Understanding the Rise of Retail Theft During Economic Downturns

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Global and domestic factors indicate that the United States is in an economic slowdown, forcing retail owners to examine how economic challenges affect retail security measures. The rise of retail theft during downturns is a complex issue that extensively impacts everyone, from small business owners to everyday consumers. Addressing it proactively is the best way to mitigate its significant financial and reputational losses.

The Connection Between Economic Downturns and Retail Theft

Need and opportunity are potent drivers of crime, and need is felt most fiercely when the economy is in a bad state. Consumer behavior during economic downturns often changes. Long-term financial insecurity and uncertainty result in feelings of desperation. In some cases, instances of petty crime and shoplifting rise as more people realize they can no longer afford necessities. 

Economic recessions often correlate with upticks in property crime and petty theft. As prices continue rising, it seems logical that more people may resort to unlawful measures like shoplifting to afford essential items. Understanding the connection between recessions and retail theft is the first step to preventing crime.

In simple terms, financial strain can make people feel like they have to take desperate measures to survive. A recent survey showed that 20% of Americans have admitted to stealing from stores in the past year. Of those who admitted to theft, 90% said they stole because of inflation and the current economy. Others cited reasons like affordability, making ends meet and saving money. 

In addition to straining individuals, economic slowdowns create a market for stolen goods, which increases organized retail crime. People are already under strain and buying the cheapest available goods. They may turn to the resell market when prices outweigh what they can afford. The demand for more affordable goods incentivizes thieves to provide the supply, and everyday people take advantage of the discounts.

Economic downturns affect everyone, including you and your employees. A massive 61% of Americans are experiencing financial hardship, and frequently targeted products often include necessities. If you need to secure your retail store, it makes sense to cast a wide net and consider the different types of retail theft. It’s best to identify what makes you vulnerable to shoplifting. 

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Some common types of retail theft to expect in economic downturns include:

  • Shoplifting: Desperation often drives retail theft in economic downturns. People may be stealing essential items because they can no longer afford to pay for them.
  • Organized retail crime: This type of theft often involves groups of people. They steal large amounts of products and sell the stolen merchandise.
  • Violent theft: Large groups may enter stores and threaten violence unless your employees hand over cash, gift cards or valuable goods.
  • Internal theft: Employee theft trends in retail are challenging to ignore. Recessions affect employees, too, and they often have families and other responsibilities. They may steal goods outright or provide excessive discounts to loved ones. 
  • After-hours retail theft: Some criminals waver at the thought of entering a busy location. However, once you close up for the day, your storage areas are excellent opportunities for thieves.

Theft and Its Economic Impact on Retail Security

A rise in shoplifting, employee theft and other retail crime during recessions has profound economic repercussions. These issues contribute to substantial financial losses, and many retailers must make tough decisions when budgeting for retail security.

While enhancing your on-site security requires an investment, the consequences of underfunding in recessions can be severe. Retailer losses in 2022 reached almost $100 billion, which is considerably more significant than the cost of security guards. In addition to financial issues, your employees often take the brunt of these crimes. They face threats, abuse and violence. Over time, you’ll experience reduced morale.

Loss of merchandise or damage to your store forces you to increase your prices to recoup your losses. When you pass the cost of theft onto your customers, you risk losing them to less expensive stores. Losing customers may mean you have to let your employees go, and the cycle continues. While the upfront investment in proactive security may seem high, it pales in comparison to the cost and consequences of theft.

The Role of Security Guards in Retail

The retail world is unpredictable, and the importance of security personnel during economic hardships cannot be overstated. Security guards cover all the bases of threat mitigation. They’re an effective deterrent, trained to detect, delay and defend against criminals. 

Many businesses are hiring guards as one of their first security measures for economic downturns. They offer several unique advantages, including: 

  • Deterring theft and shoplifting: The presence of security guards alone can be enough to discourage shoplifters. Most criminals look for opportunities to act undetected as they fear being caught. When they see armed or unarmed guards, they’re likely to leave and look for easier targets. 
  • Providing an emergency response: When a theft or security situation happens, it’s natural for your employees to find a calm response challenging. Trained security guards can respond to medical emergencies, fires and armed robberies, giving you peace of mind in various situations.
  • Preventing theft and shrinkage: Professional security guards are trained to identify suspicious behavior, including employee theft. They’ll monitor video surveillance and check bags when necessary, protecting you from internal and external theft. 
  • Safeguarding the retail environment: Having security guards on-site does more than deter thieves — it makes your customers and employees feel safe in their environment. Security personnel also contribute to your customer service, helping with directions and answering questions.
  • Providing access control: Professional security guards can prevent unauthorized access to critical areas like offices and storerooms, giving you a safe space to store your inventory.
  • Collaborating with law enforcement: Security personnel will apprehend and hold criminals until the police arrive. They’ll also collaborate with law enforcement to address organized retail crime, benefiting stores in your area.

Effective Strategies for Preventing Shoplifting During Downturns

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Although security guards are the foundation of any successful security strategy, they work best when combined with other security measures. The best loss prevention strategies for retailers include several layers of security to ensure a proactive and practical approach. Some strategies to maintain a robust physical security posture throughout economic downturns include the following:

1. Keep Your Store Layout Organized

Your store’s layout should increase visibility and make it more challenging for thieves to act. An open design that minimizes blind spots and adequate lighting can achieve complete visibility and limit their hiding places. Avoid overcrowding your store with merchandise and place high-value items near the register. Put new releases front and center to give shoppers quick access and facilitate easy monitoring.

2. Build Relationships With Your Customers and Employees

Your customers and employees are essential to your business, and community engagement in retail security is critical. The better your relationship with them, the less likely they are to steal from you. When customers see suspicious activity, they’re more likely to report it to you if they have a relationship with you.

Building relationships with your employees is essential. Feeling valued, appreciated and part of a team makes them less inclined to engage in malicious behaviors, including theft. They’re more likely to report other employees’ suspicious behavior when engaged with and invested in your business.

3. Manage Your Inventory Effectively

Managing inventory is among the best practices for mitigating employee theft in tough times. You can use innovative technology in loss prevention. Many apps and software on the market offer robust auditing and inventory management capabilities. They identify items that are low in stock, order replacements and track trends over time.

4. Identify and Secure At-Risk Merchandise

The latest releases and consumer electronics are often highly targeted, but unsecured merchandise is vulnerable in economic downturns. Your inventory management practices will help you identify popular and frequently stolen items so you can strategize the best ways to secure them. For example, keeping high-value goods in a glass case could deter opportunistic thieves. You can also ask your security guards to pay special attention to areas where these items are displayed in your store.

5. Train Your Team to Identify Theft

Your employees are the first line of defense against shoplifting. They can work with your security team to identify and react to suspicious activity. Train them on what to look for and how to avoid scams. For example, they can greet each person who enters your store, sending a message that they’re engaged and aware of what’s going on in the store.

Monitor theft trends in your area and ensure your team checks high-value merchandise. Consider showing only a few targeted items at a time and keeping the rest in storage where it’s easier for your security team to monitor. If you restock during business hours, avoid leaving merchandise unattended on the sales floor. Your security guards can monitor it throughout those periods.

6. Install Cameras and Mirrors

Installing cameras and mirrors is another effective way to prevent retail crime. Most criminals balk at the thought of being caught red-handed, which makes them an effective deterrent. Cameras can be discreet or visible, depending on your preferences. You can also install convex mirrors to help your staff and security see around corners.

Invest in the best image quality your budget allows. It helps identify when theft is happening and gives you a clear view of the perpetrators, who you can pass on to law enforcement.

7. Use Anti-Theft Devices

Sophisticated anti-theft tools and devices are critical for preventing internal and external theft. Advanced devices like radio frequency identification and single-key security solutions alert you when someone removes an item from your premises. These solutions regulate employee access while maintaining a comprehensive audit trail.

8. Schedule Extra Staff During Peak Times

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Shoplifters often attempt to distract your staff, which is easy for them during busy times when your team is rushing around. Schedule extra staff and security guards to protect your store in peak times and holidays

9. Develop an Incident Response Plan

Incident response planning in retail allows you to detect, investigate and respond to incidents quickly. It solves a single, spontaneous event and ensures everyone understands their roles and responsibilities when an incident occurs. Create an incident response plan with your security team, as they have the knowledge and expertise to find the most effective solutions. 

A well-structured incident response plan minimizes losses and helps keep your employees safe. It may include the following elements: 

  • Preparation and training: Conduct regular training sessions for employees and define their roles and responsibilities in an incident to ensure minimal friction.
  • Detection and reporting: Ensure your security team actively monitors surveillance feeds, especially during peak hours. Develop a system for logging suspicious activities to identify repeat offenders. Establish clear protocols and forms for your employees to report incidents.
  • Response procedures: Your security team will assess the situation quickly and determine the best course of action. If necessary, they’ll detain the perpetrators and engage with law enforcement. 
  • Post-incident actions: Conduct debriefing sessions after a theft or emergency to review your responses and identify improvement opportunities. Regularly update your security policies and response plans to encourage a culture of continuous improvement. 

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Practice Effective Risk Management in Retail Environments With The Guard Alliance

When the economy is in a downturn, proactive security measures could mean the difference between a success and an expensive lesson. Enhancing your security can be challenging, but you can confidently do your daily business with The Guard Alliance. We have over a decade of specialized experience in commercial and residential security, making us perfectly positioned to minimize your retail losses. 

We can deploy armed and unarmed guards, vehicle patrol, and fire watch guards to improve your retail security outcomes. Our highly trained and experienced security guards will advise you on your security risks and help you develop best practices to prevent losses and safeguard our employees. Contact us for a customized quote and get one step ahead of recession security challenges today!

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