Retailers often scoff at the thought that loss numbers are quantifiable. Knowing precisely how much you're losing would require precise knowledge of where loss is occurring. The assumption, then, is that if you knew how much you were losing and from where, you'd certainly be able to put a stop to it. Therefore, smart retailers spend less time trying to quantify and qualify loss and more time concentrating on preventing it.
The P in LP (loss prevention) is at the core of the philosophy at auto parts and accessories retailer Pep Boys (Philadelphia), where Samuel J. Rowell is VP of LP. Back in 1996, Pep Boys ran disparate LP and risk management departments. The risk management department was charged with managing general liability, workers' compensation, accident claims, and safety issues, while the LP department was responsible for reduction of shortage due to associate theft, shoplifting, and procedural error. The retailer's then 20,000 employees were inundated with separate training and awareness campaigns from each department. Much of the material presented in each was redundant, and the effort to track the results of those campaigns was best described as futile and disorganized. Employees in charge of LP and risk management compliance were bogged down by labor-intensive tasks. They manually reviewed associate training attendance sheets, conducted paper-based audits, and placed seemingly endless compliance-check phone calls with store and district managers. By the time LP and risk management compliance personnel got around to the creation, compilation, and dissemination of reports for corporate management, the data was weeks old and irrelevant.