Loss Prevention Strategies that Work

A retail business is significantly more vulnerable to theft than other types of businesses, which is why employing solid loss preventing strategies is necessary. If you aren’t focused on keeping your shrinkage percentage as low as possible, you could wind up filing for bankruptcy before your retail business even gets off the ground.

According to Shari Waters of About.com, the four leading causes of shrinkage in the retail business are employee theft, shoplifting, administrative error and vendor fraud. The first two are more likely than the latter two, so that is where your loss prevention strategies should be focused.

Monitor Employee Check-Out

In many retail businesses, employees are allowed to check out with their own purchases before- or after-hours, and it is possible for two employees to work in tandem for theft. This is why employee check-out must be monitored by management as the first of several loss preventing strategies.

Consider appointing one or two managers to handle all employee check-outs. This way, you know exactly who is ringing up employee purchases, and you’ll be able to go directly to the source should a problem arise. It is also important to monitor employee returns as part of your loss prevention strategies if you want to avoid theft in that regard.

Check Boxes and Packages

One of the most popular ways in which customers steal from retail businesses is by putting products in similar boxes with lower price tags. When employees check out customers, your loss prevention strategies should include checking inside all containers that can be opened inside the store. this is especially true if the weight of the package seems wrong for what is supposed to be inside.

Teach employees how to tell if boxes or packages have been tampered with. Your loss prevention strategies in retail should include keeping your employees up-to-date on how shoplifting occurs and what retailers can do to stop it.

Assign Store Sections

Employees will be more alert to theft if they are responsible for keeping an eye on a relatively small section of a store or shop. They will be intimately familiar with that section and more likely to notice if a customer or product seems off.

Ask employees to stick to their sections except in an emergency if you want to set good loss prevention strategies. If they have to leave to retrieve an item from the storage room or to ring up a customer, they should ask someone to monitor their section until they return.

Review Security Footage

Installing security cameras in your retail store is a good start to loss prevention strategies. However, thieves know that retail business owners rarely review the footage unless they know theft has occurred. Take it a step further by actually reviewing those tapes.

You don’t have to do this every day; it would probably be a waste of time. However, make a point to fast-forward through footage every few days, and you’ll be surprised by what you might have captured on tape.

Approach Customers

Many retail business owners make the mistake of trying to catch thieves in the act. Unless you have a loss prevention officer on your staff, this is not the most efficient way to avoid theft in retail. Instead, encourage employees to be friendly. They should walk up to customers as often as possible to offer assistance because a thief isn’t going to steal if he or she thinks someone is watching.

Stock Your Own Shelves

Vendor theft is one of the lowest causes of shrinkage in retail, but it shouldn’t be overlooked. If vendors bring in product to your store, establish loss prevention strategies that include stocking that product yourself. If you allow vendors to do it, they might walk off with merchandise that has already been receipted to your store, resulting in a loss for you rather than the vendor.

None of these loss prevention strategies will stop all theft in retail, but they can certainly curb it to a minimum. The most important thing is to keep your eyes open at all times and to crack down on theft as soon as it becomes an issue. Make sure customers and employees know that you do not tolerate theft and that you will prosecute given the opportunity.

Source:

Shari Waters, Top 4 Sources of Shrinkage, About.com