Retail shrinkage cost retailers nearly $100 billion globally in 2019. In the U.S. specifically, it accounted for 1.85% of sales lost – approximately $42 billion.
For retailers in the accessory and fashion industries, the loss was steeper, with retail shrinkage accounting or over 2.4% of sales.
While these losses can be attributed to a number of issues, including administrative error and vendor fraud, the majority can be pinned to shoplifting, including more organized retail crime, and employee theft.
Shoplifting accounts for over 35% and employee theft for over 30% of retail shrinkage annually. Though these numbers are disconcerting, the bright side is that many steps can be taken to decrease them.
Implementing security systems and surveillance measures can go a long way in decreasing the most significant causes for retail shrinkage – shoplifting and employee theft.
Following are the top 4 tips for preventing retail loss in your store:
- Introduce Surveillance Measures
A tried and true method for decreasing theft and criminal activity is surveillance. Most shoplifters and thieves are opportunists – if they don’t believe they can get away with it, they won’t attempt it. When people know, or at least believe, they are being watched; they are far less likely to steal.
Fortunately, there are many ways you can accomplish this in your store/facility:
Surveillance Cameras: the most obvious solution is the application of conspicuous surveillance cameras. You should place cameras throughout the store, including at entrances, POS terminals, stock areas, and loading and delivery areas.
Making the cameras visible reminds thieves, customers, and employees that they are being watched and can be easily identified, decreasing the likelihood that they take anything in the first place.
The mere presence of the cameras do a lot of the work, so even a simple system can do the job for those with a smaller budget. However, some systems can help provide even better surveillance, such as ones that enable you to analyze foot traffic and customer flow, or that provide facial recognition, which can help you further strategize and improve loss prevention.
Signage: besides having surveillance cameras, using signage both in customer and employee areas notifying them with strong language that they are being monitored goes a long way in deterring theft.
- Store Organization: other steps to increase surveillance that require no cost to you is ensuring your store is organized in a way that enhances sightlines.
Keep displays short so that your employees can see over them and have a clear view of the whole floor and location of all customers. Keep commonly stolen items away from the exits and closer to employees’ line of sight. Utilize mirrors in the corner of the stores to help further increase lines of sight for your employees.
Simply improving your employees’ ability to keep an eye on everything, and everyone within the store will remove any sense of opportunity a potential thief may feel and thus discourage theft.
Use Intrusion Detection Systems
Another key way to help decrease retail shrinkage is through intrusion detection security systems, which help secure your premises from both external and internal threats.
They can detect and notify you and the authorities of break-ins through elements such as glass-break detectors and perimeter protection. Through the use of occupancy sensors, motion detectors, and other transmitters, they can alert you to unauthorized activity within restricted areas of your facility, such as in storerooms or warehouses.
Intrusion detection systems also include elements like panic buttons that help increase your employees’ safety by giving them discreet ways of notifying the authorities when there is a burglary or threat in progress during work hours.
Being notified of unauthorized activity the moment it happens will help by providing speedy intervention when criminal activity is in progress, faster recovery of lost items, and a strong deterrent to employees and those aware of the system.
Access Control Systems
An access control system allows you to limit who has access to areas and materials and puts limits on that capability. It also enables you to monitor access activity.
Access control systems have credentials, scanners/credential readers, hardware such as access panels and electronic doors locks, and the software which allows you to set your desired restrictions, etc. They include systems that use keycode entries, key fobs, facial or voice recognition, and can provide additional restrictions.
Using access control systems for areas that ought to be employee-only and/or for areas that require more stringent security will function to decrease loss both from external (customers and criminals) and internal (employees) sources.
Access control systems will prevent the average outsider from gaining entry to areas they ought not. And, since the credentials are harder to steal than a key, utilizing an access control system rather than just locks and keys is the more secure way to go. Doors and pathways to offices, employee-areas, storage, and warehouses all can be protected with one of these systems.
Besides efficiently keeping outsiders from off-limits areas, access control systems also restrict which employees can access materials and when, and also helps monitor that activity. This more easily ties loss to employee’s identity, thus discouraging them from taking advantage of their privileges.
Furthermore, should an employee be terminated or quit, you can easily remove access privileges from their credentials, even if they neglect to turn them in. This is much easier to do than having to change locks every time you let go of an employee.
Having stock rooms, cash tills, and other resources more effectively secured by access control systems will ensure a decrease in loss from both external and internal loss.
Make Your Security Measures KnownAs already stated, most thieves are opportunists. A surprising number of regular customers and employees may turn to theft if they believe they can get away with it, and most habitual thieves will only proceed if they think they can do it free of consequences.
That is why the final tip to decrease retail shrinkage is to make your security measures known. Let your surveillance cameras be clearly visible, place signage throughout the store, and employee areas notifying every one of your security measures, such as surveillance and intrusion detection, and your willingness to prosecute.
Merely knowing that you take the security of your merchandise and money seriously and that you and your employees are watching will cut down significantly on your retail loss.
Does your storefront or business need better security measures to cut down on retail shrinkage?
The experts at Koorsen Fire & Security have been in the business for over 70 years and can help you select and implement the best security tactics for your business. Give them a call today to learn more and get started.