REDUCING THE LOSSES WITH TRAINING

Drive offs and Vendor Fraud

Two very key areas that C-Store and Service Station retailers experience losses in are forecourt drive offs and fraudulent activity and losses from delivery drivers.

In both cases the loss of dollars can be substantial to the business.

If drive offs continue unchecked - the fuel margin lost is of grave concern to operators. If you have a drive off of $60, how many extra litres of fuel do you need to sell during the rest of the day to recover this loss? Let's do the math - if your fuel margin of the day is 3 cents per litre, then you will need to sell at least an "extra" 2000 litres of product to recover the loss. In other words $60.00 divided by $ 00.03.

If the average vehicles fill up is 40 litres - that means an extra 50 cars for the day need to visit your forecourt.

Drive offs are an emotional issue for many retailers, and the processes of training, coaching and reviewing staff performance in reducing the potential for drive offs is important. Staff need to be informed about the procedures during their induction training and then reminded with workplace coaching and feedback at regular intervals. We all train our people in being vigilant when authorising pumps for customers, and writing down rego numbers of suspect vehicles and customers, etc however eventually if we don't revisit the issues often, staff enthusiasm for attentiveness wanes over time.

Operators should take time with their staff to carefully explain "why" they must be ever vigilant for the potential drive off. Too many operators tend to blame their staff for allowing it to happen. Remember, sometimes visibility is a problem and other times, the forecourt and shop is just plain busy. Keeping the emotion out of drive off discussions with staff is a difficult thing for some business operators to do. Staff will respond to ongoing coaching and support more than the threat of discipline.

The other area of loss - the short delivery of products by vendors also causes business loss or shrinkage in retail terms. Due to the nature of C-Store operations, it can be difficult to always be there or find time to check in vendors delivering product. Some dishonest drivers and vendors take advantage of this situation. If they are not regularly checked into the store - they will begin to defraud the business. Traditionally, deliveries such as milk, bread, ice etc may not be checked in every day, due to time of delivery and so on. If store operators don't train their staff to conduct frequent delivery checks, then they will have short deliveries, incorrect size and weight and too many short date products.

Consider this - if your milk delivery for the day was short 3 x 2 litre white milk at a retail price of $3.40, how does this affect the store Gross Profit?

All shrinkage is calculated at retail - not cost price, because in effect you have lost the opportunity profit you were expecting to make as well as the actual cost of the milk. 3 bottles short has cost us $10.20 shrink.

If we make a 25% margin this means the margin on a 2 litre bottle is 0.85 cents. How many extra bottles of 2 litre milk do we need to sell to recover the loss of $10.20?

$10.20 divided by 0.85 cents equals 12 bottles. Twelve extra milk customers need to visit the store today to recover the loss in short delivered milk.

Once again you can see why it is critical that induction and review training processes include instruction and practice on when, how and why staff should check delivery drivers into the store when they deliver their products.

These are just two areas of potential loss and shrink in the C-Store industry these days. atmp deliver Retail Loss Control programs focusing on procedures to minimise these and other losses that eat away at your bottom line.



 

Previous Articles