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The Loss Prevention Tips You Need For Your Business

The Loss Prevention Tips You Need for Your Business

Shoplifting or retail loss costs retailers a huge amount of money on an annual basis, U.S. retailers lose billions of dollars every year. This is why loss prevention methods are so important. While losses are bound to happen, every business needs to take steps to minimize losses in order to survive. 

Throughout this guide, we’ll discuss everything you need to know about loss prevention techniques and procedures, loss prevention guidelines, and more.

How Does Retail Loss Happen?

Retail loss, also known as retail shrink, refers to a number of different situations or factors that can lead to businesses losing money through the loss of retail items on a daily basis. The most common situations include employee theft, shoplifting by consumers, and return fraud. 

12 Loss Prevention Tips for Your Retail Store

If your business is suffering from retail loss or retail shrink, you need to implement loss prevention techniques to protect your company from further losses. Here are our top twelve recommended loss prevention tips and tricks for the most common types of retail loss: 

Shoplifting

1. Organize your shop to reduce shoplifting

One of the best loss prevention tactics is organizing your store in a way that decreases shoplifting, as shoplifting is one of the most common forms of retail loss. If your shop is poorly organized or cluttered, it’s much easier for customers to steal items without being seen by security cameras or employees. You can reduce shoplifting retail shrink by organizing your store so that it’s easier for your employees to see all customers throughout the store at all times. Make sure your signs and displays are not too tall or obtrusive, as large signs can give shoplifters an easy place to hide. We also recommend installing mirrors throughout the store to remove any blind spots. If you have any expensive items, we strongly suggest using locked displays or keeping those products closer to the register.

2. Take the time to greet and help your consumers

One of the most effective yet often overlooked loss prevention procedures is training your employees to take the time to greet and help customers when they come into the store. Once your store is properly organized, you should take advantage of the new layout by ensuring that your employees are as attentive as possible while on the shop floor. They should greet each customer as they walk in, make proper eye contact, ask questions, and engage the customer in conversation. The consumers will certainly enjoy the extra attention, and those who might shoplift will be deterred because they know that employees are engaged and watching them on the shop floor.

3. Train your employees to recognize suspicious customer behavior

It’s also crucial for your employees to be able to spot and recognize any suspicious consumer behavior, like customers switching price tags, looking around them to see if they’re being watched, moving away from employees, picking up retail items and replacing them repeatedly, and moving products to different packaging. You can create procedures and protocols for employees that recognize any of this suspicious behavior, including handling a security alarm or using safety words to communicate with other employees.

4. Install a security system and advertise your security measures

We also suggest installing a security system if you don’t already have one. A security professional can assist you in selecting the right places to install security cameras throughout your store, as well as a security camera and monitor installation. It’s also important to tag products with security sensors and implement an exit sensor system if you don’t already have one. These are especially effective at deterring people from shoplifting because they know you have these security measures in place, and they’re more likely to be caught when leaving the store. This is also why you should put up signs around your store warning potential shoplifters and customers that security cameras are watching them, as well as the potential consequences of shoplifting (such as arrest or hefty fines). Just be sure not to put up too many signs, as you don’t want to overwhelm or frighten your paying customers.

Returns Fraud

5. Understand the kinds of return fraud

In order to reduce retail loss, it’s important to fully understand the various kinds of return fraud that can occur in your store. Return fraud techniques include things like purchasing a new product identical to one the consumer already has before returning the old item for a refund, copying receipts and returning products, buying products with fake money, and returning the product in exchange for real money. Other examples include purchasing and using a product before returning it, or stealing a product and returning it for a refund. Train your employees to recognize any of these instances of return fraud and how to handle the situation should it arise. 

6. Track inventory

One of the most effective retail loss prevention tips is to track your inventory. If you don’t already have an inventory tracking system, it can be hard to recognize returns fraud or theft when it happens. That’s why you should implement a way to track inventory so that your workers can count the inventory without taking every single product to the scanner. This method can also help your employees recognize fake returns and ensure that consumers are correctly following the return policy.

7. Reduce cash payments

If you have a cash drawer at your store, it can be easier for customers to make fraudulent returns. They can simply buy a product with fake money and return the product for real cash. That’s why we recommend reducing your cash payments and either encouraging or requiring your customers to use digital wallets, credit cards, or other digital forms of currency. Overall, this change can help streamline the checkout process for both customers and employees while reducing returns fraud. 

8. Require receipts for returned items

You should always require receipts for returned items and take other steps to prevent returns fraud. For example, you can issue refunds to the customer’s original payment method rather than in cash. You can train your workers to spot the possible signs of returns fraud and how to handle them. You can require customers to provide identifying personal information (such as name, phone number, etc.) when making a return and asking for a refund. Train your employees to always confirm that the returned product actually matches the product on the receipt. You can also enforce a strict return window for your customers. Thirty days is typical for most stores. 

Employee Theft

9. Learn the ways employees cause retail loss

One of the best ways to reduce employee theft is to learn the ways employee theft can happen and how workers can cause retail loss. For example, employees can either steal money from the cash register or use their employee discount for family and friends. Some employees may even steal products directly, just like shoplifters do (keep an eye on back warehouses or storage rooms where employees have access). Employees might also fail to ring up a product that a family member or friend purchases, steal a customer’s credit card number and use it to buy a product, or create a fraudulent return on an item and keep the cash.

10. Use access control systems

An access control system is an excellent way to limit which employees have access to certain materials or areas. The system also allows you to monitor all of the access activity so that you can tell when someone enters or leaves an area. This control makes it easier to both reduce shoplifting and prevent certain employees from committing employee theft.

11. Hire employees for their integrity

We recommend considering your hiring practices when you’re interviewing someone new for your store’s staff. You should always ask for professional references from employers and colleagues, ask candidates how they would handle a situation with shoplifting, returns fraud, or employee theft, and watch for honesty during the hiring process.

12. Offer employee incentives for reducing retail shrink

You can also offer employee incentives for reducing retail loss or shrink. For example, you can create ways for your employees to report suspicious activities from other employees and train them to spot fraud or theft from coworkers. You can also give them a bonus or extra vacation days for reducing retail loss and focus on a more positive store culture overall.

Shoplifting, fraud, and employee theft are any business owner’s nightmares. The above list of loss prevention tips is just a shortlist of our top recommendations for protecting your business. Contact The Guard Alliance today if you’d like to learn more about retail loss prevention techniques or security guard services

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