numbing the sting

Due to a zero-tolerance policy Terrible Herbst instituted about three years ago, George Philpott has had to witness the termination of an hourly employee that served the company for 18 years, as well as a store manager that worked there for seven years. He’s seen some good people leave in tears after violating the stringent single-strike policy. And he supports it fully.

The policy in question is by no means sadistic or unfair; it’s the result of Las Vegas-based Terrible Herbst’s efforts to become a more responsible retailer by taking greater strides to prevent agerestricted items from falling into the hands of minors. The policy states that every customer that attempts to purchase tobacco or alcoholic beverages must be carded every time—no exceptions.

Philpott, beverage category manager and convenience store operations supervisor overseeing 83 Terrible Herbst stores, admits that the policy has led to the dismissal of some good people. But, more importantly, it has made Terrible Herbst a better corporate citizen and helped shield the company from the fines that accompany failed compliance checks.

“We were asking ourselves, ‘How can we get employees to understand the importance of carding instead of beating them over the head with it?'” he recalls. “We think this approach helps employees understand how important it is to check IDs. When you lose a good employee because of a one-time action like this, it’s probably not the first time they’ve [violated the policy].”

Formation of the policy emerged from a 1998 “outreach” program by the state in an attempt to rein in unlawful sales to minors. In 1999, statewide retailer compliance for law-enforcement sting operations lingered at a dreary 48%. That meant minors purchased age-sensitive items in 52 out of 100 compliance checks, according to Diane Pidsosny, Southern Nevada Enforcing Underage Drinking Laws coordinator from the Office of Juvenile Justice and Delinquency Prevention.

After implementing initiatives to work more closely with retailers, the state’s average compliance rate improved; in 2004, retailer compliance in stings rose to 77%. Terrible Herbst, meanwhile, reported a 2004 compliance rate of 94% within its network of Nevada stores. But that’s still not good enough, according to Philpott.

“We need 100% compliance,” he says. “We have [Wayne's] Nucleus registers that let us scan an underage product and remind employees to check the birth date to see if they can authorize the sale. We’ve had some customer complaints, especially from customers who are obviously of age, but we’re doing what we think is right.”

An incentive-based strategy
When hiring new employees, Terrible Herbst discusses the importance of asking for the customer’s ID when selling any alcohol or tobacco product. The company explains that to successfully pass each sting—and, more importantly, to keep agerestricted items away from minors— associates must always ask for the customer’s ID; look at the picture and the birth date; compare the birth date to the calendar; and simply ask the customer his/her age.

Terrible Herbst also clarifies that if an associate fails a sting, he/she will receive a ticket that may include a fine of up to $1,000, and will be terminated from their job immediately. But the policy includes carrots as well as sticks. When an associate passes a sting, he/she receives an automatic $25 bonus and a Terrible Herbst pin, plus he/she receives the satisfaction of playing a part in keeping alcohol and tobacco out of the reach of minors. Passing associates also become eligible for employee-of-the-month honors and a dinner as part of a special manager’s meeting for added recognition.

Pidsosny says even though most Nevada retailers have stepped up efforts to curb sales to minors, Terrible Herbst’s approach stands in a class of its own. The combination of education and positive reinforcement has produced results not seen in the operations of most of the other retailers in the state.

“The incentive model is more effective than punishment,” she says. “Research shows that the average clerk in a convenience store usually walks off the job when penalized—and down the street to work in another store. This combination of incentives and training is what makes Terrible Herbst such an enlightening case study. They were the only business presenting at the national Enforcing Underage Drinking Laws conference.”

Terrible Herbst also employs additional safeguards to protect against sales to minors by making store managers more accountable. The chain holds monthly contests based on a number of metrics, in which managers are eligible to win TVs, VCRs, gift certificates and a grand prize of the use of a company truck and gas card for one month, along with a pizza party for their staff. In order to qualify for the grand prize, stores must pass all compliance checks, including stings.

“Once you get in the habit of not asking-[for an ID], you no longer ask, so we need to make sure our employees are always asking,” Philpott adds. “We took another step by adding bright ‘We Card’ signage in our stores because it signifies to underage customers that they won’t be able to buy alcohol, tobacco or gaming services in our stores.

“We do fail [a sting] once in awhile, but when we do we don’t accept it,” he continues. “We go in and see what we did wrong so we can make the process better.”

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