Understanding Loss Prevention In The Retail Industry

When you're busying running and managing a retail store or business, it's easy to overlook the importance of loss prevention. The fact is, however, that loss prevention directly affects companies' profits. Allowing your products to become damaged, stolen or otherwise “lost,” will only cut into your company's profits, which is why this issue must be addressed. In this post, we're going to cover the basics of retail loss prevention, revealing some important tips on how to maximize your store's profits.

Theft

One of the single biggest factors of product loss in retail stores is from theft. According to some statistics, theft costs retail businesses in the U.S. a mind-boggling $30 billion each year. It's not something most store owners want to think about, but theft is a real problem that can easily turn a profitable business upside down.

The good news is that store owners can take some simple steps to discourage theft, such as installing a video security system. Just the sight of video cameras mounted on the ceiling is enough to dissuade many potential thieves. And if someone does in fact shoplift a product, you'll have their face caught on camera.

Another step in preventing retail theft is to hire trustworthy employees. It's not always the store's customers who are doing the shoplifting – in some cases, it's the employees. Rather than hiring the first candidates who submit an application, perform a thorough interview and really analyze the candidate to ensure they are fit for your store. Make sure they are dedicated, dependable, professional and most importantly trustworthy.

Employee Training

Investing some of your resources into employee training programs will naturally encourage better loss prevention in your retail store. This is especially true for businesses which deal with food and other perishable goods. Employees need to be trained to safely and effectively move these products without damaging them. If a roll of bread falls behind a shelf where it's left for several weeks, it will likely be counted as 'shrink' and thrown away. Train your employees to carefully move product to reduce the chance of damage.

Unfortunately, there's no way to completely prevent damaged and/or stolen products in a retail store. If you've been in the business for any length of time, you are probably well aware of just how commonplace 'shrink' items are. With that said, store owners can follow the steps listed here to significantly lower their shrink. Focusing on loss prevention in your retail store will improve your productivity while increasing profits.