The retail industry loses billions of dollars every year to shoplifting and employee theft. In fact, it’s estimated that shrinkage (the industry term for theft and loss) accounts for 2% of all retail sales. That may not sound like much, but it adds up to a lot of money when you consider that the total value of retail sales in the United States was $6.6 trillion in 2021.
To make matters worse, according to the National Retail Security Survey for 2021, COVID-19 continues to have an impact on the risk landscape, organized retail crime is a growing threat, and violent incidents are also increasing. Loss prevention and asset protection professionals have taken steps to address these changes.
Some common shoplifting prevention strategies include increased technology resources, installing security cameras, using security mirrors, placing items in locked cases, and using anti-theft tags or RFID tags. Employees can also be trained to be on the lookout for suspicious behavior.
There are a number of things that retailers can do to prevent employee theft as well. Background checks should be conducted on all employees, and employees should be made aware of the consequences of stealing from the company. Additionally, stores can implement policies such as requiring employees to leave their bags and personal belongings at the door or having a manager sign off on all transactions.
While it’s impossible to completely eliminate these types of losses, there are strategies that retailers can use to help prevent them.
Tips to Prevent Shoplifting
Loss prevention experts agree that one of the most important ways to prevent shoplifting is to have well-trained and alert employees who know how to spot a potential shoplifter. Employees need to be on the lookout for customers who:
- Avoid eye contact
- Are acting nervous or paranoid
- Are loitering in the store without appearing to be shopping
- Leave the store and returns repeatedly
- Linger in a location where employees have a hard time monitoring
- Constantly keep an eye on store employees and other customers
- Are concealing merchandise in their clothing or bags
- Are quickly moving around the store and going in and out of fitting rooms
- Are attempting to distract employees or other customers
If an employee sees a customer exhibiting any of these behaviors, they should be alert and watch them closely. If the customer does attempt to steal something, the employee can then take appropriate action, such as calling security.
Training employees to recognize potential shoplifters is an important step in preventing theft in stores. By being alert and paying attention to customers’ behavior, employees can help to deter shoplifting and keep stores safe.
To prevent shoplifting, it is important to be aware of potential shoplifters and take measures to deter them, such as:
- Stay alert at all times.
- Greet all customers.
- Ask lingering customers if they need help.
- Know where shoplifting is most likely to occur in the location.
- Use a log to share suspicions about shoplifters among employees.
- Display signs that “Shoplifters will be prosecuted.”
How to Handle Suspected Shoplifters
When shoplifting is suspected, it’s crucial for your employees to know how to handle incidents. The Los Angeles Police Department recommends that retail employees take the following steps:
1. Never directly accuse anyone of stealing. Give the person a chance to pay for the item they “forgot” to pay for by asking, “Are you ready to pay for that?” or “Can I ring you up?”
2. Observe the person carefully and try to remember as many details about them as possible, including their physical appearance, clothing, and any bag or tool they may be carrying.
3. If possible, discreetly take a photo of the person with your phone or another camera.
4. Do not confront the suspected shoplifter yourself – instead, call security or the police and let them handle the situation.
5. Give the authorities as much information as possible about the incident, including any photos you may have taken.
By following these steps, you can help ensure that suspected shoplifters are caught and prosecuted and that your store does not become a target for future theft.
Strategies to Reduce Employee Theft
Some experts say that employee theft is a bigger threat to specialty retailers’ bottom lines than shoplifting. The best defense against this is said to be a watchful eye. Try implementing the following strategies:
Stop by your store without warning. Make sure to do unannounced visits to your stores from time to time to check up on things. This will help you catch any potential problems early on.
Spot-check inventory/POS drawer. Unannounced visits to spot-check inventory and drawers help keep employees on their toes and let them know that management is always keeping an eye on things. By randomly picking a few products to check the physical inventory against inventory sheets or reports from the POS system, it will be difficult for anyone to get away with anything. And by announcing that you’ll be back soon to do it again, it’ll help create a culture of always being prepared.
Have an inventory-tracking system. It is important to have a system in place to keep track of inventory levels. This can be done using a POS system that automatically tracks inventory or, at a minimum, by using paper-based inventory-tracking sheets. This will let employees know that inventory is being monitored and help to keep track of levels.
Check the z-tape. If the z-tape numbers from yesterday and today are not sequential, something may have happened to the tapes in between. Check to see what the missing numbers are.
Train employees. Offer training to employees on how to prevent theft, both shoplifting, and employee theft. Discuss the ways the company is prepared to detect either.
Encourage anonymous tips. If employees know that their co-workers are watching and could report them they will be less likely to steal products or cash. Publishing a phone number where employees can leave an anonymous message will help discourage stealing in the workplace.
Watch for employees with calculators and receipt books. When looking for signs of employee theft, one thing to watch for is employees who have calculators or receipt books with them. According to many retailers, this is often a tell-tale sign that something may be wrong. Employees who keep a calculator next to the cash register, or who have a separate receipt book hidden away, may be more likely to be stealing from the business.
Check deposits. Make sure that deposits are being made regularly and as expected. If there is a sudden change, such as deposits being made every other day instead of every day, find out the reason why.
Check cash-to-credit purchase ratios. If the typical purchase ratio is 30 percent cash to 70 percent credit, and then suddenly the ratio is 10 to 90, it’s time to investigate why this change has occurred. This could be indicative of fraudulent activity.
Watch the “no-sales.” If you notice that an employee has a higher number of “no sales” than other employees, it may be an indicator of theft.
There are a few things you can do to help prevent shoplifting and employee theft. First, make sure customers and employees are aware that you’re closely monitoring your business. This will help deter potential thieves. You should also take steps to secure your merchandise and keep track of inventory. By taking these precautions, you can help reduce shrinkage and keep your business running smoothly at all times.