Today’s Cameras Stop POS Shrinkage as it Happens

By Nathan Needel, PRD International

For years, surveillance systems have recorded thefts and other incidences, including those at POS location, for future investigation. Now, video can be used to stop incidences as they happen. To do this, users need to quit thinking of surveillance systems as simply repositories of what’s been seen and recorded and, instead, think of cameras as sensors in a system. Why should you have to search through recordings to locate the incident when, if fact, they can stop it as it happens?

For most retail organizations, any cuts in shrinkage will typically go directly to the bottom line. That’s because, as reported by the University of Florida’s Nation Retail Security Survey, the total shrink percentage of the retail industry in the United States is 1.52%. It’s budgeted for. Thus, any lowering of that figure adds to the profit line – and retailers operate on very thin margins.

To make sure that we’re all on the same wavelink, let’s agree that the shrinkage we are discussing is only that caused by employee actions at the POS (point of sale) terminal, not in the warehouse, at the docks or elsewhere. It’s the source for major shrinkage problems and not that difficult for employees to do. There are different ways to manipulate a POS system, such as a cashier giving customers unauthorized discounts, creating fraudulent returns, manually entering lower values in the system or making a no-sale, which means that the cashier opens the cash counter without registering a sale.


Today, most retailers still have to search through their recorded video to catch an incident. As they will tell you, it can be extremely time-consuming to view video in a search to catch a clerk pilfering. Even in cases where the retailer has associated video and text for faster searches, the incident is still discovered after the fact. In these cases, using high resolution cameras, extremely sharp digital images capture the detailed faces, numbers and small objects while also capturing the text that appears on the customer’s receipt. It then associates it with the corresponding video and records all on internal hard drives.


Camera + video analytics = greatly increased loss prevention results

Here’s a very obvious example. Perhaps a retail jewelry store wants an alert whenever a certain object, such as the very expensive necklace in the front showcase, is moved.  With a simple motion detector, if the necklace is moved, the system sends an alert in any manner that the store management wishes.

The system could also detect suspicious activity for immediate follow-up such as people entering low traffic areas that could be used for tag switching, undue motion around the POS stations and out-of-hours activity around the POS stations. At the changing room, the system can automatically compare what merchandise was carried into the changing room versus what is carried out.

Theft can involve cash, credit cards, gift cards or sweethearting, when employees give free or discounted merchandise to friends or family. This is accomplished through cancellations, including "as is" items, returned items, discounted items, void/no transactions or manual entries at the register. Sweethearting has been easy to accomplish at POS terminals and particularly difficult to detect – until now.




How to create such systems
In many cases, there are already legacy cameras and video systems in place. Nobody wants to tear out their old systems to add new features. Hopefully, such a system is based upon an open system so that the new video analytics will work with the present cameras, VMS and rest of the system. Henceforth, any new equipment will certainly want an open architecture platform. (For instance, the Polaroid VMS works with 1800 different cameras from 80 different manufacturers.)

You also want a robust system for your customer as the system will use more bandwidth than the previous system. As an example, look at NVRs that will support 250 cameras per operating system at 2 megapixel. Lastly, don’t forget the warranty. You can now enjoy manufacturer warranties that extend to a decade of use.

Nathan Needel, is COO, PRD International, manufacturer of Polaroid Professional Security Solutions.

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