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Reducing shrinkage through intelligent surveillance

Creams, perfumes and other personal care products are items that most of us regularly pay for. However, some people prefer not to pay, which is why retail chain Matas has installed integrated video surveillance in many of their stores. Now it is easy to quickly compare cash register transactions with recorded video evidence. Matas staff feel safe and would actually like to have more monitoring.

In Matas, which has 2500 employees, more than 25 million transactions per year, and an annual revenue of approximately 4 billion Danish crowns, shrinkage is a problem which costs both human resources and a lot of money on the bottom line. For Matas management, shrinkage control is a high priority, so it was decided back in 2010 to intensify the fight against it. One of the ways to do this was to install advanced IP video surveillance, initially in 65 of the chain’s 258 stores.

Matas already has video surveillance in many of their stores, but it consists of many different systems that are difficult to support when they fail, and it is difficult to train new employees on the systems. In addition, transactions at the cash register are not directly connected with the video recordings, which makes it time consuming to find suspicious incidents at checkout. Now these problems are solved in the stores where Matas has installed Milestone.

“When we had to identify shrinkage and procedural errors and clarify doubts about payments or giving change, we would sit and manually compare the video evidence with point-of-sale (POS) events from the cash register, because the systems were not integrated. It was costly and also meant that we had to make random guesses about possible false transaction events at each cash register,” says Marianne Gernyx Sejbak, security manager at Matas.

Cash register and video in sync

Matas therefore decided to implement new advanced video surveillance equipment in 65 of their large stores, which could correlate transactions from cash registers with video monitoring. By doing so, video surveillance became centralised so that all management and administration could be undertaken from the Matas headquarters – each store manager could thus leave the investigative work to central management and instead spend his/her time on the daily management of the store. The store manager does have access to video evidence, however, so it can be used in connection with shoplifting or payment disputes, for example.

The video surveillance solution consists of XProtect Corporate and XProtect Retail software from Milestone Systems and was implemented by EG Retail & Media, which is Scandinavia’s largest supplier of IT solutions to retailers and media houses. It includes video surveillance of the stores, which is correlated with an analysis of all cash transactions. The POS system generates documentation for all transactions, which is associated with video evidence and simultaneously displayed on the screen via the Milestone software.

“Because the systems are now synchronised, we are automatically alerted by the monitoring system when something seems abnormal at the cash register,” says Helle Bakkendorf, shop controller and daily user of the system. “Cash registers might have been opened without any purchase taking place, or there might be cancelled transactions where the customer pays in cash but the money is not in the cash register, suspicious transactions after closing, return sales on an exact amount, and so on. We can also search a given period, actual amounts that were paid in cash, by credit card or gift certificate, or on specific brands and see the corresponding video recording immediately if we suspect anything.

“This way we can target our investigative work much better than before,” says Bakkendorf. In the future, Matas would also be able to trace a specific item back to the actual date of purchase, so that it could soon be discovered if an employee or customer tries to return or exchange an item that has not been purchased.

Popular with employees

Initially, monitoring was greeted with skepticism by some employees in the selected stores. “Do you not trust us?” was the recurring question. But scepticism was quickly replaced by relief when employees experienced the benefits of video surveillance and realised that the system had not been acquired to make them the targets of suspicion.

“We obviously want maximum job satisfaction and well-being for our good, loyal employees and fortunately we have many of them,” says Marianne Gernyx Sejbak. “Video surveillance is largely also implemented to provide security and safety for our employees – both in connection with theft and assault, questions surrounding internal shrinkage, as well as with customer disputes. Did the customer get the DKK 500 back? There is no more doubt, because we can immediately get the dispute resolved by seeing the evidence on screen.”

This saves all the loyal Matas employees from possible suspicion of internal shrinkage, and if it does occur, cases are now resolved much faster. Matas can now avoid such cases from dragging on over extended periods and generating a bad work environment. Video surveillance has actually become so popular that the staff of the chain’s other stores are starting to demand it.

The video solution also contains People Counting, which tallies the number of customers in a store. Each store can then compare this with the number of sales and thus adjust work schedules and ensure proper staffing. The entire solution thereby works as both an analytical and management tool.

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