SHOP SECURITY: BUSINESS PROTECTION

Motor,  Jul 2004  by Bell, Sam

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Consumer expectations, the litigious nature of our society and the potentially devastating cost of 'simple' mistakes are three very good reasons why your business needs protection. As this second of a two-part report explains, planning today prevents problems tomorrow.

In the first article on shop security (February 2004), I said that protecting the physical plant of the business was just the tip of the iceberg. This installment will examine some less easily seen aspects of the subject of securing your shop.

Inventory control, liability issues, business and employee insurance coverage and safety concerns are the less tangible, but by no means less important, aspects of shop security that warrant your attention.

Inventory Control

Nationwide, retailers lost nearly $1.7 billion last year due to "inventory shrinkage," a category comprised of honest mistakes, employee theft, vendor fraud and shoplifting. Nearly half of such losses were directly attributable to employee theft. Model inventory control programs vary according to shop size and needs. At the very least, all incoming invoices and deliveries should be checked for accuracy at once. Innocent mistakes are most easily corrected when they occur.

Experts in the loss-prevention field suggest that all large parts shipments be logged in by at least two people. They also point out that removing the incentive to steal (for example, by offering employees the ability to purchase parts at cost) is much cheaper in the long run.

In many smaller shops without a separate parts department, the largest category of inventory shrinkage results from the simple failure to log all parts used onto customer invoices. Some shops combat this easily by requiring that no packaging be discarded without first removing the part number portion of the box. These package flaps are then logged onto the appropriate customer invoices. Reordering for stock can also be streamlined by using the same labels. Small, easily overlooked items like fasteners and chemicals are often accounted for by a single line-item charge for shop supplies.

Liability Issues & Loss Avoidance Programs

For most people, a vehicle is their most expensive personal possession. And as we all know, a high level of complexity has made the repair environment more challenging over the years. Additionally, the consequences of a failed repair can range from the merely inconvenient to the multicasualty catastrophic. Thus, it's no surprise that our industry generates more consumer complaints than almost any other.

Let's look at three examples of possible nightmare scenarios:

* When replacing a caliper, one of your technicians leaves the bleeder screw a little loose. If your customer then rear-ends the vehicle in front of him because his front brakes failed to apply, can your shop be held liable?

* A customer comes in with an intermittent stalling complaint, and you can't duplicate the condition. You do notice, however, that the oil pressure switch is leaking heavily and the oil level in the crankcase doesn't touch the dipstick. You tell him you can't duplicate the stalling and that his engine is low on oil and has a bad leak. He tells you to just top up the oil. Three days later, his engine seizes up. Are you liable?

* A customer complains of an intermittently low brake pedal. After inspecting and bleeding the system, you're unable to duplicate the condition. You call the customer and explain the situation, remarking that the only other thing you can think of is an intermittent fault in the master cylinder. The customer asks that you replace it, and, although you agree to do so, you stress that you're not sure that will cure the problem. You complete the replacement and road-test the vehicle without incident. The next morning, while backing out of his long, curving driveway, your customer's brakes go to the floor and he backs into a parked car. A detailed examination reveals that a loose wheel bearing retracted the caliper pads when the driver backed up. Are you liable?

What Is Liability?

During my years in law school, I learned that liability is financial responsibility for the foreseeable consequences of a negligent action or inaction. Negligence, in turn, is the failure to exercise due care in the normal course of events. Motive or intention is not a factor in determining negligence.

When a repair facility is open to the general public, it is presumed by law to have sufficient expertise to perform such repairs competently and in accordance with the generally accepted standards and practices of the industry. Does this mean you can never make a mistake? No, thankfully things haven't reached that stage yet, but the expected standard of care is rising.

In general, a breach of duty underlies most lawsuits for negligence. Now lets return to our examples:

* Leaving the bleeder screw loose is a clear breach of the duty you owe your customer. Because an accident is a fore seeable consequence of the breach, your shop could be held liable for the damage to both vehicles and any in juries to their occupants.