LOS ANGELES — Winn-Dixie Stores, Jacksonville, Fla., is reducing shrink, particularly at the front end, by letting employees know that hidden cameras are in place and what prosecution will cost them if they are caught stealing or committing fraud.
Speaking at the annual National Retail Federation Loss Prevention Conference & Expo here, Dan Faketty, vice president of asset protection, said the openness with employees about the technological system it has installed — and the technology itself — have helped reduce internal theft during the last six months by 39% and the amount per incident by 59%.
If the company is able to reduce shrink by 10 basis points, he added, that could add $7 million to the bottom line.
With 75% of its employees falling within the age range of 15 and 29 — the so-called Generation Y — and 70% of internal theft coming from the front end, much of Winn-Dixie's effort has been directed at those employees, who Faketty said account for 85% of front-end shrink, while those between 16 and 21 account for 80% of internal theft cases.
“But just catching people and hoping the problem will go away won't bring shrink down,” he said. “Just throwing people in jail is silly and counter-productive.”
Since installing the Smart Check technology late last year, “We have no secrets about what we're doing in our new training process. We make full disclosure in explaining how the technology works and how it impacts each employee by showing them exactly where the cameras might be located and how we track any numbers that are out of the ordinary.”
The videos shown to front-end clerks include interviews with former employees who have stolen from Winn-Dixie, including a pharmacy clerk who stashed away and stole $100 bills while being filmed by a hidden camera; a front-end clerk who scanned $5-off coupons 72 times on one order; and another cashier who didn't scan all merchandise and charged a customer $26.37 for an order worth $103.27.
“We want employees to avoid these mistakes and be aware of what happens if they are prosecuted for fraud and how that can affect the rest of their lives,” Faketty pointed out.
The initial training program for existing employees involved 2,700 individual sessions at each of Winn-Dixie's 520 stores over an eight-week period, Faketty said.
“We talked about honesty and integrity and about our zero-tolerance policy — that those who violate that policy will be terminated, prosecuted and required to reimburse the company,” he said.