5 Ways to Preserve Profits Through Retail Loss Prevention
The retail world is constantly changing, and technological advancements enable more types of shopping than just in-person options like store pick-up, delivery, e-commerce, and more. While increased shopping opportunities offer consumers more choice, they also present increased opportunities for retailer loss. This insecure environment creates repercussions that don’t just affect your bottom line but can also directly threaten customer relationships and satisfaction if not addressed.
Active retail loss prevention plays a key role in maintaining retailers’ profit margins, protecting consumer relationships, and minimizing risk—no matter the stability of the retail marketplace or the type of products you sell. These five retail loss prevention methods can work together to minimize retail shrink and help you form a strategy to keep your products safer.
1. Communicate Watchfulness
The simplest way to prevent in-person retail loss is by turning your employees into security assets as they’re already your eyes and ears on the storefront floor! From day one, train all employees to greet guests and make eye contact, and engage with them as they shop. According to the Small Business Chronicle, even a simple greeting from an attentive employee can alert a would-be shoplifter that their actions are likely to be noticed. Identifying potentially suspicious customer behavior is also key: intuition and effective reading of non-verbal queues (like loitering and nervous or awkward behavior) play a significant role in anticipating and mitigating losses.
You should also post clear signs outlining that shoplifters will be punished to the fullest extent of the law and that you have—and use—a security system, placing cameras in obvious locations. These safeguards provide valuable leverage and ensure that no shoplifter can claim they don’t understand the penalties of their crime or that they were unaware they’re being watched and argue against their arrest.
2. Use Technology to Your Advantage
Even with excellent, alert customer service, the average shoplifter is caught only one in 100 times, proving that traditional retail loss preventions alone won’t protect your inventory. The National Retail Federation’s 2018 National Retail Security Survey revealed more than 50% of retail shrink (on-hand inventory versus recorded inventory level) is actually due to employee theft or other mistakes (paperwork or billing errors of mispriced items) and not external theft.
If you’re concerned some losses might be happening this way, consider tracking and checking employee movements and transactions with smart product sensors, digital employee time tracking, and mobile checkout or inventory devices that are used during shifts. Business News Daily reports that”[t]he main goals behind [employee monitoring systems is] to prevent internal theft, examine employee productivity, ensure company resources are being used appropriately, and provide evidence for any potential litigation.” While employee monitoring effectively minimizes internal retail loss, be sure to disclose the change to all employees and research the legal dos and don’ts to make sure you’re not violating any privacy laws.
Managing sales and predicting shopping trends are also simpler with technology. Automated inventory controls, security tags, and POC and IoT-enabled theft prevention systems don’t require direct employee efforts and free up your team to focus on helping customers instead of over-focusing on retail loss prevention. These tools also provide valuable, tangible data that identifies how/where retail loss is occurring so it can be more effectively mitigated.
3. Organize Your Storefront to Minimize Theft
Though brick-and-mortar storefronts only account for one shopping avenue, their high level of in-person inventory makes them easy targets for retail loss. Thankfully, product positioning, display layouts, and even store floorplans can be strategically designed to deter theft. Keep displays uncluttered and below eye level, making it easy for your staff to notice if items go missing. Some additional store layout and organization tips you can implement include:
- Creating displays and shelving to encourage customers to flow through your storefront in a specific way, making them easier to watch.
- Placing high-value merchandise in a highly visible, secure area, like behind registers or in clear glass cases, to minimize easy grabbing.
- Having employees stationed near exits or high-theft areas to maximize visibility and make it harder for shoplifters to slip through unchecked.
- Staging your checkout area close to either the front or back of the store, where a larger employee presence creates a natural retail loss deterrent.
4. Handle Checkout Procedures with Care
Product manipulation (tag switching or security tag removal) and payment-and-return fraud are the most common retail loss methods for brick-and-mortar stores. Since each of these actions involves checkout procedures, retail loss prevention efforts should get extra attention here to ensure all of the standard procedures are being followed at the registers. Require tags and receipts for all returns to mitigate returns theft, and make sure security tags are being removed from all products. That way, if a product is being returned with a security tag still attached, you know that it was shoplifted. Minimize cash transactions by waiving credit card surcharge fees and make sure all bills larger than $20 are being checked for counterfeiting.
If your storefront uses self-checkouts, security scales, which compare the predetermined weight of scanned items with the weight of bags, add extra accountability if the area can’t be staffed. Many big-box stores like Sam’s Club and Costco also post employees at store entrances to scan receipts and purchased items. This final retail loss prevention method ensures that all items leaving the store—even those without security tags or monitored barcodes—have actually been purchased.
5. Let an Expert Help
While loss prevention is key in protecting profits and maintaining positive consumer relationships, it’s not enough on its own to guarantee that retailers’ time and efforts are indeed profitable. Collaborating with a cutting-edge risk management partner can improve your processes and ensure all resources are not just efficiently used but also optimized, so your team can focus on their customers.
At Resolver, our sophisticated, easy-to-use retail loss prevention solutions are designed to help your growing enterprise reach new heights. Whether you need improved corporate security, best-in-class risk and compliance, or experienced IT management, Resolver’s technology and data-driven reporting help you drive your business forward.
Contact us today to request your demo and see how our solutions can work for you.