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Market Research 101: What Are Employee Compliance Audits?

Posted by TrendSource on 8/22/19 8:46 AM

Labor Day is rapidly approaching so the kids lucky enough to not already be back in school are running out of time; it also means that parents across the nation are rejoicing—the long summer vacation nightmare is ending.

Here in the halls of TrendSource, it’s business as usual: another week, another lesson in Market Research 101. Having started our unit in audits last week with marketing audits, this week we are moving into employee compliance audits. What is a compliance audit, how do they work, who uses them, and why is TrendSource so great at them?

Pull up a chair, Market Research 101 is back in session.

What is a Compliance Audit?

Compliance audits are a unrevealed mystery shop market research methodology designed to ensure customer-facing employees remain compliant with local, state, and federal restrictions. These restrictions are often based on age (such as alcohol), but can also relate to permitted quantity per purchase and other regulations.

Who Uses Compliance Audits?

Compliance audits are part of the due diligence retailers must perform to remain compliant with government regulations. They are essential for retailers, grocers, and even restaurateurs that sell regulated products.

Often, these products are age restricted, such as:

  • Alcohol
  • Tobacco
  • Cannabis
  • Adult Products (marital aids)
  • Firearms

Other products are not age restricted but nonetheless face legal regulation. Examples of these include:

  • Over-the-counter medications (usually the ones that can be converted into methamphetamine a- la Walter White)
  • Firearms (which are not only restricted by age but also subject to background checks and other regulations)
  • Many more

market research 101 what are compliance audits

Why Are Compliance Audits Important?

Oftentimes, market research methodologies answer abstract questions meant to increase efficiency, profitability, and optimization. With employee compliance audits, the questions are relatively straightforward: are employees complying with the regulations that govern the industry?

Answering this question is essential because if your employees are declared non-compliant by government regulators, your business will face fines at best and closure at worst.

Compliance audits, then, allow you to take corrective action on both a micro and macro level before you face punitive action. Nip non compliance issues in the bud before they escalate to costly fines and even license forfeiture, refine training programs if instances of non-compliance begin to trend upwards, and take small corrective actions to address isolated incidents.

How TrendSource Does Compliance Audits

With age restricted products, the methodology is relatively straight forward. TrendSource dispatches Field Agents between the age of 21 and 25 years-old to retail locations with instructions to purchase an age-restricted product and take note if the cashier fails to ask for age-verifying identification.

The process is similar with other restricted products—for instance, in a pharmacy, a Field Agent will attempt to purchase more than the permitted quantity of sinus medication to ensure employees are following laws restricting its sale.

Compliance audits are unrevealed, meaning the Field Agent does not reveal themselves to the cashier after the purchase, but rather files a report through TrendSource, alerting you to incidents of non compliance and possibly trending noncompliance at specific locations.

TrendSourcde’s first-in-class Field Agent database can be filtered to ensure agents are the appropriate age, speak the necessary language(s), and have whatever government-issued identification the audit requires. We also guarantee 100% coverage 100% of the time, meaning we can hit your locations simultaneously, wherever they are.

2019 Alcohol Industry Report

Topics: Food Service, Compliance, Grocery, Compliance Audits, Retail, Market Research 101

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