Retail Theft: 8 Loss Prevention Tips for Retail Stores
In the United States, retail theft is an increasing issue. Retail businesses lose billions of dollars annually to theft and shoplifting. Retailers, their staff, and their clients are all directly impacted by this revenue loss. From organised crime and cybercrime to staff theft and shoplifting, there are many different types of retail theft. Retail theft always hurts businesses, regardless of how it manifests.
“Retailers face a challenging environment combatting retail theft, which is plaguing the industry. The National Retail Federation reported a 26.5% increase in Organized Retail Crime (ORC) in 2022. A more disturbing trend is the increase in violence and aggression used to carry out these crimes. Executives from Walmart, CVS, and others testified before congress as well as the Senate Judiciary Committee to discuss organized retail crime, which occurs on average every three minutes. In just two minutes criminals abscond with $2,000 worth of merchandise,” said Cathal Walsh, Vice President, Physical Security and Chief Security Officer at Guidepost Solutions.
Retail theft leads to a retailer losing profits from the potential sales that may have been generated by the stolen goods. Also, shops must allocate funds to initiatives that aim to reduce and prevent theft. This may entail adding more security guards, setting up surveillance cameras, locking up items and putting in place sophisticated tagging systems and other anti-theft procedures.
“Locking show cases are the standard “go-to” theft deterrent for retail stores, but they are a poison pill. It is a well know secret that deploying locking show cases, to slow down theft, is shown to reduce sales of the products contained inside it, by over 25%,” Keith Carpentier, President & CEO, Qbuster technologies.
There are other, less evident drawbacks, though. To protect themselves against theft-related losses, for instance, shops frequently pay a premium. In order to pay for the expense of theft prevention measures, they might also be obliged to hike prices, which could damage customer loyalty. Also, people may shop elsewhere if they feel unsafe or uneasy in the retail setting.
“Deploying security controls within retail stores may dissuade criminal activity if they assess other locations provide a less challenging environment. When implementing a crime prevention program, one should reference the three guiding principles of Routine Activity Theory: 1) an accessible target; 2) the absence of a capable guardian; 3) a motivated offender. When viewed through this lens, retailers can better anticipate how crime might occur,” said Walsh.
Retail theft can have a negative impact on employees as well. Employees in sales or loss prevention, for example, may experience greater stress as a result of the increased risk of theft. Additionally, they might have to deal with the shame and worry that come with the prospect of losing their jobs as a result of theft. In extreme circumstances, workers can even be charged with a crime.
Carpentier says, “The increase in ORC (organized retail crime) will only be exasperated by an impending recession in the united states, so retailers will be forced to continue this arms race against thieves for a long time to come.”
We reached out to loss prevention experts and retail store owners to get their advice on how to prevent and combat the rise in retail theft:
RFID Technology, Surveillance & Visibility
Preserve clear sight lines, which may require a layout re-fresh to enhance visibility. Maintaining appropriate lighting levels may dissuade criminal activity. Strategically place products of high value behind the counter, in locked display cases, or use security cables to attach products to secure mounts.
Deploy a video surveillance system to follow suspects throughout the shoplifting / crime-cycle. Video analytics and artificial intelligence can be configured to follow suspects and send alerts when merchandise is concealed and void of a payment transaction. Facial recognition software can be used to quickly identify repeat offenders, follow them throughout the premises and alert law enforcement to their location.
Implement and accurately maintain an asset management and inventory systems. Anti-theft technologies such as Electronic Article Surveillance (EAS) or radio-frequency identification (RFID) are widely available and should be incorporated into retail loss prevention programs.
Cathal Walsh, Vice President, Physical Security and Chief Security Officer at Guidepost Solution
Install BOPIS for High Ticket Items
BOPIS (Buy On Line Pick Up In Store) during the Covid years. Now that same customer engagement and order processing workflow can extend to in store purchases of high theft, high cube, complex and high value products.
Currently, Qbuster is working with major consumer brands, and national retailers (including the big 3 pharmacy retailers) to onboard Aisle Buyer technology to empower guests to scan a QR code and place items in a digital cart instead of having to look for a manager with a key.
The items in the virtual cart are picked just like a traditional BOPIS order, but the customer has not wasted time, the retailer has not wasted labor, and the brands have eliminated theft.
Technology, including AisleBuyer, are powerful in store technologies that are transforming the win-lose paradigm of the locking show case, where Loss Prevention wins and customers lose, to a win-win paradigm where both Loss Prevention and Customers can win.
Keith Carpentier, President & CEO, Qbuster technologies
Train Employees on Shrinkage and Loss Prevention
Employee training is the number one factor affecting retail shrink and loss prevention. Training can help reduce the likelihood of theft, fraud, and errors that can lead to financial loss.
Training employees on shrink and loss prevention helps them become more aware of the potential security threats in the store. For example, the National Retail Federation found that retailers that invest in employee training and awareness programs experience a 60% reduction in shrinkage on average.
The Loss Prevention Research Council found that retailers that provide ongoing training and education on their policies and procedures experience up to a 50% reduction in shrinkage. Training ensures that all employees are aware of and follow consistent policies and procedures for preventing shrinkage and loss.
Will Strickland, Management Consultant, Consulting Company
Take Hangers From Customers
As a lingerie store owner who fits customers for bras, one loss prevention tip I recommend is to take hangers from customers when they enter the fitting rooms. This may seem like a minor detail, but it can be a subtle way to prevent theft.
By taking hangers from customers, you can easily keep count of the items they have taken into the fitting rooms. This way, if a customer leaves without purchasing an item, you will immediately know which item is missing. Keeping track of hangers can also help you discover if someone has stolen something.
If you find a loose hanger on a rack, it can be a sign that theft occurred. For customers who may be suspicious, it’s best to over-assist them so they know you are keeping them aware of their presence in the store.
Offer to help them with everything they need and keep a close eye on them. This can help deter theft while also ensuring that all the items are there.
Tracey C, Senior Bra Fitter, Illusions Lingerie
Change Room Mirrors Help Prevent Theft
The most important part of theft prevention is training the retail staff to look out for possible theft and watch the dressing rooms [and mirrors] closely. Making sure the store is set up in a way to optimize theft prevention and putting a lot of mirrors up also can help. Ensure that the staff has a clear action plan for what they will do if they see a theft occurs is also vital.
It’s also imperative to have cameras over top of all cash registers, as employee theft does happen. A great team starts with the retail associates and their managerial team.
Linda Johansen-James, Founder/CEO at International Retail Group
Use Loss Prevention Technology
Using technology can also help to reduce losses in a store. They use RFID tags or labels on high-value items that trigger an alarm if they leave the premises without being deactivated at the checkout counter.
Similarly, using entrance or exit doors with electronic alarms can alert staff of potential attempts to steal products from the store. Finally, intelligent cameras provide real-time analytics that can monitor the number of customers in a store, assess their behavior, and alert staff to suspicious activity.
Karl Robinson, CEO, Logicata
Think About Store Design
Dark, unnoticed, and uncared-for environments are considerably more likely to be places where crime is likely to occur. We have long recognized the relationship between design and the risk of crime.
Consider the architecture of retail establishments to avoid creating conditions that make it easy for criminal activity and challenging for store staff to police. It can be simpler for thieves to operate and feel that it is easy to do so when there are tall shelves, poor sight lines, and insufficient lighting.
The alternative is to consider how to use effective design to “amplify” risk in the offender’s perception, making them believe they are more likely to be discovered because there are no “easy” locations in which to carry out their nefarious activities.
Janie Doyle, Marketing Director, SC Vehicle Hire
Always Use a POS System
Tracking inventory with a point-of-sale (POS) system is a good practice for loss prevention. Inaccurate inventory tracking means there is virtually no oversight on the missing products, giving thieves free rein to take items as they please without a record.
A POS system is the all-in-one solution to not just loss prevention, but also a better customer experience and improved organization across the entire store.
Alexandre Robicquet, Co-Founder and CEO, Crossing Minds
I have 15 years of experience in the retail industry including expertise in marketing, operations, merchandising, buying, shopping and technology. I am a speaker, consultant and former senior managing director of The School of Retailing, University of Alberta. My education includes a Bachelor of Commerce Degree from The University of Alberta in Marketing, Certificate in Real Estate and a Diploma in Fashion Merchandising and Buying from LasSalle College, a Canadian private school founded in 1959 by fashion designer Jean-Paul Morin.