D
Discount Violations
A longstanding and traditional benefit in the retail industry is the employee privilege of purchasing the store’s merchandise at a pre-established discounted price. Commonly, discounts range from 10% to 25% or even higher, depending on the store and its goods.
It’s a known fact some employees, particularly women who are actively socially, work not so much for the salary, but rather for the benefit of being current in fashion trends and the opportunity to purchase fashion goods at the employee discount price.
Operationally, the discount must be captured in either a POS program electronically, or manually, if the inventory and sales aren’t computerized, so as to balance the book inventory with merchandised on hand. For example, if a dress is on the inventory books at $100 but is sold to an employee for $75, failure to capture that discount will result in an inventory shortage, since the dress is still on the books valued at $100 and the reduced sale price is not captured for inventory reconciliation purposes.
Interestingly, this “inventory control” facilitates the loss prevention department’s oversight of abuses that do tend to arise in employee discounts. The “abuse” occurs when an employee or associate makes purchases for friends or relatives—people not entitled to the store’s benefits. Some retailers may not prohibit the passing on of this benefit to others as long as the book inventory is properly adjusted. But by far, throughout the industry, this benefit is exclusively for employees and their immediate family members residing in the same household or when given as a legitimate gift for which the employee receives no reimbursement or consideration. Employees detected in violating this rule are typically subject to termination.
There are two reasons employees abuse their discount privilege. One is to purchase items which are eventually sold to friends at the discount price. The other reason is to purchase gifts for a variety of persons who are not immediate family members and who the corporate policy defines as unauthorized recipients of merchandise purchased at the employee discount price.
One reason for disallowing the discount privilege to others is the risk nonemployees may return the merchandise at its full price; hence, the store could end up buying back at full retail what it sold for less than that amount. Indeed, some employees have been known to return such purchases to their own company’s stores for full retail and have failed to identify themselves as employees. If this activity is detected, it typically results in the employee’s termination.
More often than not, violations are handled by store management or the store’s human resource department, and the loss prevention department’s role, if any, is to provide investigative support, if necessary. For example, if there is suspicion or information that an employee purchase of a side-by-side refrigerator/freezer has been delivered to a given address, LP could be called upon to determine who lives at that location and his or her connection with the employee. It is not unusual, however, for loss prevention to conduct the interview with the offending employee, obtain an admission, and then turn the results over to management or HR for final adjudication.
Displays
The display of merchandise to attract buyers and enhance sales may be divided into two separate categories:
1. A display or presentation of goods which the customer and potential purchaser may touch, pick up, select, and make a decision to purchase.
2. A display or presentation of goods which discourages or denies customer access to those goods. The purpose of this display is to promote interest in the merchandise while simultaneously securing the goods, making their theft difficult or impossible. For the sake of this discussion, we’ll hereafter refer to the former as “open display” and the latter as “secured display.”
Some merchandise is displayed solely to alert the customer to a specific portion of the store where this type of merchandise is located. An example of this form of display would be an elevated mannequin of a child, which, seen from a distance, silently tells customers this is where children’s clothing is offered for sale.
Open Displays
The bulk of all goods offered by a merchant would be “open displays,” and the focus of most of loss prevention’s attention. Common and typical displays include table-top, counter-top, racks (T-stands, costumers, rounders, wall racks, etc.), bins, shelves, end caps, and goods stacked on the selling floor. In some stores, loss prevention has no voice in where or how much merchandise can be on “open displays.” Such stores risk display practices which encourage or even promote theft, as well as fail to take advantage of easy cost-free and equally effective strategies which tend to discourage theft.
Various ways displays can encourage theft include but are not limited to
• Elevated displays which block the view from aisle to aisle.
• Crowding rounders and other floor stands so customers have only narrow aisles to move through, and their hands and what they carry in and what they do with their hands can’t be seen.
• Rounders or displays with hanging goods which are solidly packed with merchandise whose density creates a hidden center space that can be used to stage bagged stolen merchandise for later pickup.
• Counter tops with heaped goods such that the surreptitious removal can’t be noticed.
• Displays of small, expensive, and sought-after goods in obscure or hard-to-observe areas of the store, which tends to invite theft.
The nub of the problem is trying to display too much merchandise in too little space. Display of goods is in the merchant’s realm, and the task is to sell the maximum number of goods in the shortest amount of time. Fortunate indeed is the LP executive who can convince the merchant, especially during major sales events and holidays, to place fewer racks on the floor and place fewer goods on counter tops and in bins. Effective indeed is the LP executive who can convince the merchant, during hectic times, to be more conservative in the display of high price-point goods and showcase them in a secure location, such as in locked showcases.
Examples of easy and cost-free strategies to display goods which tend to discourage theft include but are not limited to
• On “T-stands” for hanging merchandise, maintaining a balance of the number of hangers on each side of the stand—e.g., four leather jackets on each side, a total of eight jackets. If one is removed, its absence is most noticeable.
• On counter tops, displayed in patterns so the removal of an item changes or destroys the pattern and is noticeable—e.g., six boxed items can be displayed in a pyramid, three boxes upon which two more boxes are stacked, upon which a final box caps off the top. Or, if not boxed, presented in patterns of three with space between each pattern, assuming the merchandise lends itself to this approach.
• With hangers reversed (every other hanger with the “hook” in the opposite direction) to discourage grab-and-run thefts.
The preceding limited examples simply suggest aspects or dimensions to the display of open merchandise: space, balance, and patterns. The effective and creative loss prevention practitioner, supervisor, and executive should be sensitive to this and help by being instrumental in bringing about a storewide, if not companywide, understanding of the problem and ways to reduce losses.
Visual Presentations
Those displays which are not “open” pose their own unique loss prevention problems—namely, the potential for theft by employees, although customers will try, and some will successfully access the secured display and remove merchandise. The internal theft potential is exacerbated by the merchant’s demanding the removal of goods from one part of the store to be made a part of a display elsewhere in the store.
For example, a female mannequin in a showcase window is dressed in a blue spaghetti strap after-dinner dress, with a gold and blue silk scarf around her neck, wearing a string of pearls, carrying a sequin dinner clutch bag, wearing high-heel shoes, and a faux white fox cape draped over one shoulder. On her left wrist is a white stone bracelet. The display could have her standing by a chair, upon which pillows are casually tossed to create this smart look, to capture the imagination of the customer.
The visual presentation employee, a unique and creative persona, must imagine in his or her mind what merchandise will be needed. The employee will then go to each area of the store and select two, three, or more items in each category (three dresses, four or five scarves, various necklaces, various handbags, several pair of shoes, etc.) to eventually select the one best suited to create this artistic display.
This employee more often than not visits the many departments within the store and takes all these items before the store is open to the public and assembles the bulk of the merchandise in the display area, an area stacked with everything from Christmas decorations to 4th of July banners, and invariably goods for or from various past and present displays. It is not unfair to say that most display departments maintain only a modicum of neatness.
The question which begs to be asked is, for example, does the custom jewelry department manager know a visual presentation employee has 21 items of merchandise from that department? And what are those items? And what is the retail price of those items? And so it is with every department from which the display person pulled merchandise.
Clearly, there must be some control over these activities, and that control is a “loan book,” which is maintained in each department (in a department store setting) or a centrally housed “goods on loan” book (for smaller stores). These books are designed to record the quantity, description, price, date placed on display, and employee who removed the goods from the selling department. Similarly, the books record notations and signatures for goods no longer on display that have been returned from floor displays to the selling department. These loan books should be subject to auditing by loss prevention on both a scheduled and random basis.
This accountability is crucial to maintaining control and preventing the loss, intentional or through carelessness, of merchandise. It’s simply the nature of the beast.
Distribution Centers/Warehouses
We will discuss the various security and loss prevention considerations for the distribution center or warehouse operation in the retail environment. Distribution centers that serve both retail stores and direct to customers are considered here. Taking our discussion from the outside in, we will start with considerations of sites and their selection, eventually moving inside to the security operations.
The Distribution Center Site
“Location, location, location” is often spoken of as the determination of real estate value; in the distribution center world, this is true as well. Whether we have a say in the selection of a particular site, whether it is a new build or an existing structure, security professionals must consider elements of the location, such as crime rates, labor force, proximity to transportation hubs, and public safety access. Will the center be located in an area that has predominantly union workforces or nonunion? This factor can mean the difference between devoting significant amounts of time to union-related activities or not. If the center is in an area that has easy access to public transportation, the labor draw there may be significantly different than it is in the areas immediately surrounding the facility. Also consider the employment rate for the counties and state, as low unemployment rates can make it more difficult to recruit quality employees, causing a lowering of pre-employment standards just to attract workers. Another set of risk factors can come into play if the local labor market conditions make it attractive for the company to use temporary worker agencies to fill jobs. Each of these factors deserves investigation in planning appropriate countermeasures to the associated risks they present.
On the physical side of the distribution center, we are still working from the outside inward. It is ideal to have a site that contains some natural boundary delineation—elements that naturally communicate that we have moved from public to private space. This is a basic provision of Crime Prevention Through Environmental Design (CPTED) and it works. Often, this is nothing more than an expanse of open space between the public roadways surrounding the site and where the property is protected with physical barriers such as walls or fences. Use of fences and gated entranceways is a desired feature, especially in cargo trailer areas. It may not be possible to completely fence employee and public parking and access ways, but controlling traffic in and out of the trailer yards should definitely be pursued. The yard should also have a quality form of electronic protection in addition to physical barriers. Only if the distribution center is relatively small, maybe less than 200,000 square feet with the ability to move all trailers with merchandise or supplies offsite at closing, would secured cargo trailer lots be unnecessary. The property should be identified in such a manner that boundaries are clearly marked for trespass enforcement, should that become necessary. If the distribution center receives overseas containers and expects to be Customs Trade Partnership Against Terrorism (CTPAT) certified by the Department of Homeland Security, the containers must be inspected upon arrival to comply with standards for this certification. This means a gated and manned inbound container yard is the best approach.
Still outside the building, we must make some determination about parking areas for employees, contractors, and cargo containers. If at all possible, do not mix any of the aforementioned types of parking in the same areas. Do not allow employee or private vehicles within the areas designated for merchandise (cargo) containers, either inbound or outbound. The same goes for contractors or visitors. These parking areas should not be immediately adjacent to the building as well, leaving at least some open space barrier between. All parking areas must be lit to the degree that night surveillance via closed-circuit cameras or just plain visual observation is easily accomplished. Foot-candle or lumens measurements as standards can be used in order to quantify the level of lighting required and suited to the location. One source for determining the recommended lighting levels is the Illuminating Engineering Society of North America (IESNA). In their guidelines lighting handbook (1993), they recommended from .50fc at the fence lines to as much as 2.0fc for high vehicle activity parking areas.
Interior Space Design
Moving to the interior of the distribution center (DC), certain design characteristics are desirable from both the antitheft and personnel safety aspect. Common to both the DC and corporate office settings are the concept of visitor controls. Unlike the retail store, in the DC we can “hold” visitors until they are accompanied or at least authorized for access. Having said this, a reception or security kiosk is the best method to control and announce visitors and contractors, as well as direct applicants. It is recommended that job applicants be processed in an area ahead of the general offices and merchandise processing locations in the center. In considering employee access controls, an effective approach is, of course, to use ID badges to indicate active employees. Badges are most effective when combined with electronic access control systems that can control days, times, and specific interior points to which an individual can gain entry. If the employee population at a given location is sufficient, a very effective means of entry control is accomplished by combining the electronic ID badge with optical turnstiles. These devices work well in conjunction with the receptionist, allowing only current employees and other authorized persons to enter the facility, yet minimizing the ability to “piggyback” through a doorway undetected. Again this feature goes far in keeping outsiders, terminated employees, or nonscheduled employees from entering undetected and is much more effective than the old method of showing an ID badge at the door to a guard who may not know that an individual is no longer welcome.
Since, in the retail distribution world, we are most often shipping and receiving products that are somewhat portable, wearable, or concealable, it is good security to control what an employee can bring or wear into the DC. Use of an employee locker room where outerwear and parcels not needed in the performance of the job can be stored makes good sense. Consider the issuance of clear plastic bags or purses. This space should be positioned before the DC entry point. Having the workforce enter and exit the merchandise areas without the aforementioned “extra baggage” makes it much easier to view and/or inspect employees as they leave. Exit inspections have proven to be a solid theft deterrent and to have a positive effect on distribution center inventory shrinkage. Be cognizant of items carried within the distribution center that may be commonly worn by the employee population. Examples might be jewelry or portable electronics. Efforts can be made to limit or identify personally owned goods so they can be easily distinguished from company-owned new goods. One company that sold a lot of watches in its merchandise offerings issued all distribution center employees company-branded watches, allowing only those to be brought into the workplace.
Consider enclosing an area or office from which to monitor and control all the security technology that has been installed for the property. In doing so, the general employee population, while aware of the presence, cannot observe specifically what is being monitored or reviewed; additionally, they cannot accurately assess the capabilities of the security technology. Maintenance of this posture fosters a deterrent effect for those considering the risk versus benefits of committing crimes against the company.
Communicate the Rules
Be sure to partner with human resources in order to construct policies that communicate the company’s (security) stance on issues such as access control, visitors, lockers, and exit inspections. Security-related policies help map the expectations of the company regarding behaviors in the distribution function and clearly articulate the disciplinary processes for failing to follow the rules. Well-written, well-taught policies will stand the test of both administrative-and labor relations–type challenges.
Transportation Controls
As earlier mentioned, it is recommended to control who goes where in a distribution center. As trucks and their drivers come and go, it is very important to limit the risk of loss through external and internal theft. Keeping drivers separated from the docks is a basic ingredient in risk management. An office or designated area should be provided for drivers to either present or pick up shipping/receiving documents. This area does not give the driver access to the dock and should not allow him or her to come in direct contact with either loaders or merchandise. In the case of what is known as “live unloads” (this is a scenario in which a driver must unload only a portion of the truck and then move on to another location), special dock areas should be designated for this type of activity, usually as close as possible to the office or designated drivers area. Some companies have gone as far as to physically separate even the live unload areas with fencing, creating a buffer space between where the drivers unload and then allowing the company personnel access after the driver has left. These additional controls can be applied in both the live receiving and live shipping routines. All such efforts make it more difficult for collusive theft behavior to take place between company personnel and truck drivers.
No movement of goods should take place on or off the property without the receipt of or creation of proper documentation. Usually, these are referred to as “bills of lading” and/or “manifests.” These are the legal documents that give authority to ship or receive a quantity of goods. They are the travel documents that accompany the trailer or container during transit. Careful inspection of these should take place as soon as possible when cargo arrives or as it departs. The best control points for this to happen are commonly referred to as “truck gates.” They are the portals into or out of (usually outdoor) areas where trucks and trailers are secured and stored. As previously mentioned, these yards should be fenced and electronically protected.
Trailer Security
Most distribution operations will expect arriving trailers to have been sealed at their point of origin, and an inspection of the seal is completed upon arrival. Seals are numbered, and each number is recorded on the documents that accompany the shipment. The numbers may also have been communicated electronically separate from the shipment to provide an extra layer of security against shipment tampering. Of particular interest is the seal integrity of inbound overseas containers. Careful scrutiny of the seal verification process is required if the facility is part of a CTPAT-certified company. Additionally, it is recommended that all inbound drivers show identification at the inbound inspection point. In general, loaded trailers stored overnight in a secured yard should be sealed and/or locked for general protection. If the yard cannot be secured, additional measures such as (king) pin locks and tail-to-tail parking should be used as a hedge against trailer theft. Also consider random patrols of any unattended facilities. Yard checks should be performed at close and opening to record or verify the presence, condition, and location of all trailers. Anomalies should be investigated immediately, of course. Finally, an assessment should be made as to the local crime rates and experiences of other adjacent properties to help validate the security investment for outdoor protection.
Pre/Post-Employment Offer Screening
This brief discussion offers some recommended screening protocols that should be considered for employees of the distribution center. In many cases, more in-depth screening is possible in the DC than in the stores due to a more centralized and larger human resources function. Also, the employee population is generally larger and somewhat more permanent. The following screening elements are recommended:
• Pre-employment criminal background checks
• Employment history examination and verification
• Post-offer medical questionnaire and review by or with a medical professional
• Verification of truthfulness of other information given in the application process, such as a check of the worker’s compensation system to detect undisclosed medical issues that could lead to future workers comp liability
• Social Security number verification, as well as identification document review
Some retail distribution centers have reported as much as a 20% failure rate on the criminal background check process alone, so it is important to do all you can afford to screen in good employees.
Note: When considering the use of contractors for such things as temporary workers, contract drivers, etc., hold these organizations to the same screening standards that are in place for regular distribution center employees.
Receiving
Most distribution operations do not do a count of receipts beyond the carton level. They may, however, employ a system of rating shippers or vendors based on previous experience with accuracy or quality. Such a rating system may flag incoming shipments that require more detailed examination or sampling including down to the individual item level. If any inconsistencies are found during the inbound examination process, such as incorrect seal numbers, evidence of damage, or open cartons, a complete audit of the entire shipment is in order. Any problems suspected even if they are later found not to have resulted in a loss such as “cartons appeared to be crushed or wet” must be noted on the bill of lading. This practice helps the freight claim process if it is determined later that something is wrong with the shipment such as missing or damaged goods.
High-Value/Theft-Prone Goods
Special care is given to products within the DC that are either very high value or very desirable as items to steal. Many times the items are small and easily concealed but carry a relatively high price, sometimes beyond the means of the workforce. For these classes of goods, it is often the practice to have prior notice to their arrival so that special arrangements can be carried out to ensure that they are quickly moved from dock or receiving areas and located in secured storage. Use special security protection in areas designated for secured storage such as electronic access control, CCTV, and special security clearances for those assigned to work there. On the outbound side, “prep” the outer cartons so as not to readily identify them as high value; i.e., make them look like any other carton. Release to shipping under controlled conditions such as onto mechanized conveying systems or manually transferred directly to outbound trailers, minimizing opportunities for internal pilferage. A “best practice” noted for retail store shipments is to pack high-value items within a tamper-evident plastic bag within the carton so as to discourage in transit pilferage as well as pilferage upon arrival at a store.
If the distribution center also handles the returns of high-value products, security arrangements must be made to identify these types of items upon their arrival at the docks so that they can quickly be moved to a secure processing area of the facility. Sometimes this is accomplished via the physical size of the return package (in the case of a direct-type return from a customer). In other cases a special address or code can be used on the return label that would identify the package as one to be routed to the secured returns area. In the case of consolidated returns as they would arrive from a retail store, high-value products will be identified only within the “opener” process, at which time they could be isolated for removal to secured storage.
Shipping
As goods prepare to leave the distribution center for shipment to a customer, store, or back to the vendor, it is commonplace that sealed cartons approach the dock doors and are or have been “electronically scanned” as an outbound event. This scan is generally used to produce part of the shipping documentation, usually the manifest. In some organizations the outbound cartons are scanned numerous times as they move through various processes, including picking and packing. These “system” checkpoints are useful in tracking down inventory losses and/or substantiating freight claims later.
Just a few words about the sealing of cartons: It is helpful to use a proprietary form of sealing tape on the tops and bottoms of cartons. This tape should not be readily available to trucking firms used, nor should it be left at the stores for use in any transfers, if possible. The stores can have a different version or color for store-to-store or returns to the distribution center. Following this practice provides a better means to determine carton tampering at the destination point. Finally, outbound trucks should be inspected at the exit point of the shipping yard to ensure that the “load” is authorized and sealed as notated on the accompanying documents. Again, consider recording a portion of the identification of the exiting driver. Any discrepancies are to be reported/investigated immediately.
Security Functions
As previously mentioned, larger distribution centers should absolutely have a separate dedicated security function that reports to a corporate security/loss prevention organization at least at a dotted-line position. This department is responsible then to monitor the electronic protection systems, provide responses to changing conditions, investigate loss, and plan for emergency actions. Additionally, the local security function can perform certain risk-management–related activities such as fire protection and insurance-related inspections, tests, drills, etc. Several large retail organizations use the security personnel at the DCs to monitor alarm and environmental conditions for their stores, office facilities, and executive residences. Often this is a cost-savings/service-enhancing feature providing value-added measurement to the support nature of security and loss prevention. Certainly, the DC security and loss prevention team can play a role in both safety and inventory shrink-reduction initiatives for the organization. Many of these efforts can and do have cost-reduction metrics that can be measured against the costs of having an active security function within the distribution center function. Best advice: Don’t leave security and loss prevention to the receptionist at the distribution center!
Docks (Receiving and Shipping)
A store’s dock or docks, typically located on the back side of the building facing an alley, a remote part of a parking lot, or in a subterranean area of a shopping center, can be a vulnerable area to theft absent a given set of basic protective measures. A checklist of rules and strategies includes
1. A dock door should be open only when unloading or loading a trailer or truck.
2. If ventilation is required, especially in hot climates, the door may be up, but the opening should be enclosed with fencing locked in place.
3. Employees must never exit or enter the store through a dock door.
4. Customers must never be allowed on the dock.
5. Docks should have a “red-line zone” space of approximately 12 feet back from the edge of the dock, in which merchandise may not be staged. The zone is marked with a painted red line.
6. If a driver’s presence is required on the dock, such driver may not leave that zone.
7. If a restroom is required for drivers and it’s not possible to have an exterior door to that room, then a red-line walkway should be painted from the dock to the restroom, and drivers may not veer from that walkway.
8. If the store has a pedestrian dock entrance door, it must be locked from the exterior side at all times, and employees may not use this door except for specific duties requiring usage.
9. Dock doors should be on their own separate alarm system to allow early morning receiving while leaving the rest of the exterior of the building under alarm protection.
10. The dock’s interior and exterior area should be covered with CCTV.
11. The dock’s exterior area should be illuminated during hours of darkness.
12. Employees should be prohibited from parking near the dock doors.
13. Sales associates should be excluded from the dock, unless their presence is specifically required.
14. Temporary lockable security cages may be required for very expensive and highly desirable goods coming into the store (pending their acceptance and removal by the selling department manager).
15. Loaded trailers awaiting removal for inter-store transfer or return to the distribution center, if left over night hours, must be backed up to the dock and must be locked and sealed. For added security, a connection can be provided which ties the trailer into the facility’s alarm system. Trailers not connected to a tractor should contain “pin locks,” which are designed to prevent the coupling of a tractor to a trailer.
16. If the same dock doors are used for both receiving and shipping, the area used for each should be separated by a cyclone wire fence at least 12 feet high. This fence can be moveable, but incoming goods should always be separated from outgoing goods when they are in the vicinity of dock doors.
Retail warehouses and distribution centers are situated in more industrial settings with less activity and traffic and often are shut down at nights and weekends. Those facilities should ideally be surrounded by perimeter fencing, and the dock area should be further enclosed by another fence and gate. This area should have a guard shack and be staffed with a security officer to control incoming and outgoing tractors and trailers, including the logging in and out of each vehicle entering or leaving the facility, identifying the driver and the license number of both the cab and trailer.
The security required for the line of docks and numerous dock doors so common in this environment is similar to that listed previously.
Documentation
Of Incidents
In the late 1990s, a Los Angeles law firm produced, periodically, a publication titled “Private Security—A Legal Update.” Three of these publications dealt specifically with the issue of report writing and the documentation of security incidents. These three issues were headed: “Documenting Your Way to a Successful Verdict,” “Paper Train Your Company,” and “Write Those Wrongs!”
These publications, as can be seen from their lead articles, stressed the importance of writing complete, detailed, accurate, and understandable reports of loss prevention incidents. Additionally, they advocated the retention of such reports for at least 3 years. This firm is absolutely convinced that excellent documentation will often mean winning a civil suit before it ever gets to trial or, if tried, the difference between a favorable verdict or losing the suit and suffering a substantial financial penalty.
Good reports will contain the answers to the when, where, who, what, how, and why of an incident developed during its investigation.
An oft-quoted Golden Rule of report writing is this: “If something happened and you didn’t report on it, it didn’t happen.” That’s just another way of saying, “If something happened, it damn well better be reported.”
What are some qualities of a good report? Reports should
• Be complete, detailed, and accurate, including dates, times, etc.
• Not sacrifice understanding for brevity.
• Be written as soon after the incident as possible.
• Be factual; don’t write things which can’t be proven.
• Quote exculpatory statements as well as inculpatory ones.
• Describe all evidence, where found, who found, location found.
• Fully identify subject/suspect of report.
• Be written so a reader 2 years from now with no prior knowledge of the incident will know exactly what happened.
Two suggested references for guidance in writing reports are Report Writing for Security Personnel by Christopher A. Hertig, CPP, and Gary E. Bittner, Ph.D., published by Butterworth-Heinemann (1991), and The Process of Investigation, 2nd edition, by Charles A. Sennewald and John K. Tsukayama, published by Butterworth-Heinemann (2001).
Of Policies and Procedures
Many of the suggestions made with regard to report writing apply as well to the documentation of loss prevention procedures.
As discussed elsewhere in this book, retailers are frequently sued for what the security/loss prevention department did or didn’t do. It is not unusual for discovery or trial in civil cases to occur years after the incident prompting the litigation. It is therefore equally important that the procedures in place at the time of the incident are memorialized, as well as the actions LP personnel should and should not do. Did the company have a policy or procedure outlining the levels of force authorized? How about searches of suspects? Were the six steps in place? Did policy require a female witness whenever a female was apprehended?
How can the company’s rules and regulations under which loss prevention operated several years ago be positively established? Testimony is one way, but a written document appropriately dated is hard to challenge. Furthermore, without documentation of policies and procedures, the plaintiff can raise issues of proper training and whether the LP personnel were simply left “to run amok” without any restrictions. The issue of whether a LP manual outlining the company’s policies and procedures is a help or hindrance when the company is being sued over LP activities has been the subject of much debate within the industry. It seems fairly well settled that such manuals are discoverable. The debate over their use pits the view that if there are no company rules, then an LP agent can’t be found to have violated them against the opposing view that if there are no rules for LP to follow, the company is negligent in not having them. The authors, and most legal authorities, have reached the conclusion that “manuals are a must!”
Drug Store Loss Prevention
Introduction
Drug stores have been in existence for centuries; the first American pharmacy opened by a pharmacist was in New Orleans in 1823. In over 150 years, only the look and feel have changed. The mission remains the same. Whether it is a major chain such as Walgreen’s or CVS, a large chain of franchised independent pharmacies, or a truly neighborhood drug store, the challenges remain the same, only adjusted for scale. Pharmacies can be part of a grocery store or free standing, in a mall or strip center, even in office buildings that have mostly doctors’ offices. As in all other areas of retail, there is no cookie-cutter approach to asset protection and shrinkage.
Business Overview
In 2005 the United States had over a quarter of a million registered pharmacists. They dispensed over 3.4 billion prescriptions that generated $230.3 billion in sales. Most of us are familiar with the free-standing drug stores that are usually located at an intersection. However, they come in all shapes and sizes and are also contained in grocery stores, big box stores like Wal-Mart and Target, and in strip centers. Shrinkage challenges are associated with not only the pharmacy, but throughout the merchandise or front end of the store. While everything is under one roof, there are two distinct businesses (sometimes three including photo labs) that are operating with different types of inventory and accounting practices. For the purposes of this book, I will address the common free-standing store concept.
This book is designed to give broad overview of the loss prevention challenges and efforts within several business sectors of retail. Retail pharmacy is not exclusive when it comes to shrink and its major components of employee theft, external theft, and paperwork errors. The unique problems facing retail drug stores are associated with specialized shoplifting, robbery potential, burglary, and, of course, those confined to the pharmacy itself.
The Retail Store
Operations and Staffing
Within the walls of the common chain drug store, there are three distinct business units: general merchandise, pharmacy, and photo lab. The operational framework under which the store operates varies slightly from chain to chain, but each of those units can have its own reporting structure. The store manager reports through a district operations manager, the pharmacy reports though a district pharmacy manager, and the photo finishing department, too, can have its own district-level reporting structure. The pharmacy will always have what is called the Pharmacist in Charge (PIC), but that is a title that denotes accountability to the State Board of Pharmacy for regulatory compliancy and the inventory. The title means nothing as to supervising the overall business, hiring, training, or other duties related to supervising. Some pharmacies fill large numbers of prescriptions daily and may have a chief pharmacist or pharmacy manager who acts in a managerial capacity. In general, however, the pharmacists are quasi-managers of their department when they are on duty.
The photo department is specialized in its own right and handles a business that in some customers’ minds is every bit as critical as medication. Ruining film or losing the entire order of the only pictures of a first birthday or other event is catastrophic to the customer for personal reasons but generally also has a permanent impact on him or her remaining as your customer.
The machines that produce the finished product require maintenance, cleaning, and calibration on a regular basis. The quality of photos depends not only on technology, but on a trained eye as well. The branding of the superior quality of photos is key to all chain drug stores, and therefore it is a critical business unit.
Three departments, with three sets of supervisors and, in most cases, no single person responsible for the total operation. The only common staff would be loss prevention and human resources. This requires a great deal of collaboration both at the store and district levels. The sales makeup is split nearly evenly between pharmacy and front end. The photo department’s contribution to store sales is comparatively small, but the gross profit is nearly 70%. Everyone has a focus on sales, shrinkage, and customer service, but it takes a deft hand to bring all of that together in concert.
Drug store management is extremely challenging because this job requires a manager to wear many hats. Payroll management, again, is separated by department, and the frontend payroll is used for everything from ordering and unloading trucks to customer service and cashiering. The management candidates come from many different service industries and obtain training mostly through on-the-job training by a designated training manager. Assistant managers are generally not prepared for the amount of work that is required to run an operation; therefore, turnover can be high. Their supervisory skills are also immature, which opens the door to operational failures that can lead to shrink and internal theft.
The loss prevention facets of store operation lie squarely on the shoulders of the store management and operations. Few stores are of the size and need to have loss prevention agents regularly, and even fewer have off-duty law enforcement on hand. Chains tend to have field loss prevention staffs called by several titles, but all function to oversee loss prevention activities. Field personnel average around 12 to 20 stores depending on their geographic concentration. Their primary roles are:
• Conduct internal theft cases.
• Conduct operational fitness audits regarding shrinkage and compliancy issues.
• Work with operations regarding training and awareness.
• Review regulatory documents that deal with federal DEA requirements in the pharmacy.
The topics covered here are operations related. While they deal with shrinkage reduction, threats, security, and asset protection, they are all under the umbrella of operations. There is extreme importance in recognizing this point not only in this environment, but in all retail organizations.
Front End
The sales floor has a wide variety of merchandise from food to fingernail polish. There are many challenges faced that impact shrinkage from the sales floor. The store manager is his or her own shipping and receiving department, own business office manager, own employee trainer, and virtually his or her own security. All the critical areas in retail are reduced to be managed or accomplished by one or two people, thus leaving a lot of room for error.
Shrink can occur from virtually hundreds of places, and its cumulative effect is erosive to the stores, and ultimately the company’s, profitability. While retail in general is a sales-driven operation, focusing on shrink initiatives will yield a faster return on investment than additional sales. Most shrinkage in a drug store environment is controllable or identifiable. Battling it requires attention to detail and a great deal of organization, but not all managers possess those skills. If the store has a poor operational foundation, then attention to shrink falls to the same poor level.
Photo Labs
The one-hour photo finishing department is a high gross profit enterprise. It is nearly 100% automated, and operational problems are few. There are numerous POS systems on the market designed especially for the photo business. The most popular system is bar-code-managed so that the processed film and the register transaction relieve one another. Much like the pharmacy, it allows for an end-to-end inventory process.
By appearance, this department would seem to be fairly simple to operate and would present few problems. On the contrary, it is a very specialized business that has specialized problems.
The film and the processed photos are the proprietary property of the customer. Although processed photos can be clearly seen by the tech and even the public to some degree, there is an expectation of privacy by the customer. This becomes a serious issue when additional copies of the prints are made by employees and then stolen.
For the most part, duplicates are made of events like concerts, car shows, etc., and are stolen because of their uniqueness. Surprisingly, people bring in film that contains nudity or other private subject matter, and those photos become the target of theft. The creation of personal photo albums of stolen photos is not unusual. Photos from insurance investigators, law enforcement, or other such activities are also highly vulnerable to theft. Photos that go beyond nudity and are of sexual conduct are shredded, and the negatives are given to the customer. Photos that portray criminal acts such as child abuse or drugs are referred to the local police. Imagine giving the police a photo taken of three smiling people sitting behind a table with three large bags of marijuana in front of them.
Internal theft of processed photos is rampant. Photographs at parties, graduations, proms, homecoming events, etc., have not changed with the digital age. Reprints, custom poster prints, as well as any other offerings are subject to theft. Another avenue of internal theft in the photo lab is from part-time professional photographers. Naturally, photographers would be interested in working in a photo lab, but photographers who take photos at weddings on the side, for instance, can boost their profit greatly by using the lab as their developer and then stealing the finished product. Lastly, photo paper itself is a marketable commodity. Stealing photo paper to sell to other independent photo labs is infrequent but does occur. As margins are squeezed by major retailers, an independent photo lab would be a good customer for black market paper.
Controlling shrinkage in a photo lab may seem daunting because there are so many ways to commit theft. The key ingredient is the paper. Labs must keep tight control on expenses to maintain their high gross margin. A typical lab may have a profit margin of 68–75%, so when a lab’s performance falls below that, measures must be taken to monitor business. If the cost of the paper used to develop photos begins to grow beyond comparable labs, then that variance needs investigation. There are other reasons beyond theft for that variance, but once those are eliminated, there is usually a theft problem. With the offering of Internet transfer of photo files for printing, a new dimension has been added to the theft equation. Now collusion can originate and end anywhere across the country in seconds.
Security and Asset Protection
Shoplifting
Shoplifting takes a heavy toll in a drug store. While drug stores do not carry high-end merchandise, they do carry merchandise that has high street value and high resale value for entities such as flea markets. What was once considered unsophisticated and infrequent has been raised to a new level of interest to both state and federal law enforcement. The growing trend of organized shoplifting has brought together the resources of both law enforcement and retailers.
Drug stores are particularly susceptible to shoplifting of any kind. The height and layout of store fixtures, minimal staff, and register placement make the drug store an excellent location for shoplifting. Merchandise security is an extreme challenge in that the self-service nature of the business requires that a customer have ample access to select merchandise. In 2005, the Food Marketing Institute produced a list of the top 50 items stolen by shoplifters involved in organized retail crime (ORC); the top ten of which are shown in Table D-1. FMI is an organization serving the needs of food distribution and related business, including grocery wholesalers and retail supermarkets. These same items are in all drug stores.
Table D-1 Top Ten Items Stolen in Drug Stores in 2005
ORC: Organized Retail Crime
The items listed in Table D-1 may seem to be an odd assortment of merchandise targeted for theft; however, for those involved in ORC, it is not. “It is estimated that the retail industry loses between $15 to $30 billion annually to such theft,” according to University of Florida criminologist Richard Hollinger, Ph.D., who has directed the National Retail Security Survey for the past 16 years. He reports “The average loss per ORC incident is now more than $46,000.”
ORC has been plaguing retail for many years, but now these operations have become highly sophisticated and even selective of the items they want. This operation is widely diversified through cells that work in concert to fill “orders” from a “repack” warehouse. Merchandise delivered to the warehouse is inspected and then repacked into an original cardboard box that was pulled from a dumpster. This merchandise is either sold overseas or redistributed to other retailers. The shoplifters involved in this level of shoplifting are bold and often take every item from the shelf. This type of activity has caused manufacturers to design shelf and peg displays that prevent easy removal of multiple items in one movement.
Shoplifting apprehension and detection are primarily the functions of store management. In drug stores, store detectives and loss prevention agents are relatively few compared to other retail sectors, but they have proven effective even in the small store setting. The primary detection and apprehension method is through electronic article surveillance.
EAS is an important strategic partner in combating external theft. Source tagging by product manufacturers has eliminated much of the store-side labor costs associated with tagging goods. Manufacturers have come to embrace the technology because it increases their sales. Their trade-off by absorbing costs associated with tagging at the manufacturing level has paid huge dividends. R&D has increased to develop better tags in both pick rate (detection) and form factor. Until a common tag format (magnetic versus radio frequency, or RF) is agreed upon across the industry, there will continue to be debate as to which is more effective. EAS also has an impact for deterrent against shoplifting. The tags that are built into the packages are not accessible to be removed by potential thieves.
Theft by Older Customers
The primary business of the business sector is obviously to dispense prescriptions. In many cases the demographics are such that the predominant customer is elderly. In areas of the country where there are large retirement populations, this is especially true. Theft by these adults needs due consideration from a policy standpoint so as not to unnecessarily prosecute those with diminished capacity. This is not to give a certain age group carte blanche, but it is prudent to understand that the risk of negative impact in the community is high should an incident be mishandled. This is an area where simply pursuing civil recovery, if available, is probably the path of least resistance. Having a policy of 100% prosecution in this circumstance can be very counterproductive and produce a negative community perception.
Vendor Theft
Vendors, those companies that provide direct delivery, commonly referred to as direct store delivery (DSD), present a unique variable to shrink. Vendor theft is best described as theft by the delivery person of their own goods. The other aspect is theft of goods from stock rooms or other areas where they deliver to.
Vendors for soft drinks, beer, wine, chips, greeting cards, etc., generally employ the same person for that route day in and day out. There are also delivery people from outside vendors who deliver special-order drugs. Because of their familiarity with people in the store, they form a relationship. This could be simply their personality and is part of excellent customer service. Some, however, have intent beyond customer service to lower the defensive guard of those persons who are responsible for checking in the delivered merchandise.
Checking the invoice of vendors against what they bring in seems to be a simple concept. They count it out; you check it off the invoice. Stop! The cardinal rule of vendor check-in was just broken. The vendor should never just call out the merchandise. The person receiving the goods should put his or her hands on the goods and confirm it to the paperwork. Dishonest vendors will count bags in multiples and easily confuse someone who is not paying attention. This will happen most frequently when a vendor is being checked in by new management. Another seemingly innocent practice that is perceived as great customer service is for vendors to service their products and then bring the invoice to be signed. There is no way to confirm what was actually done.
Why would a vendor steal five bags of chips from a store’s order? The answers are many but primarily so he or she can sell that product privately to another retailer. Poor check-in procedures are funding the vendor’s black market operation and contributing to the store’s shrink.
Robbery
Threat level for robbery is high primarily because the registers are right at the door. The threat potential grows in late hours and 24-hour stores. The primary time of the highest vulnerability is at the time the manager arrives at the store in the morning and as employees are leaving at night. When management arrives, it is usually well before the store opens, and in most cases, managers are by themselves. The cash from the previous night’s sales is in the safe and, depending on the whether there is armored car service, the money may be out of the safe for deposit preparation. At the close of business, it is always a good practice for all employees to leave as a group. This reduces the chance for a robbery due to the number of people that need to be controlled.
Armed robberies or strong-armed robberies that take place at a register or in the office can be very fast and, at times, very violent. The cash loss is minimal, but the psychological damage to the victim or victims will be considerable. After the police investigation, the victims should be allowed to go home with pay for the remainder of their shift. Consideration should also be given to additional compensated time off, as well as the offering of psychological counseling. The victim can also be subsequently moved to another store if needed. Homicides during robberies are rare in the chain drug sector but do occur. The most volatile situations are robberies of the pharmacy for narcotics. The suspect is already in an altered state of mind and is extremely dangerous. Both types of robberies require the training of all management personnel to understand and follow the proper response.
Some stores or chains do not used armored car services. This is a difficult decision to make; if such a service is not used, bank deposits become extremely dangerous. Managers must take to the bank the deposits not handled by armored cars. This presents an extreme risk of robbery, injury, or death of an employee and exposes large sums of money to internal theft. This is especially true if a night drop at the bank is used. The use of armored car services should be considered for all stores regardless of volume, as a measure to protect the safety of employees.
Alarms and CCTV play an important role in the event of a robbery. While robbery alarms and panic buttons are widely used in a number of areas, consideration must be given to the possibility of creating a hostage situation if the police arrive quickly. It is always best to allow the suspect to leave before any action is taken to notify police. CCTV is extremely helpful in resolving these cases if the equipment is kept in good repair. With the increasing use of digital recording, it important to remember that the suspect can no longer simply remove a tape from the machine. Instead, he or she will want to take the entire DVR. An effective countermeasure is to maintain a hidden backup DVR that continuously records.
Internal Theft
Drug stores are no different from any other retail organization when it comes to internal theft. The wide range of merchandise presents a lot of appeal to employees, and the opportunity to commit theft is abundant. Items such as cigarettes and beer, for which the sale is governed by age requirements, are typical targets of younger employees. The host of other items could be considered “everyday” merchandise, which has even broader appeal.
The methods employed to commit theft are generally not sophisticated, as the passing merchandise is commonly used. What is unique to this industry is the embedded theft cases in which several employees, including management, are stealing. This problem ranges outward from the store to include friends and family and thus becomes a viral effect. Investigators quickly learn that asking the simple question “Who else is involved?” expands the investigation exponentially. What is most interesting about these cases is that the employees are not working in concert with each other, but rather are simply taking advantage of the known environment. Store management can unwittingly be taken advantage of simply by their work habits. Common examples of this are that they stay in the office, leave the store during their shift, or simply do not have the confrontational skills to effectively deter the activity.
Embedded cases are difficult to detect because they grow slowly over time. The case of individual theft that involves cash register manipulation is much easier to initiate based on exception reports or other factors on the store’s profit and loss. The law of averages and comparability are the two factors that drive exception report usage. The drug store is no different, but the difficulty lies in the number of employees that are being reviewed by the software daily. Across the enterprise, tens of thousands of employees have register access, and hundreds of thousands of transactions are rung daily. The amount of data is overwhelming. Those employees who begin to surface on reports are migrating through this myriad of data and should be considered high threat. Unfortunately, this also means that a great deal of theft will be under the radar simply because investigations are working on the worst cases. The training and awareness programs that are implemented in the stores must be powerful enough to deter those employees who are on the fence about stealing.
Deterrent Measures Awareness
The dedicated thief will not be deterred by any means, so, as with any program, the target audience is that group who are opportunists if the circumstances are right and for whom the fear of apprehension is low. That combination must be leveraged to maintain a healthy attitude against theft.
Drug stores have very few people on duty at a given time, so the opportunity to have a storewide meeting, as is common in department stores, is not very effective. At the time the store opens, there may be only four employees in the building. Store management must find alternative methods to combat theft through training and awareness that can be delivered on a wider scale. Here are some simple suggestions that can be quite effective:
• Bag checks: This has to be part of company policy and must have strict interpretation as to what it means. Failure to allow a member of management the ability to check a purse, briefcase, backpack, or purchase should be considered a terminable violation of company policy.
• CCTV: If the store has CCTV, especially over the registers, employees should be made aware of that fact when first hired. Explain its usage and the fact that video of transactions is frequently reviewed for customer service and training purposes.
• Break room posters: Posters may seem to be ineffective but only because there is no way to measure their effect on an individual employee. They are effective, however, because, just like any advertising, they sell by being repeatedly seen. Using one poster all year is ineffective. Posters and like signage should be changed at least quarterly. The store’s shrink percent and dollar amount should be part of that process as well. The percent means little to an hourly associate, so the dollars are the important factor. The loss amount must be reduced to a daily average amount so that the figure can be grasped by all employees.
• Employee hot line: This call line allows employees to provide tips to the company anonymously. There is debate as to whether rewards for fruitful information are appropriate, so this issue should be thoroughly discussed with the corporate legal department.
These are not new initiatives and, in fact, little has changed in this regard for 20 or more years. It is important, however, that every opportunity be taken to find ways to get the message to all employees in some form. Management must be accountable for ensuring their personal habits reinforce this effort.
Closing
The chain drug environment requires the ability to see potential problems in a single store and project their potential across thousands. While the challenges are the same as in any retail sector, the multiple-store environment, coupled with the specialized knowledge needed for the pharmacy, makes loss prevention a challenge even for the best practitioner.
Drug stores will continue to grow in revenue as the baby boomers age and their need for prescription medication rises. Online sales have grown, but personal interaction with the pharmacist is still as special as it was a century ago. This customer-centric business requires a near flawless operation to stay in compliance with state and federal laws and to protect the health of patients. Loss prevention in this setting plays an important role in assisting to maintain a high standard, which ultimately assists in shrink reduction.
For more information about the retail drug industry, refer to the following resources:
| National Association of Chain Drug Stores (NACDS) | www.nacds.org |
| National Association of Drug Diversion Investigators (NADDI) | www.naddi.org |
| Pharmacists Recovery Network (PRN) | www.usaprn.org |
| DEA Drug Diversion Division | www.deadiversion.usdoj.gov |
| Drug Store News | www.drugstorenews.com |
| Chain Drug Review | www.chaindrugreview.com |
Drug Testing
Background
In 1986 President Reagan issued Executive Order 12564, which required the head of each executive agency of the federal government to establish a program to test for the illegal use of drugs by employees in sensitive positions. The order reached into the private sector in a very large way because the order incorporated jobs held by employees in companies regulated by the executive agencies. Passage in 1988 of the Drug-Free Workplace Act gave the order greater impetus by adding certain federal contractors and all recipients of federal grants.
Encouraged by the order, private sector organizations of many stripes began their own drug testing programs, and after two decades of challenges in the courts, the practice survived largely intact. Today, a majority of companies that perform safety-sensitive work routinely test for drugs, plus companies in other industries that have their own reasons for testing certain employees in jobs involving money handling, sensitive information, and contact with persons in their homes. Trust and responsibility are now companions with safety in the rationale for drug testing.
The federal program, the model for nearly all programs, has five elements: policy, supervisory training, employee education, employee assistance, and drug testing that is controlled and carefully monitored.
Policy
A policy explains in writing why drug testing is necessary. In the retail sector, the reasons can be prevention of loss, such as by internal theft, prevention of accidents that jeopardize the safety of employees and customers, employee health and welfare, and the public’s perception of the company.
A policy defines terms that can be interpreted in more than one way. For example, the terms “drug abuse” and “illegal drugs” can have different meanings depending on context and who is making the interpretation.
A policy describes prohibited drug-related behaviors such as being at work under the influence of an illegal drug or using, possessing, distributing, or selling illegal drugs in the workplace or at any other location while doing the company’s business.
Consequences that can result from policy violations are explained. The nature of a violation determines the nature of the consequence. Possessing an illegal drug at work is far less serious than selling drugs. The first may result in a disciplinary action; the second is termination with facts of the matter going to law enforcement.
A policy includes appeal procedures and, depending on the wishes of the employer, can include amnesty provisions and treatment benefits.
Of greatest importance is the nature of the testing program. Persons subject to the policy have a right to know the circumstances that trigger testing, test specimens that are collected, manner of collection, testing methodologies, procedures for challenging test results, consequences for refusing to be tested, and consequences of failing to pass a test.
Supervisory Training
Although most of the efforts in administering a program occur in pre-employment testing, supervisors play an important role in detecting and taking action when they observe on-the-job policy violations. It should come as no surprise that persons seeking employment with a company that tests job applicants will abstain from drug use long enough to pass the pre-employment test. Supervisors are a second line of defense.
Supervisory training includes recognition of drugs and drug paraphernalia, behavior that indicates intoxication, intervention actions, and documentation. Intervention tactics are looking for the remnants of abuse such as an abandoned brown paper bag crumpled in such a way that suggests glue sniffing, a discarded syringe, or the tell-tale odor of burned marijuana.
Supervisors who see symptoms of drug use, such as slurred speech, staggering, and euphoria, are obligated to intervene. When symptoms, and perhaps other factors, lead a supervisor to reasonably believe that an employee is under the influence, the policy might require a test for drugs and alcohol. (Alcohol is not illegal, but possession or use of it in the workplace is a policy violation.) For reasonable belief to exist, the symptoms must be explainable and provable; specific, contemporaneous, and tangible; and be associated with probable drug use. To validate a supervisor’s reasonable belief, a Two-Supervisor Rule can be the answer. This rule calls for two supervisors who have knowledge of the facts to jointly make the determination to refer the employee for testing.
Employee Education
The entire workforce is educated as to why drug testing is necessary, the problems it addresses, and the responsibility of each employee to support the drug-free program. A program can be superbly conceived and fully funded, but without the willingness of employees to accept and cooperate, the program will not succeed.
The means for employee education are numerous; for example, classroom, town hall meeting, departmental meeting, bulletin board, email messaging, tutoring, mentoring, and counseling.
Employee Assistance
Treatment benefits can range from nothing or small to the maximum allowable by the company’s medical insurance program. A small employee assistance program may consist only of a referral service to a local treatment provider, while a full-blown program will pay rehabilitation and medication costs.
Drug Testing
Testing seeks to identify in a person’s body the evidence of illegal drug use. The most common method of testing is the analysis of urine. The person to be tested is asked, not compelled, to provide a urine specimen. Written consent is absolutely essential.
The specimen is collected in a manner that guards against cheating and error. The integrity of the specimen has to be unquestionably reliable. Any indication of switching, contamination, or mislabeling will invalidate test results. A chain of custody form is initiated by the collector, and as the specimen moves from person to person, entries are made on the form that document access to the specimen and why.
Quality assurance protocols at the laboratory include calibrating equipment and minimizing human errors. Calibration and performance of equipment can be verified by insertion of “blind” specimens that contain specific drugs. If the test results of a blind specimen do not agree with what is known about the specimen, the equipment is not working properly. Errors of this type are rare. In fact, errors of any type are rare, and nearly all test result errors are attributable to human failure.
The most common testing methodology is urinalysis. Urine testing follows a two-step process consisting of an initial screen and a second test to confirm a positive finding. If the screen fails to detect a drug, that specimen is not tested further; if the screen shows that the specimen contains a drug, the specimen is examined by a more precise test. The second test is called a confirmation test, and the methodology is usually gas chromatography (GC) or gas chromatography/mass spectrometry (GC/MS). These tests are highly accurate. Because the testing process utilizes two tests that operate by different principles, the margin of error is greatly reduced.
The ability of a screening test to detect low levels of drugs has an inherent limit called the “sensitivity” limit or “cutoff” level. A specimen with a positive finding below the limit is declared negative. The cutoff is set well above true sensitivity, which decreases the possibility of a positive result caused by an outside influence such as ingestion of poppy seeds or passive inhalation of marijuana smoke.
A urine specimen that shows positive for marijuana signifies that the tested person ingested marijuana or a marijuana derivative within the past hour and for as long as 3 weeks depending on frequency of use and strength of the drug. Time of previous drug use, whether for marijuana or other drugs, is immaterial when the employer’s only interest is to determine if the tested person’s body contained a drug at the time the specimen was collected.
The Role of Security
Security professionals perform four functions in support of a drug-free program: investigating, preventing, educating, and monitoring the collection of specimens.
Offenses that violate policy or law are investigated. Discipline administered for a policy violation is founded on facts, and the fact-gatherers are security investigators. In a violation of law, security investigators interview witnesses, interrogate suspects, and collect evidence. Statements and evidence obtained are turned over to law enforcement. A serious offense, such as trafficking in drugs, can cause an offender to be sent to prison. The magnitude of consequence places a demand on security investigators to be thorough and fair.
Prevention takes two forms: examination of materials entering and moving within the premises. For example, security officers inspect packages at employee entrances, monitor cargo being offloaded at delivery docks, and patrol remote and secluded areas where drugs are likely to be used; security investigators train mailroom employees in how to identify suspicious packages and teach employees how to spot and report coworkers committing drug-related violations.
Prevention is inherent to the company’s loss prevention program. It is well understood that drug abusers steal to support their habits or simply steal because the same value system that rationalizes drug use can rationalize theft.
A company’s security professionals are ideal for teaching the workforce the criminal aspects of drug-related conduct and for acquiring teaching support from outside agencies such as the Drug Enforcement Administration and the FBI.
Collection of specimens has civil liability implications. Discrimination, sexual harassment, and wrongful termination are matters in the investigative purview of the corporate security department. In that purview also are allegations that specimens were collected in ways that eliminated job applicants from hiring consideration or that caused employees to be disciplined or terminated.
Conclusion
Image, reputation, and customer goodwill are damaged by perceptions that a company has an abuse problem. A company that sells across the counter has to be seriously concerned about what consumers think about the company. A grocery chain or a restaurant chain can be significantly damaged by any suggestion that drug-afflicted employees are contaminating food, and the same holds true when the users of temporary help believe that temps are drug abusers. An airline company will inevitably experience a drop in ticket sales following news reports that one of its pilots showed up for work while under the influence.
No workplace is immune. A company that turns a blind eye to drug abuse in the workplace is one step away from a drug-related loss. A company that believes “it can’t happen here” is exactly the type of company that drug abusers flock to when looking for employment.
Drugs in the Workplace
It is no longer uncommon to find evidence of workplace drug use. While there are many illegal drugs in use today, the more common ones found in the workplace are listed here. It is suggested that, because violence is often associated with the illegal use of drugs, any suspicions be confidentially reported to the local police and they conduct any required investigation.
This a summary of drugs commonly found in the workplace.
Visual Description: A dried, green leafy substance mixed with stems and possibly seeds.
Street names: Dope, Pot, Weed, Grass, Smoke, and Mota (Spanish) Methods of use: Smoked
Amphetamine/Methamphetamine (Stimulant)
Visual Description: Capsules, crystal, pills, double-scored tablets, white or beige powder, solid white crystalline rock
Street Names: Speed, ICE, Crank, Crystal, and Meth
Methods of use: Injected, inhaled, smoked
Visual Description: Square, perforated, impregnated blotter paper, often with cartoon characters on them
Street Names: Acid, Blotter, Sheets, and Window Pane
Heroin: (Black Tar and Mexican Brown)
Visual Description: Black tar-like substance with a vinegar odor; powder that varies in color from white to dark brown
Street Names: Horse, Smack, Stuff, H, and Carga (Spanish)
Methods of use: Ingested, injected, inhaled, and smoked
Visual Description: Brown crystalline powder
Street Names: Adam, Hug, XTC, Beans, Love Drug
It is noted that the common symptoms of the use of the preceding drugs are elevated pulse and blood pressure.
It must be noted that street drugs are dynamic, and LP practitioners should be alert or sensitive to the appearance of some new exotic drug introduced into our society and also into the workplace.