FIWs, POS Analytics, And The DVR Security System
Historically, Asset Protection has been part of our operation, but they’ve usually been in the background and normally not that involved in the daily operations of our stores. Recently, however, all of that has changed. For about a year now Asset Protection has been a very active part of store operations, and this has created some anxiety in the system. Franchisees are concerned about what’s going on with the Financial Impact Worksheets (FIWs), what’s going on with POS Analytics (Red, Yellow, and Green), and what’s going on with the new DVR security system.
The National Coalition Executive Board has held several meetings with Asset Protection in the last several months to discuss these three topics, and some progress has been made. I’d like to share where we now stand on these issues.
Presently, many stores are being hit with FIWs—or the charge-backs resulting in FIWs—which are typically triggered by audit-to-audit research, by alleged misreporting promotional activity at the stores, or by alleged mistreporting of manufacturer coupon activity. However, there’s a lack of understanding among franchisees about how these charge-backs and FIWs are calculated. Even some field consultants and market managers don’t fully understand how FIWs are calculated. One reason for this is a lack of sufficient support to explain how these packets are to be understood and how the stores can respond to them.
As a result of our meetings with Asset Protection, on 7-Connect there are now complete tutorials on audit-to-audit analysis, and how to understand the Financial Impact Worksheet. These tutorials contain information on how things are calculated, so if a store receives an FIW the franchisee has some tools to help understand it. We advise that you prepare questions and respond to the FIW, and if need be, challenge it. Don’t let it sit around for 60 days and let it impact you. We also urge everyone to look at the tutorials.
The other area of concern among franchisees is POS Analytics (Red, Yellow, and Green), where stores are flagged according to the daily transaction data. All POS activity now gets funneled through a special SysRepublic EBT reporting tool called Secure, which is updated with T-Log transactions on a daily basis. Secure monitors 16 different transaction types for exceptions based on volume, value, and percentage of sales (which are reviewed via a weekly summary report): aborts, item voids, negative transactions containing promos, transactions with tobacco discounts, transactions with non-tobacco discounts, non-scanned refunds, non-scan- ned sales, scanned refunds, manufacturer coupons, PLU lookups, age cancel verification, memory cancels, no sales, price overrides, change makers, and penny rings. Depending on where you fall on those 16 criteria, stores can be flagged Red, Yellow, or Green.
But again, there is a lot of confusion and a lack of understanding among franchisees on why a store is Red, Yellow, or Green—and especially WHY a store is Red and what can be done to fix the issue to make it Green. LONs and breaches are being given on the FIW and charge-back situations, as well as stores being Red on the POS Analytics. Any time you talk about LONs and breaches it creates a negative situation and puts franchisees on the defensive. It also takes the focus away from improving sales and gross profit.
In our meetings with SEI and Asset Protection, we said franchisees would like to have the tools at the store level to look at the same information that Asset Protection is viewing. Then stores could examine the information in detail and be proactive and fix the problems. After some discussion, we have a commitment from Asset Protection that we’ll have a weekly report available to all stores on the 16 transaction types at the beginning of next year. SEI will need some software development to accomplish this, but we should have a report available to us by the beginning of 2014.
The report will have detailed information on the store’s activity related to those 16 criteria, how that information compares to your market and zone, and it will be broken down at the cashier level so you can tell which cashiers have high volume activity on these negative transactions. This weekly report will be delivered to the stores via e-mail, and we are excited because this will allow stores to be proactive moving forward.
The third concern is the new DVR security system—specifically, the purpose of the new system and how it’s going to impact the way we do business. Currently, about 4,200 stores have the ClickIt DVR system installed, and the rest have an earlier DVR platform. SEI said it plans to upgrade over 1,000 more stores to the ClickIt DVR system by the end of this year. This system features one big fisheye lens camera in the middle of the store that provides the ability to zoom in and out without losing clarity, and it’s able to capture everything that happens in the store. It also gives SEI the ability to view our stores remotely.
The biggest concern with the ClickIt DVR system is how it’s going to be used by SEI and for what purpose. As you know, we have been in mediation with our franchisor over the use of the DVR system, particularly what information they get from our stores via the system and for what purpose the information will be used. We’re making progress and hope to have something to share soon, but the Justice Department has delayed mediation due to its investigation on the East Coast matter. We have asked SEI to come back to the table as soon as possible to resolve this issue, because it is important to franchisees.
As your national representative I understand these issues have been on the minds of franchisees for many months. We’ve voiced concerns to SEI and some progress is being made, but we hope that moving forward our franchisor will work closer with us to resolve similar issues before they become too distracting and affect our ability to grow sales and profits.