STORES Magazine - March 2009 - (Page 79)

LPINFORMATION / EXCEPTION REPORTING Open Season on Shrink Exception reporting now a business imperative for Gander Mountain BY LEN LEWIS W hen Gander Mountain began pursuing except i o n re p ort ing some eight years ago, vice president of loss control Alan Tague predicted the nation’s largest retailer of hunting, fishing, camping, boating and outdoor lifestyle products would experience a 20 percent improvement in shrink rate. “I think that has proved out,” Tague says, but those results may only be the tip of the iceberg for the St. Paul, Minn.based company. “We picked off a lot of the low-hanging fruit the first year. As we build processes, exception reporting is helping us manage our business and we are becoming more pro-active in using it.” Tague, whose responsibilities include loss prevention, risk management and regulatory compliance with OSHA, EPA and ATF, says exception reporting has become increasingly valuable not only in uncovering fraudulent activities, but as a tool in everything from inventory control to merchandising. As the store base grew to 116, exception reporting quickly became a day-today business imperative. “At first, we got back to basics with physical security measures and operational controls like physical security and implementing good operational practices,” Tague says. Once this was accomplished, the chain began investigating exception reporting systems and chose software WWW.STORES.ORG “As we build processes, exception reporting is helping us manage our business and we are becoming more pro-active in using it.” – Alan Tague, Gander Mountain from Bloomington, Minn.-based Aspect Loss Prevention. Initially, Gander Mountain used the system “to look for fraudulent transactions and situations,” Tague says. “Right off the bat we had tremendous success in investigating [refund and credit card fraud and merchandise credit] cases and bringing them to a conclusion more quickly.” As things progressed, Gander Mountain realized that it needed to “apply more business logic to the process. This meant thinking about ways we could build re- ports to look for specific things and identify people who committed fraud.” This was accomplished through the development of AutoMIND reports, which search for high-risk transactions indicative of fraud, flag them and send the information directly to the stores. Returns were the first target. Gander Mountain developed a daily report that provides store managers with the opportunity “to review the product, who the cashier was and how many of these transactions were done,” Tague says, noting that this information enabled the company to leverage the resources of a smaller loss prevention team at headquarters and in the field. “There may not be a problem. But when the store manager questions the cashier about the transactions, it creates a perception of control and reinforces the fact that we are looking at these types of transactions.” Markdowns a concern While fraudulent refunds are often a big target in exception reporting, markdowns also are a key concern. “The problem was that the markdown process wasn’t well defined,” Tague says, so corporate “forced stores to enter reason codes for the markdowns into the POS. “We followed up monthly and when we found a store that was far higher than STORES / MARCH 2009 79 http://WWW.STORES.ORG

Table of Contents Feed for the Digital Edition of STORES Magazine - March 2009

STORES Magazine - March 2009 Contents Executive Editor's Page President's Page Movers and Spenders What Shoppers Think Take Your Laundry Online 10 Things You May Have Missed Numbers Worth Counting Full Price/Markdown Retail People Luxury for Less Q & A CONCEPT2WATCH Checkout Management Online Entrepreneurs Sustainability POS Online Strategy Online Scheduling SaaS Online Marketing Merchandise Security PCI Compliance LPinformation Supplier Directory Exception Reporting Industry Perspective Theft Research LOEB Retail Letter ARTS Update Point of View NRF News Retail Crossword Retail Industry Calendar End Cap

STORES Magazine - March 2009

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