Shoplifting is the leading cause of retail shrink, a recent survey found, but employee theft is not far behind. According to the 2013-2014 Global Retail Theft Barometer published by Checkpoint systems and The Smart Cube, shrink costs U.S. retailers about 1.4 percent of sales or $45 billion each year. Sources of shrink rank as follows:
- Shoplifting – 38 percent
- Employee theft – 28 percent
- Administration/non-crime losses – 21 percent
- Supplier fraud – 13 percent
As you can see, shoplifting and employee theft account for about two thirds of retail shrink.
The Cost of Retail Crime
Retail crime costs every shopper in the U.S. $403 per year, the survey found. One easy way to deter theft is to post that statistic prominently throughout your store. Reminding the public what theft is costing them encourages your customers to be on the lookout for suspicious activity. It also puts would-be thieves on notice, internally and externally, that someone has to pay for the stuff they’re treating as free.
The survey found that the most popular items stolen were:
- Fashion accessories
- Power tools
- Mobile accessories
- Wine and spirits
Old Tactics Don’t Work
In the past, loss prevention tactics were more personal, hands-on and confrontational. Employees had to visually track suspected shoplifters through the store, waiting until the shopper left without paying to intervene. Loss prevention staff were put in the uncomfortable position of interrogating employees, often with disastrous results.
New Tools That Work
Fortunately, retailers today have a wealth of sophisticated tools for ensuring that their merchandise leaves their stores in the bags of paying customers. Many of these tools do double duty by preventing internal and external theft equally well. You can deter retail theft through the following loss prevention tactics:
- Greet Customers: Encourage employees to greet customers as they enter the store. That personal touch tells would-be thieves that they’re being observed.
- Build Employee Morale: Anything that builds morale discourages theft by making employees feel invested in your success.
- Conduct Quality Video Surveillance: Post cameras in key locations, including store entrances, stock rooms and cash areas. Using quality cameras is key for getting recognizable, actionable images.
- Install Point of Sale (POS) Cameras: POS cameras are a powerful deterrent to employee theft. POS cameras can be tied to transaction data from registers to easily identify errors and false entries.
- Set Up Live Video: DVR Systems allow you to watch your business anytime, from anywhere using any Internet device.
- Use RFID Tagging: One national clothing retailer recently decreased shrink by more than 30 percent using RFID.
- EAS Tags: Electronic article surveillance tags and bar code systems track and protect inventory.
- Use Integrated Security Solutions: Today’s devices are designed to work together to automate and enhance security, making many processes easier. Consult with an expert security advisor to make sure you’re getting the full benefit from your security devices.
The battle against shrink has come a long way, but thieves are always working to outsmart the next generation of technology. That’s why it’s important to partner with a security company that provides ongoing, comprehensive security services, not just an out-of-the-box solution. A dedicated security partner can keep you one step ahead of the curve with the latest and best solutions for your stores.