Phone Retailer Improves Security & Rings Up Savings

Phone Retailer Improves Security & Rings Up Savings

“We saw the clear correlation between the CAP Index Scores, our actual incidence of burglaries, and our shrink numbers.”

— -Head of Fraud and Loss Prevention at a leading phone retailer​

THE SITUATION:

A major phone retailer with over 2,000 stores had long struggled to determine expected shrink levels across its locations. By partnering with CAP Index, the retailer significantly improved its security measures and operational efficiency.

2,000+ stores nationwide | Needed to optimize security budget | Looking to expand – needed guidance for new locations

CAP Index enabled the retailer to scientifically determine expected shrink levels, allowing the company to set more accurate store goals. This objective data helped the retailer avoid unrealistic expectations and better understand the true performance of each location. “We saw the clear correlation between the CAP Index Scores, our actual incidence of burglaries, and our shrink numbers,” explained the head of fraud and loss prevention.

THE INTERVENTION: 

To help address their numerous needs, CAP collaborated with the retailer to provide actionable data to better identify risk at each store and build a security model fit the each location’s specific risk. Using CAP’s crime risk data, the company realized the following benefits:

• Accurate shrink levels for each location
• Enhanced new location scouting
• Tiered fraud prevention
• Optimized new store security
• Improved store performance

Testing CRIMECAST Reports

The retailer initially tested CAP Index’s CRIMECAST® reports by providing data on shoplifting, shrink, robbery, burglary, and fraud. CAP Index ranked the stores from lowest to highest in terms of potential crime risk, revealing the power and accuracy of the crime risk data. “What we found was that we’d been too generalized in our efforts. We have stores in the same region that are lumped together, and everyone in that region was expected to have a similar shrink number. That’s obviously not realistic or fair, but how does one determine what the proper shrink number should be?” asked the head of fraud and loss prevention.

Using CRIMECAST Data to Improve Security

The retailer purchased CAP Index Reports for each location and observed a clear correlation between CAP Index Scores, actual incidents of burglaries, and shrink numbers. This insight allowed the company to set more accurate store goals and target security resources more effectively.

“It’s great to have real science and insight behind our decision-making process.”

-Head of Fraud and Loss Prevention at leading phone retailer

THE TRANSFORMATION: 

• With CAP data, the retailer tiered its locations to deploy different levels of fraud checks. This segmentation enabled the company to apply varying strategies based on the risk level of each store, leading to more efficient and effective fraud prevention.

• In collaboration with the property team, the retailer began using CAP Index Scores when evaluating new locations. This data-driven approach enabled intelligent spending on necessary security measures, such as CCTV and reinforced doors, based on objective risk assessments.
• Given the high risk of fraud in the phone retail industry, the retailer used CAP Index data to rank stores and compare them against fraudulent contract incidents. This correlation informed the deployment of tailored fraud checks, resulting in more sales and fewer fraud incidents. Higher risk stores received additional validations, leading to a higher percentage of good sales.
• CAP Index data also allowed the retailer to model expected performance and costs for prospective stores. By understanding the CAP Score and quality of trade in different areas, the company could project shrink numbers more accurately, adding a scientific approach to store performance forecasting.

Conclusion

The analytical approach provided by CAP Index transformed the retailer’s decision-making process. With accurate data and insights, the company could justify security investments to its Board and make informed decisions that enhanced security and operational efficiency. The partnership with CAP Index proved invaluable, offering a clear return on investment and establishing a best practices framework for security resource allocation. “It’s great to have some real science and insight behind our decision-making process,” expressed the head of fraud and loss prevention.