Introduction to Retail Loss Prevention
In this blog post on retail loss prevention, our primary focus is on the key security aspects of this costly issue and how to combat retail crime. Implementing an effective retail security strategy can significantly reduce losses related to crime and enhance the profitability of retail shops, regardless of their size.
Whether you represent a large retail chain with multiple premises, a shopping centre, or a smaller boutique shop, the underlying principles remain the same.
Drawing on Titan Security’s extensive experience as a leading retail security company in the UK and across Europe for over three decades, we will cover the following topics:
- What is retail loss prevention?
- Key risk factors and relevant statistics
- Conducting regular audits and inventory checks
- 13 key loss prevention strategies
What is retail loss prevention?
Retail loss prevention is the practice of reducing or eliminating the loss of inventory, cash, or assets due to theft, fraud, error, or damage. It is vital for retailers to safeguard their profitability, competitiveness, and reputation in the market.
Key risk factors
Retailers face a multitude of risks and threats originating from internal as well as external sources. This makes it a challenging task to effectively mitigate stock shrinkage. The main risk factors include:
- Opportunist shoplifting
- Premeditated and organised crime gangs
- Employee theft
- Supplier fraud
- Theft of goods in transit from the warehouse or on delivery to the customer
Key facts
- According to a report by the British Retail Consortium (BRC), the total cost of retail crime in the UK amounted to £2.2 billion in 2019, a rise from £1.9 billion in 2018
- October 2023. A report in the Financial Times stated that ” UK retailers including Burberry, John Lewis, and Marks & Spencer, have called on the Home Secretary to take urgent action to curb a nationwide surge in shoplifting and accompanying abuse of store staff.”
- Employee theft accounted for 22% of retail shrinkage in the UK (the discrepancy between the recorded stock value and the actual stock)
The infographic (courtesy of The British Retail Consortium) features more up-to-date figures showing a reduction in retail crime. Experts agree that this does not reflect the underlying trend when taking pandemic lockdowns into account.
13 Essential Retail Loss Prevention Strategies
In this section, we will outline some of the main retail loss prevention strategies that we often recommend to our clients, including:
- Installing and maintaining security systems and devices, including CCTV, alarms, sensors, and tags
- Best practices for training and educating staff on security awareness and procedures
- Implementing effective access control and identification systems
- Developing and enforcing clear policies and protocols for handling cash, merchandise, returns, refunds, discounts, and vouchers
- Collaborating and communicating with suppliers, customers, law enforcement agencies, and industry associations
Retailers can cultivate a secure shopping environment for customers by implementing the following retail loss prevention strategies:
1. Store Layout:
An organised store layout with wide, unobstructed aisles augments customer safety by allowing staff and security personnel to navigate the shop effortlessly and facilitates more effective surveillance of customer activity.
Ideally, all areas of the store should be visible from the primary and secondary sales desks. Use lowered stock display racks and raised sales desk areas to provide a clear visual field for store employees and security staff
Cluttered stores tend to experience higher degrees of loss, so manage your displays effectively and tidily to reduce risks.
Expensive stock should be kept close to, or behind the till to reduce the risk of opportunistic theft. Low-value items near the entrance to your store are much less likely to be stolen, as the reward factor is significantly lower.
Position your customer service desk close to the entrance of the shop. This means that customers returning faulty or unwanted products are not incentivised to wander the store without first having their issue dealt with.
2. Prominent Security Measures:
Retailers should ensure the conspicuous display of security measures, such as CCTV cameras, alarms, and noticeable surveillance signage, throughout their stores. The presence of visible security equipment acts as a deterrent to potential wrongdoers and reassures customers that their safety is a paramount concern.
3. Secured Entrances and Exits
Implementing access control measures at entrances and exits assists in preventing unauthorised access and can discourage theft. Measures such as security personnel, electronic locks, or anti-theft alarms can effectively safeguard the integrity of entry and exit points. To lower the risk of trespass and keep track of who has accessed the area, all staff-only areas should have a secure entry system.
4. Well-Illuminated Premises:
Adequate lighting is crucial to establishing a safe shopping environment. Retailers should ensure that all areas of their stores, including car parking, entrances, and aisles, are well-lit to minimise hiding spots and enhance visibility. Regular maintenance and prompt replacement of malfunctioning lights should also be prioritised.
5. Customer Awareness Programmes:
Retailers can educate customers about store security measures and encourage them to remain vigilant. This can be achieved through in-store signage, announcements, or online platforms. Promoting a culture of awareness and urging customers to promptly report any suspicious activity can help prevent theft without requiring a significant financial investment
6. Collaboration with Policing Services:
For retailers, forging strong relationships with local authorities and police services can provide additional support in maintaining a secure shopping environment. Retailers can share information, promptly report incidents, and collaborate with law enforcement to effectively address security concerns.
Information sharing with regard to the activities of organised shoplifting gangs or known criminals protects the local retail community as a whole.
7. Continuous Staff Training and Development:
Ongoing training and development programmes for employees are imperative to keep them abreast of the latest security measures and best practises. Regular training sessions reinforce security protocols, educate employees about emerging threats, and ensure they are equipped to handle security-related situations with confidence.
Retailers should employ well-trained and attentive staff members who are both visible and accessible to customers. Employees should receive comprehensive training in customer service techniques and possess a sound understanding of store security protocols. Their presence not only offers assistance to customers but also acts as a deterrent to potential criminals.
8. Periodic Stock Taking
Periodic stocktakes offer several security benefits for retailers. Firstly, regular stocktakes provide an opportunity to detect and deter internal theft. By conducting thorough inventory checks, discrepancies between recorded stock levels and actual stock can be identified, allowing for the early detection of potential employee theft.
Additionally, stock takes help to uncover any errors or discrepancies in stock management systems, preventing losses due to administrative mistakes and uncovering supplier fraud where it exists.
9. Establish Formal Warehousing Protocols
Taking a systematic approach to inventory management by checking in and tracking goods from the moment they arrive at the warehouse until they are sold helps prevent inventory discrepancies and reduces the risk of theft or loss.
Your warehousing protocols should include strict access control measures. By limiting access to authorised personnel only, the chances of unauthorised individuals gaining entry to the warehouse and pilfering valuable merchandise are greatly reduced. Implementing secure entry points, such as electronic locks or key card systems, adds an additional layer of protection.
Adopting comprehensive inventory control systems using technologies like barcoding and RFID tagging, ensures that retailers can accurately and efficiently monitor the movement of goods within the warehouse and through the point of sale. This not only assists in preventing employee theft but also helps to identify any missing or misplaced items in a timely manner.
10. Cash Handling
Although the use of and theft of cash from retail stores is low, you should reduce the risk of becoming a target by minimising the amount of cash kept in till systems and in the shop throughout the day. Schedule cash collection or bank deposits whenever cash reaches a predetermined threshold and ensure the business has a high-quality safe and security system. Under no circumstances should cash be kept in tills overnight.
11. Stock Security
Protecting your stock offers an additional layer of security. There are numerous options here with varying degrees of cost that can drastically reduce shoplifting and theft risks.
- Locked Cabinets should be used for high-value items such as jewellery or electronics
- Dummy displays can be used to showcase expensive product packaging, while the products themselves are kept in secure areas
- EAS (Electronic Article Surveillance) tags can be used to protect individual products, as these can only be removed at the till system without damaging the product
- Shopping cart locking systems can prevent push-out theft. They will lock shopping trolleys when a customer attempts to leave the store and avoid going through the checkout area
- Security sensor gates provide a highly effective deterrent that discourages casual theft.
12. Use of CCTV
CCTV provides an effective, visible deterrent. CCTV installation and monitoring need to effectively cover the following:
- CCTV should cover all areas of the store, including staff and warehousing areas
- CCTV should be highly visible
- Staff should be trained in the use of CCTV and CCTV monitors should be available in the office or behind the till systems to allow staff to manage potential risks effectively
- Signage should be placed in clearly visible locations, including at the entrance to the store, notifying customers of the use of CCTV
13. Use of Security Guards
Security guards provide a highly effective and highly visible shoplifting deterrent and reduce additional staff risks, including assault and anti-social behaviour. Security guards can be clearly uniformed and identified at the front of the store, or, as explained in our recent blog post, they can be less obtrusive and mingle with customers for a more covert approach.
The benefits of security guards are:
- Low-cost solutions in high-risk areas
- Provide additional concierge services to customers
- Able to monitor and respond to all types of emergecies
- Are fully trained to deal with shoplifters and interact with police forces
- Provide A highly effective deterrent for opportunistic shoplifting
Do you need some professional retail security assistance?
Designing a holistic strategy for your retail store is vital to retail loss prevention, and in the first instance, you should focus on security measures that are cost-effective and affordable for your business.
At Titan Security, we can help you by providing free security risk analysis services and backing them up with a full range of retail security and security management services. We supply retail security guards, CCTV installation and monitoring services, and security alarm response throughout the UK and across Europe to help your business increase profits by cutting all types of retail losses.
If you would like a free retail security assessment and some useful advice, why not call our experts for a friendly chat without further obligation?
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