Using Video Surveillance to Audit Your Retail Business

Throughout my career, I’ve seen some outrageous behavior captured on surveillance video. From performance and productivity issues-like employees showing up late and doing personal things on business time-to outright theft, I’ve seen it all.

As an owner or manager at any level, it’s disheartening to think of what can go on in your organization when you are not there. You do your best to set high standards, but you can’t be there 24/7 to monitor what’s taking place. Most employees do a good job and can be trusted, so it’s even more disappointing when a few people prove otherwise.

It is for this reason that many organizations are leveraging video data to conduct regular operations audits. By reviewing snapshots of video throughout the day, they’re able to get a more complete view of how their business is running. Video-based operations audits have helped many businesses increase return on investment (ROI) and boost sales, revenues, and profit by finding theft and fraud they didn’t know existed. Video audits also enable organizations to uncover operational, compliance, and employee performance issues, which if left unchecked can impact their ability to successfully provide services and maintain their reputation.

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In my view, video is the best method of acquiring this information since it captures activity that would otherwise go unseen. Video allows organizations to see operations as their customers or clients do, unfiltered and the way it occurs when no authority figure is present.

For organizations interested in auditing their operations with video, there are several options available. Some video surveillance companies offer operational audits as a managed service, where they review the video for you based on a list of key performance indicators (KPIs). Others outsource the service to a third party, while still others offer user-friendly video management software tools that allow organizations to manage the audits in-house. Below are a few things to consider before making your selection.

Establish Your Objectives

First, identify what your organization wants to achieve with an operations audit. Do you only want to see exception-based reports with corresponding video, or are you also interested in health and safety issues, the quality of your customer service, and how your employees are performing? Organizations may want to consider a solution that, in addition to supporting audits, integrates point-of-sale (POS) transaction data with video analytics like queue length monitoring, people counting, or dwell time to help assess speed of service or conversion rates and measure promotional success and other behaviors. Whatever your requirements, it’s important to identify that wish list up front and make sure that your preferred solution is flexible enough to meet those needs.

Cover All Areas of Your Business

Theft and loss can occur throughout your organization, so make sure your audit covers all areas of your business and can quickly alert you to signs of trouble.

Retail organizations can benefit from a solution that integrates video with POS transaction data to support advanced loss prevention investigation capabilities. Owners and managers will also appreciate the ability to set up custom screenshots, so they can see at a glance what’s happening in their locations and even create alarms and alerts so that they are notified when, for example, a backdoor opens at 3 a.m.

The most sophisticated thieves won’t leave an obvious trail. They will cover their tracks by using alternate methods like stealing a key to open a cash drawer or sneaking merchandise out your back door after business hours. Leveraging the video system you already have in place for physical security provides you with a convenient and cost-effective way to keep an eye on your assets.

Consider Who Will Be Viewing the Video

If your organization doesn’t have the resources to review operational audits, you can always opt for a managed service to have this done for you. However, you know your business best, so take the time to ensure that the person managing the process knows what to look for. If a third-party auditor is just checking off a list of your ten predefined KPIs, they may miss other important issues.

For example, if you are a quick-service restaurant or fast-casual restaurant, an auditor focused solely on cash handling might miss the equally important fact that an employee is cross-contaminating food. It’s essential to ensure that your auditor truly understands your operation and what constitutes good performance and good service. Otherwise, the process is much less valuable to you. One of my recommendations is to have a top performer within your organization view the video in parallel with your external auditor a few times to evaluate it based on your standards.

High-Quality Video Makes the Difference

There’s no point conducting an operations audit if the images are blurry and it’s not possible to see what is taking place in the video. Make sure the solution you select offers clear, high-definition video with the level of detail required for investigations and a successful litigation defense, if needed.

I can tell you from experience that it makes all the difference. I know of one organization that was facing litigation after a customer slipped and fell inside their premises. The injured person claimed that the fall was due to a wet floor, but their allegation was disproven once investigators reviewed the recorded surveillance video. Because the images were clear, investigators were able to zoom in and see that the customer was wearing flip-flops and had tripped because of her footwear, not because of a wet floor.

By considering the above points, you and your organization will be better equipped to decide which type of operations audit best suits your needs. Remember to do your research, ask questions, and request a live demonstration of the solution.

SIDEBAR: Staying Current with Your Audit: Getting Smart about Smartphone Use

Successful retailers continually tweak their product lines, customer service, and advertising strategies to keep up with trends and remain competitive. They are also quick to adopt technological innovations that help them reach customers more effectively or improve operations.

But many companies overlook the impact that simple technologies, such as smartphones, may have on security. Consider these three, real-life examples of how smartphone use is contributing to retail losses.

Perfect Timing for a Theft. Using their smartphone, an employee can easily alert criminal partners when the ideal situation exists to commit a robbery. Maybe the manager has just opened the safe to make a night deposit, for example, or has just closed the store or restaurant for the evening. All the employee needs to do is text an outside accomplice to alert them to the ideal opportunity for a robbery.

Would You Like (Free!) Fries with That? Another smartphone strategy involves friends or accomplices texting an employee to ask for freebies to be included in their order. This is common in a quick-service restaurant environment, especially at the drive-through window, and is also seen in retail rental operations and houseware deliveries. It can snowball into a major problem if the retailer doesn’t act quickly. As one employee continues to get away with it, others will be more likely to adopt a similar practice with their friends.

Special Orders on the Side. Theft can also occur when a cashier doesn’t ring in the entire transaction contents using the main point-of-sale (POS) register system, but instead uses a smartphone to tally up the cost and collect payment from the customer. This type of theft occurs most often at the end of the night when an employee is closing down a register. This theft is not detectable using exceptions and transaction-based reporting methods. In this case, managers will need to rely on their video surveillance to prove a crime took place.

Updated policies around smartphone usage combined with effective video surveillance helps retailers ensure that their policies are being followed, so the opportunity to commit these crimes never arises. If a theft does occur, video evidence can help you better understand the circumstances that led to the crime and help you take steps to prevent similar incidents in the future.

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