Loss Prevention
There is no question that loss prevention has become more important in the vending and foodservice industry. Given the challenging times that operators are facing, the ability to reduce if not eliminate loss is one of the greatest revenue enhancing opportunities that exists.
The good news is that there are more tools available to accomplish this nowadays. Loss prevention is my specialty, and I look forward to sharing my insight with vending and foodservice professionals.
Vending – Cafeteria Loss Prevention has been recognized for what it can be, in company after company: A significant residual Profit Enhancement reducing the Cost of Goods1% to 3% in two to four quarters, remarkable results that has become part of the day to day operating reality and the culture of these companies.
As Pogo once said, I have seen the enemy and he is us. And so it is with the progressive path an incorrigible segment of a Vending company’s employees will climb.
The Vending Theft Ladder7. Cash Theft 6. Product Theft 5. Property Theft 4. Theft of Fuel 3. Theft of Time 2. Fuel Waste 1. Productivity Waste
As the AM blogger for Loss Prevention I hope to facilitate the internet discussion on a slice of the business that can transform the bottom-line.
April 2nd, 2008 at 2:13 pm
Mark,
Great to know there is someone out there looking at losses in the vending business. There is an untapped oportunity for vending losses and no one who has expertise to track the thieves down and put them away. I will be watching to see more cases from you in the future.
April 12th, 2008 at 4:47 pm
Scott,
If you pull up my website, http://www.losspreventionresults.com and click on the black box on the right you will find some vending theft cases I have explained in a format I call Special Investigative Bulletins, SIBs. I hope to update the site in the next month or so and will add at least a dozen new interesting SIBs as well as more covert videos of thieves caught in the act.
I just returned from a client visit in Ohio and interrogated a Vending Attendant after a successful investigation (the investigation was done by my client using the training, technologies, and tactics I brought into the company) and he confessed to stealing $3,000.00 in 8 months. This was the second employee in this district they had gathered evidence against who I then sucessfully interrogated, and they also exposed a Security Guard (on covert camera)who was using his keys to get into the cafeteria office, grab the vending keys that were left in an unlocked desk drawer, and then carefully skim cash from the machines at 2am, and put the keys back. It’s an amazing video, I showed it at my recent seminar at NAMA.
CAFETERIAS - keep your vending keys in the safe!!!
This district of this client is seeing a significant increase in not only the sales in the three locations where the three thieves were dealt with, but many who also were skimming probably have stopped. I’m talking a couple of grand a week is now coming in and the meter noise is suddlenly clearing up!
Anyway thanks for being the first person to kick start my Loss Prevention blog!
Best wishes,
Mark Manney
May 29th, 2008 at 3:58 pm
This should be a great place to see what might be next. I have dealt with more theft in the past two years and each one had thier own methoeds. The good thing is a theif just gets bolder and bolder, so if they have been under the radar they always pop up sooner or later.
We have had theives in cafes and vending. Cameras make for a good set of eyes!
June 1st, 2008 at 8:38 pm
Don,
You are right on target with the bolder and bolder unique MOs. I have found this is true with both individual thieves and multi employee conspiracies. I coined a phrase describing (unexposed) theft accelaration in the 80’s labeling it the Greed Growth Factor. I’ll be updating my website soon with a link devoted to it, and another factor that often interconnects to it I call The Most Dangerous Dishonest Employee.
My hope is this blog does highlight the ever changing - forward thinking technologies, tools, and tactics of Vending/Foodservice Loss Prevention…as there are documented and proven profit enhancement programs involving all three that have a residule ROI that has to be researched with the companies it has taken place in…to be believed, (1% to 3% residule COGs reduction is just unbelievable until you talk to the owners/operators who are experiencing it).
As far as cameras there are two categories I get involved in and have extensive Vending/Cafeteria experience in the last six years:
1. VENDING - A covert machine/changer/truck camera called VendingCam…AKA…VC (as I like to call it…I’m a Nam Vet and this is an inside joke with myself). In the last three years VC has ambushed dozens of dishonest technicans, route drivers, CSMs, route jumpers, two security guards, many of my client’s client’s employees, as well as numerous outside deadbeat parasites with crow bars, keys, and one recently with a hook type tool. Combined with proven tactics it is more then a set of eyes…it is a powerful Loss Prevention detection and deterrent technology.
2. CAFETERIAS - Digital cameras (remote view) or Closed Circut Television (CCTV). Combined with TAMPER EVIDENT BAGS (three different types/sizes - Vending Attendant Collection, individual Cashier, deposits) has the cabability of reducing the opportunity for undetected theft (of product and cash) tremendously. It is not uncommon for cafeterias to experience a 4% to 5% COGs reduction (paying for the system in the first month) the profit enhancement is immediate and brings my favoriate LP word, residule.
Thanks for your comment. The face of Vending/Food Service Loss Prevention is changing.
Mark Manney
Loss Prevention Results (LPR)
June 5th, 2008 at 4:09 pm
Tamper evident bags are a great chain of custody way to collect and transport the money from the machine to the safe or money room. When you combine a strict Tamper Evident Bag Policy with security cameras, you can tighten down undetected access to the money.
We have been using Tamper Evident bags for about 1 1/2 yrs. and appreciate the extra control they provide. They are well worth the investment. We even have custom made bags for our company use.
June 5th, 2008 at 5:23 pm
Scott,
Appreciate the comment.
Scott Geiser is the Loss Prevntion Director of Valley Vending Services (VVS) a former client of mine (and an example both as a company and as an individual leader within a forward thinking company) of how a customized Loss Prevention program can positively impact a Vending/Food Service company’s bottomline.
Using Tamper Evident Bags (TEBs) in multi-employee Vending Attedant accounts (as well as in cafeterias) along with a tight Cash Chain of Custody (with a customized Standard Operating Proceedure, S.O.P.) is a paradigm mind shift for an operator, but it has proven in VVS and in another client (Sanese Services) to increase sales, reduce cash shortage, reduce skipped collects, reduce missing collects, increase individual accountability and increase profitability to a level that wouldn’t be believed by most reading this.
In the Training, Technologies, Tools, and Tactics of the LPR program, TEBs (a tool) and a customized Cash Chain of Custody S.O.P. (a tactic) have combined to not only prevent losses but enhance profit to a level these two companies can attest to.
This tool and tactic have been around the big box retail world for years (I helped spread it in the early 90’s) and this one/two punch will find it’s place in our industry as (if you will excuse the pun) the Loss Prevention Results from forward thinking companies like VVS & Sanese Services spread.
Mark Manney
LPR
June 10th, 2008 at 12:37 pm
Mark, how effective are electronic locks for vending machines? Does the costs really offset the potential loss to theft if other controls are in place? If so, what are the best types of electronic controls?
Don
June 16th, 2008 at 4:01 pm
Don,
Sorry this has taken me so long to reply, been traveling. My Father always told me, “If you don’t know a lot about a subject never pretend that you do.”
That said, none of the 40 odd vending companies or divisions I have been in have had electronic locks, and past NAMA shows I have not delved into them, but electronic locks (Machine Access Control) has to be a powerful deterrent. I know the cost is a major consideration but usually (eventually) technology costs become lower and lower with time.
Hopefully there is an Operator reading this blog that can facilitate this particular conversation and e-mail in their real world experience on their cost Vs. ROI to share with the readers?
To answer your last question, “What are the best types of electronic controls? I use covert real time GPS (one system every 25 or so vehicles) with covert machine/changer/truck cameras (VendingCam) with sniper focus on the hard corp incorrigible (13%) along with shotgun communication to the vast majority (who will not steal if the risk outweighs the reward) the 66%. Only 21% will never steal no matter the opportunity. (See my website Vision Statement for the study that backs up these percents).
Dollar for dollar one (moveable) real time covert GPS system and one (moveable) covert machine/changer/truck camera used with sniper focus and shotgun communication will (I have proven this over and over and over) provide the best Loss Prevention technology ROI.
Mark Manney
LPR