Stop waste and inventory shrinkage at your business with these effective loss prevention strategies
When most people think of loss prevention they probably imagine a security guard by the door, or perhaps a pair of EAS gates ready to detect the security tag on the jacket someone’s tried to sneak out of the store in their backpack. While these loss prevention examples do play an important role in store security, there’s more to keeping your inventory safe than catching thieves on their way out. Accidental or intentional damage of items by employees, operational errors and fraud can all lead to inventory shrinkage large enough to take a bite out of your bottom line.
This list of loss prevention techniques can help you develop a comprehensive strategy for covering all the areas in your business where inventory loss can occur. But first, let’s talk a bit about what is (and isn’t) considered loss prevention.
Defining loss prevention
Loss prevention is a combination of strategies and tools used to stop waste and loss of inventory at a business. That can include preventing any number of incidents and accidents, including shoplifting, employee theft, vandalism and mishandling of goods.
The goals of loss prevention strategies are two-fold: to help you protect your profits from unnecessary expenses and help you make the most money from the inventory you have in stock. In other words, if you’re maximizing sales of your inventory because it’s sitting on the shelves, instead of in a shoplifter’s purse, you may boost your profits both because the item has a higher chance of being sold and because you don’t have to spend money on replacing it.
Here are some effective prevention strategies to help you get started.
7 loss prevention examples
In-store security patrol
A security officer on premises is still one of the most popular loss prevention strategies available to retailers. Security officers can cover a lot of ground in larger stores and can regularly check in on areas that are not monitored by CCTV cameras; businesses at high risk for vandalism or theft may need immediate prevention and intervention services that only a trained security officer can provide. Having security officers with body-worn cameras is especially important in areas with high theft risk or at high-theft-risk businesses (banks, jewelry stores), because having access to footage from body-worn cameras can supply law enforcement with valuable information and lead to quicker incident resolutions.
Live remote monitoring
A security agency or an employee of your company can keep an eye on key areas of your store through a combination of security cameras and body-worn cameras (if in-store guards are present), note suspicious activity and report it right away. With the right diligence, you should be able to recover stolen merchandise or apprehend a vandal before they reach the doors. Live remote monitoring works best combined with classic loss prevention techniques like EAS gates and security tags on valuable goods, which can help you pinpoint a would-be shoplifter.
Loss through theft is a constant concern for retailers. To create the best loss prevention strategies, you need to understand the big picture – read Axon’s Retail Crime Report for 2023 for an overview of trends in retail crime and more loss prevention examples.
Retail Crime Report
Great customer service
Train employees to use their customer service skills as a loss prevention tool. A friendly “Hello, how can I help you?” is music to the ears of a legitimate customer, but a deterrent for someone with criminal designs. Ask employees to engage with customers they encounter on the floor, assuming good intentions while also cultivating awareness of who is wandering in the aisles at any given moment. It’s important to note that bias training can be incredibly helpful to your team before they leverage customer service as a loss prevention tool.
Clear policies on merchandise handling
Not all loss results from criminal activity. Sometimes loss is created through mistakes when inventory is not processed properly. For example, an employee may choose to throw out a returned item when it should have been marked down and returned to the floor. Identify places where confusion can arise and get ahead of it with clear policies about how to handle inventory.
Unfortunately, employee theft is also a common problem in the retail industry. A report from the National Retail Federation found that the average retailer lost $1,551.66 per case of dishonest employee in 2020. Create a clear structure for reporting employee theft and make sure employees understand what the definition of employee theft is and any consequences.
Optimized store layout
Your high-ticket items should be highly visible and monitored by employees – think glass counters with jewelry and expensive watches in the center of department stores – or they should come with security tags that cannot be removed except by an employee at the cash register. Similarly, you may also limit access to some items by putting them in locking cases.
Thinking carefully about how your merchandise is laid out won’t stop a determined shoplifter in and of itself, but it can make other loss prevention examples on this list (like live monitoring) easier to implement.
A data management platform that can help you track patterns
Data management platforms can help you figure out what types of loss incidents take place at your stores, by letting you store and analyze data from incidents captured on camera or via witness testimonies. For instance, Axon Incident Manager, a cloud-based data management platform, provides automated video ingestion, such as footage from body-worn cameras and auto-tagging, making it easy to find and track incidents that happen repeatedly at the same location.
Axon Incident Manager also offers an auto-redaction tool that detects and blurs bystander faces and other sensitive information to protect your customers’ privacy. You can easily share data about incidents with other store managers, making it harder for organized criminals or an employee theft ring to carry on undetected.
A modern incident management platform
The loss prevention strategy examples above can help you reduce the amount of inventory lost, but they are not likely to eliminate shrink entirely. At some point, you will likely run into a situation with a shoplifter or a problematic employee. That’s when having an incident management platform may help your team analyze what happened, document all evidence, pass it on to law enforcement and take steps to make sure this incident is less likely to happen again. A comprehensive platform, like Axon Incident Manager, can securely store all data about any given incident in one place where it can be easily found by authorized users.
No single loss prevention strategy is a silver bullet for inventory shrinkage, but finding a combination of strategies that makes the most sense for your business can help you significantly reduce loss and perhaps even boost profits. If you’d like to learn more about Axon’s suite of solutions for loss prevention, reach out to our team.