing on high risk employees is possible
NUMBER OF CUPONES REDIMIDOSPER EMPLOYEE
VOUCHERS REDEEMED POR EMPLEADO TOTAL NUMBER OF
VOUCHERS REDEEMED REDEEMED VOUCHERS
Cupones Redimidos
PER DAY
por Día Total Cupones
18 250

16

200
14

12

150
10

8
100

6 VOUCHERS PER DAY
CUPONES REDIMIDOS POR DÍA
TOTAL VOUCHERS
TOTAL CUPONES

4
50

2

0 0
145

205

229

265

289

325

349

409

469

529

553

589

613

649

673

733

793

817
25

61

85

109
121
133

157
169
181
193

217

241
253

277

301
313

337

361
373
385
397

421
433
445
457

481
493
505
517

541

565
577

601

625
637

661

685
697
709
721

745
757
769
781

805
1
13

37
49

73

97

EMPLOYEES
EMPLEADOS
*Source: PoS file / Real anonymised hypemarket example
7

Identifying cashiers with most null amount lines is possible

NB OF NULL TOP 10 STORES NB OF NULL TOP 20 CASHIERS
AMOUNT
LINES
NUMBER OF NULL AMOUNT LINES AMOUNT
LINES
NUMBER OF NULL AMOUNT LINES
45 40

40 35
35 30
30
25
25
20
20
Mean: 7,90 Lines 15 Mean: 3,10 Lines
15
10
10

5 5

0 0

STORE CASHIER- STORE

The tool allows to focus company ressources and actions
( training, interviews, follow-up ) on high-risk cashiers and employees
8

Identifying discounts applied
by employees in stores is possible

DISCOUNT DISCOUNT
AMOUNT € TOP 10 STORES AMOUNT €
TOP 10 STORES
TOTAL DISCOUNT PER EMPLOYEE 500
TOTAL DISCOUNT PER EMPLOYEE
800 21%
19% 12% 21%
20% 18%
22%
400
21%
600
13%
25% 19%
18% 300
19% 19%
400 18%
25%
200 19% 23%
12% 19%
200
100

0 0

AMOUNT DISCOUNT EMPLOYEE
Importe Descuento Empleado

% s/ Importe Total Empleado
% DISCOUNT / TOTAL SALES EMPLOYEE

9

Identifying the cashiers with
most manual entries is possible

TOP 20 CASHIERS
NUMBER OF LINES AMOUNT €
WITH MANUAL ENTRIES
140 1.800

1.600
120

1.400
100
1.200

80 1.000

60 800

600
40
400

20 MEAN: 167,67 €
MEAN: 10,73 Lines 200

0 0
3437-1240

3222-1533

3237-1540

2904-1142

2863-1240

3228-1536

3293-1525

0000-1576

3661-1073

3740-1240

3229-1540

0001-1037

3558-1257

2019-1039

1524-1106

2159-1071

0125-1533

2042-1106

1560-1037

0001-1075

0000-1469

0000-1529
CASHIER - STORE

10

Sorting cashiers by risk level is possible
ANULACIONES Y CORRECCIONES
CANCELLATIONS AND CORRECTIONS
SIN LLAVE
WITHOUT KEY
CORRECTIONS
CORRECCIONES
WITHOUT KEY
SIN LLAVE
700
CLUSTER DE CLUSTER DE RIESGO
EFICIENCIA
600

500

CAJERAS DE
ALTO RIESGO
400
(5.4 % DEL TOTAL)

300

200

100

CLUSTER DE OBSERVACIÓN
0
0 10 20 30 40 50 60 70 80 90 100
*Source: Pos File / cashiers with a steady activity
*Real anonymised hypermarket example
CANCELLATIONS WITHOUT KEY
ANULACIONES SIN LLAVE

The tool allows to focus company ressources and actions
( training, interviews, follow-up ) on high-risk cashiers and employees
11

The Check-Out Exception Management
Tool contributes efficiently to Loss Reduction
• Reduction of losses between
30 % and 60 % depending on
Losses the company / format,
generated by mistakes and
collusion

• Multiply the productivity of
the Loss Prevention actions
Benefits • Increase operational
efficiency at Checkout

• Pay back of 3/6 months
Investment • The cost by store / month is
minimal

An advanced Checkout Loss Prevention solution
triggers large potential benefits and low levels of risk
12

Selected references of ICTS Newfield in Loss
Prevention and Risk Reduction for the last 10 years

World Bank

ICTS Newfield Global has operated in Europe since 1986
13

Presentation LP Watcher 4 Eng 2.0

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