A shoplifters’ ranking system rates Best Buy 7 over 10 in difficulty, because of the multiple cameras covering almost every blind spot, and because of the diligence of the employees in identifying shoplifters. Once a shoplifter is identified, a CCTV screenshot is forwarded to all Best Buy stores, and the shoplifter is no longer allowed into any Best Buy store.
Best Buy also has a strict no-touch policy, which reminds its employees not to touch any suspected shoplifters once they exit the store. So strict is this policy that they have fired employees over it.
However, Best Buy’s loss prevention policy and procedures depends less on hardware and data, or watching shoplifters and customers, according to former vice president of enterprise fraud and risk management at Best Buy, Paul Stone. Rather, it focuses on the employees.
Best Buy Loss Prevention Policy and Procedures
Around 87% of employees never even consider fraud—until they do it. But when they do, it’s extremely costly. Ninety-five percent of all employees commit fraud one way or another, from minor to major offenses. They make up 43.9% of company losses, and run away with 5.5 times more than what shoplifters manage to sneak out with.
As a result, Best Buy starts from the inside and works its way out.
High-trust work environment
According to the California Restaurant Association, one of the main reasons employees steal is because they feel wronged or unfairly treated. Tackling this challenge with yet more cameras and procedures would not lessen the emotions, and so it would not lessen the employee theft.
To make sure employees at the store level were being listened to, the loss prevention department at the Best Buy headquarters let store managers and line employees contribute to the loss prevention policies. They assume it’s the people in the stores who know their own areas the best, and who would also know best how to reduce loss.
At the same time, there is monetary incentive. The more the company saves on the projected shrinkage, or loss of inventory, the higher the possibility of a related bonus. This keeps it in the employees’ interest to join in loss prevention. As a result, they see the company as something they keep afloat together.
To make this kind of loss prevention consistent and in constant development, Best Buy started the Integrated Business Leaders program. With this program, the loss prevention officers were invited to learn a different discipline related to store management, retail, inventory, and the like. They had to learn in the store itself, and get a better feel of what the employees do.
As they loss prevention officers learned the other disciplines required to run a Best Buy store, they could pinpoint possible tensions and opportunities to steal or commit fraud. At the same time, they could empathize with employees on the forefront of loss prevention, and help develop strategies to make them feel listened to and fairly treated.
Product process rather than loss prevention
In keeping with the attempt to stay employee-focused, Best Buy also changed the way it ran its retail management. They integrated people with different disciplines into multi-disciplinary teams. The team members used their respective expertise to give feedback and suggestions to one another about how the store could be managed, keeping them innovative and competitive.
Because of the new management style, Best Buy saw declines in productivity for the first ninety days. However, shrinkage would also lower and stay low. Over time, especially after those ninety days, productivity would improve while shrinkage would stay low. This stayed effective when employees were clearly showed what was expected of them in the ninety-day transition.
Best Buy Focused On Its People
No matter how much data and technology change, employees will still be at the forefront of loss prevention. Best Buy decided to turn that to their advantage and nip other causes of shrinkage in the bud.