Theft and loss are issues which all businesses could face at some point in their operational lifecycle. Thankfully, there are a number of steps you and your team can take to protect your business against loss and unlawful activity.
From comprehensive loss prevention plans protecting all assets a business possesses to small insurance policies and back-up plans; there are plenty of ways to minimise theft and the impact it has on your business.
If you require assistance with implementing a stronger loss prevention plan, be sure to read this guide detailing types of loss and how to protect against them.
Accounting for a large chunk of loss, external theft includes things like straightforward shoplifting, as well as more complex examples such as returning stolen items for store credit or cash, and using counterfeit money to purchase merchandise.
Employee theft can be another big issue. Again, this may be taking items that haven’t been paid for, or it may take the form of processing fake returns, giving out fake gift cards, leaving items off an order, or taking cash from the till.
Although these tend to be honest mistakes, admin errors can make up a hefty chunk of a retailer’s shrinkage. If your business relies on manual processes and systems, then you may be leaving yourself open to this kind of loss.
Although it’s the smallest contributor to loss, it’s still worth investigating your suppliers to see if any fraud is being committed by them. If your loss prevention methods aren’t providing any tangible results, it could be due to issues with your manufacturers and suppliers.
A low-cost way of deterring shoplifters; consider placing anti-theft signs close to the entrance of your business and in any areas that are difficult to police, such as in fitting rooms. Emphasise that you’ll prosecute; it’s important to illustrate how no-nonsense you’ll be in the event of shoplifting.
Surveillance cameras can be beneficial to the security of your store, too. If you have the money to invest in them, then they can monitor activity 24/7 and provide you with recordings that you can revisit in the event of any incidents. Depending on the security system you have in place, it’s possible to integrate these cameras with your point-of-sale system and any other loss prevention programs.
If you lack the funds for CCTV, then consider using security mirrors instead. They’re inexpensive but provide an effective means of spotting suspicious in-store activity. Identify any blind-spots in your store as these are the areas where mirrors can be most beneficial; places such as corners that aren’t visible from the cashier’s side, as well as areas blocked by fixtures and shelves.
Check with your POS solution provider to see if you can set user permissions to enable or restrict certain tasks from being carried out. This is a great way to prevent internal theft, so it pays to be vigilant, even around those you trust.
Staying abreast of your inventory is a big part of loss prevention. If you’re failing to keep track of your merchandise, then this can lead to misplaced products and un-checked discrepancies. An inventory management system allows you to conduct stock checks so you can identify discrepancies and spot any issues sooner rather than later.
Additionally, proper inventory counters – rather than a pen and paper – are far more reliable, efficient and accurate. This can be as simple as phone apps that allow you to scan barcodes using your phone’s camera, which automatically records the SKU.
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Radio Frequency Identification (RFID) comes in the form of chips embedded in product tags or packages. The information contained within them enables retailers to track items using their stock control systems, allowing for real-time inventory visibility and accuracy.
This means that products can be located easily, ensuring everything is in the right place at the right time. This can help retailers catch shoplifters since the tagged items set your store’s security sensors off upon exit. They also make counting much easier, too, as RFID-tagged items can be counted while items are still in boxes or on shelves.
Sizing up your inventory shrinkage is a sensible way to start. By calculating how much you’re losing in annual sales, you can then weigh up how much you stand to gain by putting a loss prevention plan in place.
Your loss or shrinkage is the difference between the value of your inventory on the books and the actual inventory in front of you. Divide this shrink by your total sales for the same period and the result is your inventory shrinkage percentage. The baseline this provides will then allow you to set the goals for your plan.
As the owner, you won’t have to worry about getting buy-in from the top, but you’ll still have to let other employees know about your plan. Be open and transparent about the problem and communicate the shrinkage numbers throughout the organisation. Give them an idea of what you have to gain by addressing the problems and empower them to take responsibility for the potential success. Give them clear benchmarks and reward the employees who go above and beyond.
Take into account the types of loss we mentioned earlier during hiring and training processes. When you hire, consider the qualities and skills that you’re looking for, and take note of candidates who illustrate integrity and honesty. These are the people who will help you reduce shrinkage.
Be sure to provide them with the necessary training to identify and stop shoplifting, too. There are online courses that can help you with this, or you might consider bringing in a third-party loss prevention and security expert who can show your employees the ropes.
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