Marijuana Business Magazine September 2019

Marijuana Business Magazine | September 2019 130 • Cash skimming: Employees steal small amounts of cash (usually less than $20) from the drawer before the money is counted, assuming it will go unnoticed. • Weighing heavy: The store allows for slight overages when weighing loose flower, but the employee weighs precisely, charges accord- ingly, and pockets the sum of what could have been the overages. • Outright theft: Stealing loose flower and attributing the loss to evaporation. • Setting permissions in the POS system: This can allow access to secure areas or the ability to give discounts. “Whenever you challenge the human psyche to get around something, it will,” Davidson said. Asked to comment, one Colorado retailer, who requested anonymity, said that although the state requires budtenders to carry an occupational license that “acts as a deterrent,” such covert theft is “a possibility” she hadn’t considered. “It’s also possible retailers won’t admit to shrinkage for fear of raising compli- ance issues with regulators,” she added. PREVENTIVE MEDICINE Experts recommend several strategies retailers can use to reduce the odds of employee theft. Both Davidson of 3 Sixty Secure Corp. and Cohen stressed the importance of adequately compensating employees, many of whom make minimum wage despite working in an environment that sees large inflows of cash. “Employees who make minimum wage may feel entitled to steal, versus those at above-market wage,” Cohen said. Cohen also recommended retailers use the following strategies to limit theft: • Conduct frequent inventory counts and audits. • Keep an eye on turnover. Employees with “short-term mentality” are the most likely to steal, Cohen said. • Use key cards or biometric locks to track access to locations where product is stored. • Scan all bar codes when merchandise is delivered and sold. Even if all items in a box have the same bar code, don’t just scan one and list it alongside the quantity in the POS system. Scanning each item limits the margin for error and catches any discrepancies between what was ordered and what actually arrived, Cohen said. • Prohibit anyone other than store owners and managers from setting access permissions in the POS system. “Owners or store managers should have permission to change pricing, create promotions and adjust inventory audits—but not other employees,” Cohen said. Finally, Cohen suggested retailers take dispensary design into consideration and allow only designated employees to process cash. Think about dispensary design in terms of creating a positive customer experience while limiting opportunity for theft, he noted. For example, “Some stores take orders via a tablet on the floor, which then sends the order to a centralized fulfillment and payment location, thereby limiting employee access to both the product and the payments,” he added. Gavin Kogan. Courtesy Photo Covert Curse Implement a Multipronged Security Program To curb the threat of employee theft, Barry Davidson, director of strategic engagement with 3 Sixty Secure Corp., a Canadian risk solutions firm, recommends what he calls a “full security program” that focuses on several strategies and the overall company culture. “A security program is not just technology,” he said. “It needs to be staff training, standard operating procedures, cash-handling procedures. A security program in a retail environment … should have a huge impact, and I hope in a positive way, on the culture within that environment.” A full security system, Davidson said, ensures that staff is sufficiently educated to feel valued and empowered to deal with whatever security issues might arise. Employees should know where panic buttons are located, for instance, and how to use them. However, while he says it’s important for employees to feel trusted, Davidson cautions against telling them how specific technology works. “I’m not going to tell them exactly (what the technology is),” he said. “I’m not even going to show them what the camera angles are, because I don’t necessarily want them to find a blind spot.” Additionally, he emphasizes that employees should be made aware of risk—not only in terms of external threats but also the difficulty of circumventing internal security systems and their own liability, should they be discovered stealing. “So, your briefing with the cashier … I would frame it this way: ‘For your safety and the safety of the business, that cash area, the cash register, the POS machine and all of this area is under constant surveillance. Each transaction is logged through the system. And we’re there to ensure that you are protected against allegations, against a robbery,’ those types of things,” he said. – Celene Adams