I would also point out that story points are arbitrary and there is no reason to believe that they are conservative. If that doesn’t go over, I would point out that effort is conservative in the same way that energy is: we know that the sum of the energy in equals the sum of the energy out. We also know that only a portion (Often a very small portion) of that energy produces work. Our velocity in Scrum is a measure of the work we produced in the iteration, not of the total effort that went in.

In other words:

Total Effort = Effort that produced running tested software + Waste

Velocity = Effort that produced running tested software *during the iteration*