A Guide to Preventing Retail Theft & Loss

A Guide to Preventing Retail Theft & Loss

No matter how big or small your retail business is, maximizing profit margins is a challenge. You have to weather slow months, keep your retail stock fresh and make sure your prices are competitive while still allowing you to turn a profit.

Unfortunately, there is also one challenge that can drive any retail business owner crazy: retail theft.


Consider these statistics. According to Business Insider, retailers in the United States lose a total of $45 billion annually. This makes up the lion’s share of the $60 billion lost due to retail shrinkage.

In other words, even if your products are perfectly priced, and your customers are loyal, losses from retail theft can cripple your business.

Thankfully, while theft may feel like it’s out of your control, there are retail loss prevention techniques available to help you avoid letting valuable merchandise walk out the door.

That’s why we’re putting together this collection of our favorite retail theft prevention tips. They range from proactive hiring practices to investment in retail loss prevention systems. Some require just a small change in perspective, while others might mean making larger systemic changes to the way you do business.

Regardless, if you have been thinking about how to prevent shoplifting in retail stores, these retail loss prevention tips are a great place to start.


1. Start With Great Employees

There are two reasons to start your approach to retail loss prevention with proactive hiring practices. First, the majority of retail theft doesn’t come at the hands of customers — it is perpetrated by employees. In fact, 35% of retail shrinkage is caused by employee theft.

There are a number of ways employees contribute to retail shrinkage. Many times, employees will feel pressure to give “sweetheart deals” to family and friends. Even the most honest employee can cave under the influence of a close friend or family member looking to take advantage of a friend’s generosity.

Other employees might regularly steal items they feel won’t be missed. This could be anything from a pack of gum to a pair of socks. In their mind, they are just taking advantage of a harmless perk of being an employee. They might not even realize how much damage they are doing to your business’ bottom line.

And, unfortunately, others may feel little loyalty to you and your company. They don’t feel any guilt when pocketing merchandise, either for themselves or for resale elsewhere. Every business will at some point have to deal with a disgruntled employee who does not take pride in their work, especially if they are in an entry-level job or only looking to be a part of your team temporarily while they look for work elsewhere.


Great employees, though, are also your best line of defense when trying to prevent theft in a retail store. A well-trained, loyal employee will not only be able to spot suspicious behavior, but they will also feel a sense of responsibility in stopping it when they do see it.

Furthermore, retail loss prevention experts have noted that a friendly employee who makes eye contact with a customer greatly reduces the chances that the customer will shoplift. Establishing a personal connection could make the customer feel guiltier at the prospect of stealing. A smiling face is a surprisingly good theft deterrent.

But how do you ensure you have a loyal and dedicated team? You start by incorporating loss prevention in your hiring practices. You’d be surprised how easy it is to spot a loyal potential employee and conversely, a disloyal one during the interview process. You may also engage a staff monitoring service. It’s like security to watch your employees.

However, loyalty also isn’t something you can take for granted. Engaged and respectful management is equally essential for maintaining great employees. If an employee feels constantly disrespected and under-appreciated, it is unlikely they’ll be motivated to help you stop retail theft.

So, make sure you take a positive leadership position on both sides of the hiring process.


2. Keep a Close Eye on Suppliers

In a perfect world, no one would try to rip you off, but retail loss can occur even before the merchandise is stocked on the shelves.

Up to 27% of retail theft can be attributed to dishonest suppliers and contractors. Whether they short you on the merchandise they are expected to deliver, overcharge you for the merchandise they do supply or pad their invoices with hidden and dishonest fees, it is important to keep a close eye on your suppliers.


This is especially true if you are a small business, as retail shops that rely on less formal, and, therefore, less organized, supply chains are especially susceptible. You may want to consider a loss prevention service to help you keep an eye on your suppliers and others who have access to your warehouse, storeroom and sales floor. Securing your merchandise while it is in your possession, regardless of where it is kept, is a good idea. Hiring security guards to patrol your warehouse when you cannot be there may be the best solution for your situation.

While it may mean extra work for you and it may frustrate a supplier who wants to keep transactions “simple,” it is important that every supplier and contractor relationship is accompanied by proper paperwork. Make sure you are checking your incoming inventory against the detailed invoices your supplier provides as well.


3. Invest in an Inventory Management System

To spot retail loss, you need an inventory management system that will allow you to track when things are missing.

However, simply buying an inventory management system won’t solve your problems. You need to effectively train your employees to use it. That way, your manual stock counts will correspond with your system’s. You will also need to invest in the time required to do a business-wide physical inventory count to reconcile your actual inventory with the new system. It is important to give yourself the time to do this thoroughly, as physical and recorded inventory discrepancies will severely limit the effectiveness of an inventory management system.

But know that this investment of time and labor is definitely worth it. The most effective way to track the small trickle of retail loss is to have good data collection!


4. Consider Your Floor Plan

You also want to physically arrange your store in a way that prevents shoplifting. By keeping sight lines open, you will greatly reduce the shoplifting impulse.

Shoplifting is often a crime of opportunity, and 73% of shoplifters do not plan to do it when they enter the store. It is only when given a chance that they decide to take something.

Obviously, rearranging the floor of your store requires a certain level of investment in both time and labor, but doing so can greatly reduce the temptation to steal. Start by opening up your floor plan. Make sure your big-ticket items are displayed in the most easily observed areas of your store and that your checkout area is by the door with clear sight lines from as much of the store as possible. This will ensure your employees can keep an eye on customers who are shopping while also performing checkout duties. Finally, keep the store consistently lit. A dark corner will give a potential shoplifter the feeling of being unseen, increasing the temptation to steal.


5. Make Sure You Have Proper Signage

We’ve all seen the signs that say “Shoplifters Will Be Prosecuted.” While these signs may seem obvious and unnecessary, they are actually pretty important. First, they are surprisingly effective as a deterrent. Again, because most shoplifters don’t enter a store with theft in mind, a silent reminder can go a long way in reminding a potential thief of the consequences.

But signs like this also protect you if you do have to take a shoplifter to court. You’d be surprised by the number of legal loopholes that shoplifters caught in the act can use to escape punishment. Having a sign closes one of them.


6. Incorporate Innovative Tech Solutions

While most of the anti-theft solutions discussed thus far have been decidedly “low-tech,” there are a number of innovative high-tech tools available for retail businesses of any size. Ranging from state-of-the-art video surveillance equipment to the latest retail theft prevention devices, these tech solutions have made collecting information, analyzing it and tracking merchandise that is leaving your store illegally easier than ever.


Here are just some of the best tech solutions currently available on the market:

Video Surveillance

Video surveillance has come a long way from the days of fixed cameras and tape recorders. Today’s video surveillance technology is designed to integrate with data collection and analytics software while also incorporating innovative technologies such as face recognition.

There are video surveillance tools designed to identify suspicious activity that might otherwise go unnoticed by employees. These systems are also more easily integrated with larger security systems, which will make it possible to catch coordinated shoplifting, especially if the shoplifter is working with an employee.

Additionally, the most recent video surveillance systems are much better at providing good, actionable evidence to authorities if a shoplifter is identified. This technology helps ensure shoplifters are punished for their crimes.


Electronic Article Surveillance (EAS)

Like video surveillance, EAS is not new. However, recent technological developments have greatly increased its effectiveness. This is especially important as shoplifters become more adept at circumventing traditional EAS systems. If you have a preexisting EAS system you fear is no longer effective, newer systems are designed to retrofit and update your existing hardware, helping you cut down on installation costs.

In addition to providing you with security by sounding alarms when unpurchased merchandise crosses the store threshold, the latest EAS technology can even track the quantity of purchased product that leaves the store, giving you another data set that can be used to further drive sales and improve your profit margins.

Furthermore, good EAS systems are also effective tools for human resources. By identifying peak hours for moving product, you can make sure you’re sufficiently staffed when needed, and not overstaffed when business is slower.


Big Data Analytics

The key technological innovation in theft deterrence is big data. By bringing all of your tools — whether it be video surveillance, EAS or even inventory management — into conversation with each other, you will be much better prepared to tackle the specific problems and gaps in your retail loss prevention system.

For example, through data analytics, you might identify certain peak times for shoplifting. If those times correspond with a particular employee’s shift, you may have a dishonest person on your team. However, if those times have to do with other outside factors — such as the time local high school students get out of school — you may want to take a more targeted approach to theft prevention during those times.


Either way, you don’t want any of your retail loss prevention systems to work alone. Instead, integrate them and use the data they collect to give you the edge in your battle against retail loss


Turn to CitiGlobal Security for the Latest Solutions

Now that you understand the importance of effective retail theft prevention, you will need a security partner that can guide you through the many technologies and solutions available.

Luckily, here at CitiGlobal, we are experts in security and loss prevention. We offer security services that are customizable to your retail needs.

We pride ourselves on recruiting former police officers and military veterans as members of our permanent team. Our experienced professionals are highly trained for security service and equipped with the latest technology to provide an integrated security system for your retail business.

CitiGlobal partners with our security clients to protect your merchandise and improve your bottom line. Our experienced management personnel will work with you to design a security plan that meets your needs. When you contract with CitiGlobal, you have 24-hour access to management personnel for help with any issues that arise. We are committed to using our expertise to keep your business safe and reduce inventory loss.

We use the data collected from various surveillance tools to customize a security approach for your business. Our team can adjust the security plan to meet changing needs or to address particular concerns. If someone is stealing products from your shelves, either in the storeroom or on your sales floor, we will figure out how they are doing it and put an end to the thefts.


Contact Us for Your Security Needs

Security is a touchy issue, especially when employees could be involved. You don’t want to believe anyone would steal from you. The experts at CitiGlobal are aware of the delicacy required in some situations, and we are trained to manage security effectively and discreetly when necessary.

As the business owner, you have to take a lead role in preventing loss and theft in your retail operation. CitiGlobal understands that loss prevention is not your field of expertise. We make loss prevention easy for you by bringing you the data you need to make the tough decisions. We work with our retail partners to help you understand the situation and guide you to the best solution to protect your bottom line.

The insights that CitiGlobal can provide you will keep your merchandise and employees safe. When you are ready to protect your retail business from theft, contact CitiGlobal to learn more about the services we provide and how we can become your partner in retail security.

Page Updated March 9, 2018

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