Canadian Retailer - Store 2014 - 58

2014 ERA AWARDS LOSS PREVENTION

AWARD WINNER

LOSS PREVENTION CATCHES FIRE
Employee accountability and manager training keys to
reduce internal fraud and theft
IN 2010, the Cineplex Loss Prevention department's internal fraud investigations led to the
dismissal of 116 employees and 41 arrests. The
success was the result of sophisticated investigations of transaction data, management training programs and security cameras.
But the amount of work the LP department
had undertaken internally hampered its ability to secure other areas of the business. What
the company needed to do was find a way to
prevent internal theft. The result was a shift in
focus from detection to prevention and reinforcing measures that had already succeeded in
lowering incidents of theft, like training managers to detect theft.
Cineplex initiated a three-year plan in 2010
to secure its assets and lower internal theft.
One of the first steps the LP team took was to improve intelligent data mining techniques that helped them rank high-risk
POS key strokes and transactions by employee name and routinely analyze transactions of employees who ranked high on
this list. They wrote transaction inquiry letters that made employees who were playing with their POS device or had training issues accountable for their actions. These letters helped LP
separate naïve employees from employees who were making
fraudulent entries.
In the second year of the initiative, the team continued to
firm up its security by speaking directly to employees. The
team delivered ethics training, wrote a code of conduct for
employees and managers, provided new e-training modules
to management, and rolled out a cash management procedure
manual that emphasizes the importance of each individual's
personal accountability.
Along with these measures, the LP team developed a monthly communication and revamped it to speak more directly to
the people most likely to steal
Big Results

Cineplex's internal audit committee commented that the
results of the three-year LP initiative were "truly remarkable".
In 2013, the LP department investigated and dismissed 62 employees-down from 116 dismissals in 2010. Of these 62 employees, only six people were arrested, down from 42 arrests in 2010,
a reduction of 85 per cent. The team had reduced the average
loss per shift by 22 per cent, compared to 2010.

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Cracking down on loss in theatres.

Cineplex also measured the three-year initiative against projected annual losses, the
amount of money they expected to have lost
if they had not caught the theft. In 2010, the
company projected losses of nearly $600,000.
In 2013, the company projected it would have
lost nearly $110,000.
Along with better shrink numbers, the more
direct approach to loss prevention has helped
to improve the workplace environment, says
Scott Behnke, Cineplex's Vice-President of
Risk Management.
"Thanks to our earlier detection and prevention programs, we've seen a significant reduction
in shrink. And while that's important, perhaps an
even greater benefit is to our working environment. All Cineplex employees understand that
the company takes an ethical and transparent
approach to loss prevention in our theatres."
Behnke says the program educated Cineplex on the importance of staying current and
leveraging expertise within the organization.
"This program made use of new technology, as
well as the expertise of multiple risk disciplines,
such as internal audit, loss prevention and our
analysis and controls group. We saw strong
engagement at the theatre level, supported by
training delivered during road shows."

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Canadian Retailer - Store 2014

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