Special Focus: Retail--Stop POS Shrinkage in Its Tracks

Retail shrinkage focuses on CCTV, integrated systems

For years, surveillance systems have recorded thefts and other incidences, including those at the Point of Sale (POS) location, for future investigation. Now, video can be used to stop incidences as they happen. To do this, integrators need to quit thinking of surveillance systems as simply repositories of what’s been seen and recorded and, instead think of cameras as sensors in a system. Why should your customers have to search through recordings to locate the incident when, if fact, they can stop it as it happens?

For most customers, any cuts in shrinkage will typically go directly to the bottom line. That’s because, as reported by the University of Florida’s National Retail Security Survey, the total shrink percentage of the retail industry in the United States is 1.52 percent. Thus, any lowering of that figure adds to the profit line—and retailers operate on very thin margins.

The shrinkage discussed is only that caused by employee actions at the POS terminal, not in the warehouse, at the docks or elsewhere. POS is the source for major shrinkage problems. There are different ways to manipulate a POS system, such as a cashier giving customers unauthorized discounts, creating fraudulent returns, manually entering lower values in the system or making a no-sale, which means that the cashier opens the cash counter without registering a sale.

Traditionally, POS fraud is fought by surveillance staff monitoring a POS terminal or by manually searching through surveillance video recordings. Modern POS systems can have automatic alerts when specific exceptions are detected. Also, exception reports and listings based on employees, refunds and terminals are possible to detect with modern systems. Modern networked-based POS systems can also include network video to POS exception listings, giving quick access to detailed information of what happened.

Today, most retailers still have to search through their recorded video to catch an incident. As they will tell you, it can be extremely time-consuming to view video in a search to catch a clerk pilfering. Even in cases where the retailer has associated video and text for faster searches, the incident is still discovered after the fact. In these cases, high-resolution cameras can enable extremely sharp digital images to capture the detailed faces, numbers and small objects while also capturing the text that appears on the customer’s receipt. The POS solution then associates the text/exception with the corresponding video and records it on internal hard drives.

To investigate a suspicious transaction, loss prevention personnel enter receipt text, such as “no sale,” “void,” “return,” or certain brand names. The surveillance system retrieves the associated video and transaction text very quickly, eliminating the practice of viewing hours of recordings. Personnel can search by register, time, date or motion in a target area and view the POS text as they review images. Although this is a much better alternative than formerly undertaken, it is still after-the-fact.


Camera analytics increased loss

prevention results

There are a variety of ways that a camera, which is often already installed, can really add to its return on investment by acting like a sensor for the entire system with the help of video analytics to stop shrinkage incidents as they happen.

Perhaps a retail jewelry store wants an alert generated whenever a certain object, such as the expensive necklace in the front showcase, is moved. With a simple motion detector, if the necklace is moved the system sends an alert to store management.

The system could also detect suspicious activity for immediate follow-up such as people entering low- traffic areas that could be used for tag switching, undue motion around POS stations and after-hours activity around POS stations. At the changing room, the system can automatically compare merchandise carried into the changing room versus what is carried out.

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