What is loss prevention?
Retail Loss Prevention definition is a set of good practices which helps retail business to protect their assets and profit. Loss prevention synonym can be asset protection.
A number of losses in the retail sector every year are growing. More or less we can calculate about $100 billion annual loss worldwide in the retail industry. Starting from shoplifting, employee or customers theft this is a huge issue.
In different sectors the loss percentage is variating. In some supermarkets, it can be 1.5% of annual sales. While in the fashion industry it can be even 2.5%. In contrast that is why we may see so many improvements in loss prevention strategies by implementing new security systems like different kind of tags, cameras, sensors, etc. Seems like, as same as a growing number of loss prevention jobs. Here is a good indicator of security needs for retailers.
What is the role of loss prevention?
In most cases an officer who is working in retail security, business will have this kind fancy name – a loss prevention officer. A loss prevention officer helps retail shops by protecting it from vandalism acts or theft actions. Asset protection specialist main duties:
- Monitoring place surrounding in a specific time (shift time)
- Analyzation and identification processes of staff or customers to be transparent that no one is trying to do any harm form retail property
- Regular inventory review and employee’s investigation
- Documenting all suspicious activities
- Collaborating with a local police station
- Contributing to creating a better company security policy
Is Loss Prevention allowed to touch you?Many stores have their policy, but in most cases a Loss Prevention Officer at first if he/she have any suspicions must talk with a suspicious person. Those officers are not police officers and cannot use any violence unless it is an extreme situation and theft is creating a desperate situation for others.
The most popular types of loss in the retail sector
The winner in this list is shoplifting. It takes 37% of all annual losses. (By www.nrf.com/ data.) It is quite popular not even between customers but also between employees when by hiding an item they go from the shop without paying for it.
It may seem like a little criminal activity, but in some cases, it can grow and become a vast criminal activity when a group of shoplifters may create an organized illegal move and may strike not even a single but regularly. In that case, they steal much more and many expensive items.
It can be a significant issue for some smaller shops that is why it is essential to be ready for those kinds of acts. Here are a few very active options:
- Trained customer service. Explain to your staff that it is important to greet and communicate with customers. By offering help as they look around may destroy any shoplifter plans to hide store items.
- Consider having an excellent lighting system in all store places.
- The monitoring system is a must. Most of the surveillance cameras may identify criminal activity much faster before any other significant criminal activity would have happened. New technology is already existing, when a surveillance camera may determine a face from the past and do not let it in the shops.
Have you ever returned an item which was not good for you and asked for a money return? Well at first it may seem like a simple and excellent shop policy, but there are some returns which increase business losses dramatically:
- Returning different item which person stole from another place
- Giving back old/used items
- Returning stolen items
- Giving back items which person bought with counterfeit money
It is much harder to fight against this loss activities comparing with shoplifters. Strategy how to fight against those frauds is usually to require ID identification, receipts of purchases and also well-trained stuff here may see a fraud situation.
This issue is widespread between all types of retailers. Due to small wages and temptation to become wealthy – employee may become theft. 30% of all retail losses comes from this field.
- Skimming off some caches in small amounts regularly.
- Ignore to scan friends/family or other theft items
- Creating fake returns and cashing out some money
To protect your business from those kinds of losses, you must track your employee with security cameras or even by checking their bags after the work shift. But this can bring a bad atmosphere to all your work team. It is much better to start the right training from the beginning after pieces of training employee may get a special certificate and later try to stand as a candidate to get (Certified Forensic Interviewer) CFI jobs.
By creating a friendly culture, work atmosphere and giving employees, some bonus may create a healthy and much more devoted team as you may think.
In this age when we have computers and so many different and great software, we still have a massive problem in this area. 21.3% of annual shrinkage or paper shrink. Small mistakes in accounting and other paperwork creates a huge loss.
- Employee loss prevention training is a must and retraining is as well
- Monitoring and inventory management systems.
Organized retail crime
What is ORC theft?
Organized retail crime theft is a criminal activity usually of a group of criminals. Stealing, vandalizing and other illegal actions are one of the main parts of this theft.
Operations of ORC may have different types of criminal
activities. From simple to extremely complex by involving fencing operations,
employees or business owners or even illegal wholesale operations.
Members in most of this kind of teams are well trained. Some even are working in the target shops. This aspect creates a unique benefit to criminals to complete their criminal activity without any notice at least at the beginning of their actions.
With the latest technologies’ criminal organisations increased their scope so dramatically that they may steal so much that businesses even go bankrupt.
From history, we all know how gangs have moved from one place to another. Due to it is easy and safe to steal a massive quantity of products and later resell it in the black-market to gain profit. At this time criminals have a new way to steal without even going anywhere from their houses. Organized criminal hackers can make much more significant losses just by taking control of retailers’ bank accounts or by taking account management systems. To detect those criminal acts are extremely hard, that is why retailers are searching not only physical security solutions but also a digital one too.
Recognising the exact criminal target point
Their specifications categorize all targets. Products diversification between stores creates target types. For example a store which sells drugs and store which sales candies probably will have a different evaluation. Criminals by taking the risk for their actions most of the time want to have the most significant financial return, and this leads to target a business which has the most valuable goods. Some key characteristics of the products:
- The item is easy to hide
- The thing is easily concealed to avoid any attention of detections
- The product is expensive enough and has a demand
- The product has unique features as a result it will have significant benefits to sell it later
Based on this list, shop retailer may consider which goods are the primary targets if criminals will take action. In this case business owner may take additional security actions to protect those goods.
Is organized retail theft a felony?
It depends on which country it was done. In most of the cases, it depends on the value of the stolen property.
Would you like to fight organized retail crime like a pro?
StopORC and is a non-profit industry organization that combats organized retail crime with loss prevention associates. Through information sharing, education, and advocacy and
Founded by our CEO, Adel Sayegh, StopORC is best known for its free monthly webinars, which are open to all LP professionals and cover the latest strategies for discovering and preventing retail theft.