The Facts Speak for Themselves

Shoplifters steal $237 worth of goods per incident, but employees lift much more

• By Michael Irvin
• Jan 01, 2013

The numbers speak for themselves. Reducing employee theft within your organization is one of the quickest ways to grow your bottom line. On average, employees steal an average of $1,944 per incident—more than eight times higher than shoplifters.

Employee theft is the single largest cause of shrinkage in retail environments today. Millions of dollars disappear from Point-of-Sale (POS) terminals in retail stores on a daily basis due to fraudulent or criminal employee activities. The ability to effectively detect and deter cashier-related shrinkage is a top priority for retailers worldwide. One way that retailers are confronting this epidemic is by identifying the telltale patterns of these crimes—so-called POS exceptions.

Exceptions to the Norm

POS exceptions are transactions that differ from the norm. These can include 0149 Manually entered values—a sign of system manipulation, product returns with no item, customer or supervisor present and no-sales when the cash register is opened but no transaction is registered.

The art of identifying and capturing these exceptions is the basis behind exception-based reporting solutions. Incorporating video data as a complement to the transactional data captured by your typical POS-based exception reporting tools elevates the effectiveness of these tools by delivering video images accompanied by textual data, resulting in a more complete picture of any event in question.

By establishing a set of user-defined exception-based rules, loss prevention (LP) managers can receive real-time alerts when events or actions fall outside of these parameters. Now, LP departments can leverage transactional data and surveillance video to identify trends and capture details that can lead to improved loss prevention, improved operational efficiencies and overall store performance.

Capture the Exceptions, Capture the Criminal

With POS and other store systems currently networked, retailers are using IT strategically to streamline business processes and optimize profits. By synchronizing network surveillance video with POS transactional data in conjunction with video analytics and user-defined exception- based rules, retailers now have a powerful tool kit for analyzing and detecting fraud. This “intelligent” approach to loss prevention can help uncover errors, training or skill deficiencies and questionable or dishonest practices.

Enhancing Your Loss Prevention Initiatives

With the advances in network technology and network video integration, surveillance systems have the ability to monitor, identify and tag transactions deemed to be suspicious. Intelligence inherent in some network digital surveillance systems can alert staff to potential thefts and suspicious behavior while it is happening.

Reports can be generated by a variety of parameters including cash register, time, employee number, amounts, exception kind and transaction type and accessed from any computer connected to your network. When coupled with the relevant video clips, the reports provide a true picture of what truly transpired.

Now you can leverage technology and be proactively driving the investigation—actively uncovering errors, inefficiencies and questionable or dishonest practices. As a result, you detect sooner and respond quicker, enabling a more timely resolution of issues encountered. This enhanced responsiveness and effectiveness to your loss prevention initiatives is reflected not only in your organization’s bottom line but in your department’s financial validation as well.

This same intelligence opens the door to new in-store research methods that can positively impact a store’s operations and bottom line.

Analytics, a Natural Extension

Video analytics is a natural extension to video supported exception- based reporting and is not limited only to loss prevention activities. Video analytics can help increase operational and employee efficiencies using video you may already collect.

Examples of a few of the video analytics that can be enabled include queue monitoring, dwell times, people counting and real-time alerts when aisles are obstructed.

Video analytics can be a valuable and effective tool helping you detect gaps in training, management or helping you identify and praise good behavior. Analytics can help you grow revenues by transforming the way your customer data and behavior is analyzed and reported.

More Coverage, Fewer Cameras

With IP megapixel cameras, and the new hemispheric and panoramic video formats, end users are assured of greater detail and more coverage with fewer cameras.

While resolution is the desired outcome to your investigations, video resolution is key to capturing the details critical to that investigation, and high-detail resolution is what IP video is all about. Traditional high-resolution analog cameras can provide the equivalent of only 0.3 megapixel resolution, where network digital cameras can deliver resolution exceeding 10 megapixels, cover a larger area and provide superior digital PTZ capabilities over analog counterparts.

The larger-format images provided by megapixel cameras, combined with their higher pixel counts, result in an image that can be examined using postevent digital zoom without pixilation.

Raw images from analog cameras and megapixel cameras can look very similar, but looks can be deceiving. The differences become apparent when you zoom in, trying to identify who is in the photo.

Network Video

With nearly every aspect of computerized and networked retail operations, it’s natural to add video surveillance to the list. The advent of digital video IP cameras has allowed surveillance video to enter the IT world. IP-based surveillance solutions give you the power to have zero point of failure through the use of industry standard architectures such as SMART, RAID and SNMP. Now you can be notified of potential or real problems before they negatively impact your system.

Network connectivity also gives you the option of connecting all of your disparate systems such as POS, access control and cooling systems to your digital video recorder giving you a complete picture of your operation, in realtime and in review.

Cost of Ownership

While some components of an IP-based video surveillance system may be more expensive than analog alternatives, when the total cost of ownership is calculated, IP has been shown to be more cost effective overall due to reduced cabling costs, increased storage efficiency, the ability to re-purpose resources and provide IP migration that allows users to purchase and keep low-cost analog cameras for less demanding locations.

Anytime, Anywhere Access

IP-based video surveillance systems allow users to capture and distribute video, audio and transactional data over any kind of IP network. With an Internet connection, authorized users are able to monitor multiple stores from a single location. By having your cameras connected to a network, you can achieve a higher level of surveillance with fewer cameras and less people.

The Benefits Are Many

Users that have deployed intelligent network video surveillance solutions reference a number of benefits as a result of their deployment, including reduced shrinkage, improved operational efficiencies and customer service, synchronizing video data with POS data records and the ability to capture and interpret conversion rate data.

By leveraging network digital IP cameras and exception-based reporting, the tools are now available to retailers to effectively detect and deter cashierrelated shrinkage. LP departments can now leverage transactional data and surveillance video to identify trends and capture details that can lead to improved loss prevention, which in turn leads to improved operational efficiencies and better overall store performance.

This article originally appeared in the January 2013 issue of Security Today.