THE LOSS PATROL

Adam Blair

Technology continues to play a significant role in supermarkets' loss-prevention efforts -- mostly positive. The use of more open computer systems, in virtually every part of the organization, however, has provided opportunities for a few high-tech thieves to commit computer crimes. For the most part, however, participants in SN's Executive Roundtable applaud technology's ability to combat shrink, whether through cashier-monitoring software or handheld radio frequency devices that help establish tighter controls for back-door receiving.

SN: Is today's supermarket easier to protect compared with five or 10 years ago?

MIKE HUBERT: Probably it's more difficult, because the biggest reason for losses has shifted from external to internal theft. Typically, it is more difficult to prevent internal theft, because when you lose money through the people entrusted to work a point of sale, it is more difficult to manage and the toll becomes a lot higher. For this reason, cashier monitoring [software] is a good solution; it gives more stringent control at store level. In addition, we used to put cameras at the front door and aisles of our stores. Now, we even have units in our office and customer-service areas. It's regretful, but this is a natural evolution that needs to occur.

JACK SCOTT: With open computer systems now, [stealing] takes a different type of thief. You wouldn't have heard about cases of large-scale theft from manipulating computer programs five or 10 years ago. Of course, there's still a lot of general cashier activity. But as we move toward a more managed inventory, supermarkets' shrink numbers will improve. We've seen it in other types of retailers, as they use perpetual inventory and increased cycle counts.

JOHN GRANGER: I haven't seen [cases of computer crime] personally, but that doesn't mean it is not out there. We keep an eye out for it. Specifically, we are looking for things such as intrusion into our system -- that is the scariest. We are also looking for inventory manipulation. Those are the primary areas that concern me.

To fight that, we keep building better firewalls, and we are at the point that we think we have managed to keep professionals out of our systems.

BOB SCHOENING: Technology has made things a lot easier for people in loss prevention, although it's still a tough issue. Technology has provided us the tools to go back and review situations. If you go as far back as manual checkouts, there was no way to prove, beyond a shadow of a doubt, that theft was actually taking place.

Of course, schemes can be more elaborate today, with things like coupon fraud, but technology allows more detailed histories, and it lets us zero in on the areas where the problem has taken place. The body of evidence is stronger when the security staff is confronting individuals who might be doing something illegal.

SN: What are some of the key technology advances in the loss-prevention area?

GRANGER: I feel that electronic article surveillance is going to be part of the real answer. That is a biggie, but the monitoring of cashier performance is what pays dividends. It is a strong benefit to have the ability to electronically watch cashiers from the office or another remote location. These are big steps. Our industry has seen a lot of misses, but the ones that have succeeded have been incredibly strong.

SCOTT: There are systems today that reduce shrink -- taking video of everything, having tighter controls on cash, making multiple cash drops and cashier control software.

SCHOENING: With more use of video surveillance over the last several years, we've been using new technologies to store the video images. The big problem with storing video is the huge amount of time needed to go back and look at the data. It becomes fairly laborious to find a specific incident. With some systems you can type in a time to find a specific checkout function, but with other video surveillance, for example in a front office, you can't always tie events to a time clock.