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Case Study: Compliance Shops


Protecting and improving...

JKS helps nation's largest convenience store chain avoid pitfalls of beer, cigarette sales

A six pack of beer flops to the counter and the sales clerk hesitates at the site of a young customer on the other side of the register. "He looks over 25, but maybe it's just the goatee," the clerk thinks, and he politely asks for identification.

The consequences of whether to "card or not to card" for beer and cigarettes is a challenge clerks and store owners face daily, but JKS is at least making the process for decisions easier.

"We help stores by developing a process for who should be checked for alcohol and cigarette sales and how those checks should be made," said Jayne Keedy, president of JKS Inc. "Then our spot checks, mystery shops as we call them, help ensure that employees are following the process."

If an underage drinker is hurt or killed in an accident or injures someone else, the store that sold the alcohol to them can be liable for damages.

For instance, in a typical alcohol shop, JKS sends out a mystery shopper--someone over age 21 but under age 25--to buy beer. (Many companies have policies requiring employees to card anyone who looks under age 27.) The shopper then fills out a detailed report about their experience and whether they were asked for identification. Keedy said her company's efforts have been so successful that JKS Inc. just landed a contract to shop hundreds of new stores in the East Coast region.

"Companies have put a lot of trust in us, because compliance with alcohol and tobacco laws is a big issue right now, and the government and law enforcement agencies are watching stores closely," Keedy said. She said that even though the compliance work is viewed by some employees as "spying," it actually can work in their favor. "Let's face it, would you rather be aware that someone is watching and at least get a chance to undergo more training if you slip up and forget to card someone, or would you rather face possible criminal penalties or termination after the local or state law enforcement busts you out of the blue?" Employees that don't follow procedures can always be helped with additional training, she added.

Liability is another major problem. If an underage drinker is hurt or killed in an accident or injures someone else, the store that sold the alcohol to them can be liable for damages. The average claim for lawsuits settled over the mark of $350,000 is a whopping $668,000, according to data from Federated Insurance Companies. Even smaller settlements in the $10,000 range can incur costs as high as $13,000 or more. Add to that the cost of higher insurance rates and the damage of bad publicity, and it's easy to see why training and monitoring is so important.

The data derived from a compliance shopping program not only helps prevent problems, but also provides an advantage in court when it can be shown that the company is self-policing through the use of an unbiased firm like JKS.

Stores get an added benefit from the compliance shop service. In addition to mystery shopping for compliance, JKS Inc. also provides detailed reports to store owners and company officials on customer service, product placement, atmosphere, cleanliness and other quality control needs. "Stores are evaluating themselves continually with our shops," Keedy said. "The end result is business that improves its sales and protects itself."

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