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Loss Prevention

Eyes Wide Open

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Knowledge is power, but that’s hardly a consolation for Quik-E Foods, a chain of convenience stores based in Lynchburg, Va. Last year a cashier was discovered to have been stealing; the cashier was putting a hold on cash transactions, then hitting the “no sale” key, voiding the transaction and pocketing the cash once the customer walked away.

The cashier stole at least $6,000 last year, vice president and CTO Todd Burgess estimates, before a manager became suspicious of discrepancies between inventory and receipts and confronted the cashier. With cigarettes selling for between $50 and $60 a carton, Burgess says, “We were losing money very quickly, but we weren’t discovering that very quickly.”

Remote access

Quik-E Foods was founded by Burgess’s father Wilton in 1973 and is still operated by the elder Burgess and his three sons. They currently have 12 stores averaging 2,700 square feet; five have automated car washes and six have delis. The company has been using video surveillance systems from March Networks for 10 years; a minimum of eight analog video surveillance cameras are installed at each location, typically positioned to survey point-of-sale stations, entry points, gas pumps, store aisles and back rooms.

A recent upgrade to March Networks’ Searchlight video surveillance software is giving Quik-E Foods the ability to quickly detect losses from internal theft. The web-based exception reporting tool is synchronized to store-level video surveillance cameras and POS systems. The retailer is also upgrading to March’s 8000 Series Hybrid Network Video Recorders and Enterprise Management Server with video management software running on the recorders’ scalable Linux operating system.

Burgess says that while Quik-E Foods has text overlay data search capability through its POS and video systems, Searchlight put it all in one spot. “I can’t tell you how awesome it will be to have all the journals and videos of all my stores accessible from my corporate office. I won’t have to ride to a store to do a search through a journal.”

In the case of cashier theft, the transactions show up as voids in Quik-E Foods’ system; Burgess can use an e-mailed report from Searchlight to get a list of voids by store. “There won’t be a need to search for hours and hours,” he says. “It’s instant.”

Quik-E Foods is also using March Networks’ mobile video service, which allows Burgess and other managers who might be working remotely to log on to the video surveillance system using smartphones or tablets to view exception reports and see and hear related surveillance records.

“The mobile solution will allow the IT team to review video for all convenience store and car wash locations, no matter what generation of technology, analog or digital, captured the data,” says Ali Mahmoud, March Networks product manager.

Exception reports can be tailored to store, regional and district managers as well as corporate management; customized reports can also be created. Reports can be printed and e-mailed, along with related videos, to colleagues or to the police if an investigation is underway.

Mahmoud says that a retailer’s shrink typically averages between 2 and 4 percent of sales. Searchlight, he says, can cut that in half. In addition, some retailers have seen sales increase as much as 20 percent a year after taking advantage of Searchlight’s loss prevention and operations auditing capabilities.

Alert capability

Upgrading the systems gives Burgess the ability to have up to 16 cameras at each location. He is gradually adding Internet-linked cameras on an “as-needed basis and as they become more affordable [and] as we are able to put the horsepower behind them with bandwidth.”

One outdoor camera installed at a car wash location delivers images so clear that Burgess “can literally read the license plate of a car inside the car wash.”

That’s an invaluable feature, he says, since some drivers put their cars in gear inside the car wash and drive it into the expensive automated “arm” that cleans the cars. That can damage the arm and/or the car; by having a camera, Quik-E Foods can either recoup damages or avoid being sued for damages to the car by showing that the driver caused the damage. That has happened,” Burgess says, “but we had the video to show it was not our fault.”

The older March Networks system, which integrated with the point of sale system, allowed Burgess to see “an overlay of what’s being rung up at the POS. I can log in to a POS camera and watch a journal of cash register receipts scroll down the side of my video. That journal goes back to cover an entire year of just text data from each POS.”

The older-generation system, however, couldn’t generate alerts to send to management when a POS exception like a void or a sale temporarily put on hold occurred. Searchlight will give Quik-E Foods that capability. The retailer will also be able to use Searchlight’s automated operations reports to monitor critical activities at the stores, such as whether stores opened on time, shelves were stocked properly and employees were dressed as required.

Journal data is streamed from the network video recorders to Burgess’s corporate office where it is stored on a server. “In addition to being able to receive alerts when exceptions occur,” he says, “I can go into the database and create queries or alarms to alert me” when voids between set dollar amounts take place.

“When that exception happens, I will immediately get an e-mail [with] a link … to see the video associated with that transaction. I can’t wait to get my hands on that.”

Burgess adds that he does not have the time or the desire to look at videos all day. “I only want to look at videos when something becomes a problem,” he says. “And I want to watch a video to catch a problem before it becomes a catastrophe, which is why I can’t wait to get my hands on Searchlight.

“That $6,000 loss we discovered last year was probably closer to $20,000 going back the three years that clerk worked for us,” Burgess says. “I just can’t go back far enough on my journals to prove that. A loss of that magnitude will never happen again with Searchlight.”