The loss prevention community has come a long way since we entered the business. Today, it is much more than a mere “lock 'em up” approach. Loss prevention executives have become business partners with other departments, helping human resources, operations, and even marketing move the business forward. Technically, computers, data mining programs and state of the art camera systems help resolve cases earlier, with lower cost and reduced manpower. Yet, some things never change, such as the need to interview.
Most companies have moved away from general loss interviewing, favoring instead to talk with associates only when there is evidence of wrongdoing. This more conservative approach was undoubtedly the result of increasing lawsuits or personnel problems from the interviews. Yet, the general loss interview, as those who still do them can attest, can provide benefits obtainable in no other way.
The general loss interview is designed to investigate high shrinkage departments and stores. The debate continues about the exact percentages of shrink attributable to shoplifting, employee theft or operational problems, but without question all three areas contribute losses to some extent. The mix of these three areas certainly changes from location to location and depends on any number of factors, but to successfully attack the problem you have to know what it is, and that is what the general loss interview is for. Unlike an interview used to obtain a confession from a dishonest employee, the general loss interview is not specifically targeted at one employee or method of loss. To a large extent, the general loss interview is gathering intelligence to diagnose the cause of shrinkage in a location or department.
Overcoming Organizational Resistance
Many loss prevention departments gave up doing these interviews because of resistance from human resources or management. In many cases, the resistance was the result of a misunderstanding on how the interview was to be conducted. The general loss interview differs dramatically from a confrontational style of interview many investigators use to obtain a confession. Management’s impression that a confrontational approach was to be used understandably caused them to question whether they wanted to submit possibly innocent associates to the experience.
It is helpful for LP interviewers to draw a clear distinction for management between the non-confrontational general loss interview and an aggressive attempt to obtain a confession they may have been exposed to previously. Many investigators still do not use the non-confrontational structured approach to interviewing a dishonest employee we advocate, preferring instead, to directly accuse the associate. Thus, the only experience management has observed is confrontational interactions between interviewers and employees during these conversations. As a result, HR and management have had to deal with denials and tearful employees after they have taken part in the interview.
Explaining the flow and tone of the interview to HR and management helps them understand the non-confrontative nature of the interview. This also gives them an opportunity to voice questions and concerns about the proposed interviews, process and consequences of using this strategy.
Planning
If an organization elects to use general loss interviewing as part of its shrink reduction strategy, the second step is to educate the management team on its benefits and potential uses. While the interviews can provide a therapeutic boost for ailing high shrinkage stores, they can also uncover a variety of problems which may make work for HR, operations and management in general. It is better to help operators anticipate what might be discovered so there are limited surprises at the conclusion of the interviews.
Not all losses are the result of theft. There is what we think is going on in the store and what really is happening. In some stores, management is so loose operationally that the shrink may be simply paper errors or it may have exposed the location to wholesale theft. Either way, the interviews are likely to spotlight the trouble. In our experience, general loss interviews will identify procedural and operational issues contributing to shrinkage. Sometimes this is an easy fix, and sometimes it requires an entire management replacement to bring the location back under control.
If outside theft is a strong contributor to shrinkage, the interviewer can often isolate the methods being used, times and the people involved. Once a clear base of intelligence has been established, the LP investigator can bring in cameras and personnel to actively combat the problem.
Management should also consider the need to replace dishonest employees identified during the interviews. We have used these interviews effectively for years, and there is a strong likelihood dishonest associates will be discovered in addition to operational problems. In a number of cases over the years, personnel of entire stores had to be terminated as a result of the employees’ theft admissions. This created a difficult situation for district managers who had not considered this possibility and had to scramble to locate replacements.
Secondary Issues
It is also not unusual for secondary information to arise. Over the years, we have uncovered sexual harassment, hostile workplace issues and poor management that must be fixed to bring the location back to effectiveness. Detailed facts and supporting statements after the interviews can help management deal with these issues without extensive extra work. Sometimes training problems contributing to shrinkage can be identified and addressed, either during the interview or with remedial training.
Another positive effect of the interview is personal loss prevention awareness training with each associate. The employee has individual meetings and speaks with the LP investigator - opening the lines of communication for future conversations. We have found about 30 percent of employees have knowledge or suspicions of theft activity by other associates, so these interviews often help focus investigators on problem individuals.
In the next column, we will look at the interview’s structure and the strategy of approach.