More than $112 billion was lost to retail shrinkage in a recent year, according to the National Retail Federation (NRF). Retail loss, or “shrinkage” as it is commonly called, is a severe problem in the United States. A retailer loses a certain amount of inventory due to damage, employee theft, and shoplifting. These losses affect your business’s bottom line and your livelihood. In a world where it pays to be an expert on loss prevention, here is a retailer’s guide to help you avoid financial losses.
Maintain Good Relations with Clients
Maintaining good relations with customers can help prevent retail theft. Be sure to greet all new customers as they come in to let them know you are present and ready to assist them. These actions serve a double purpose of ensuring visitors know they are being seen without feeling intimidated. Providing good service and personalized care for customers inspires a sense of loyalty. Repeat customers, or those who hold you in high esteem, can act as an extra pair of eyes, alerting your staff to suspicious activity.
Hire and Train Employees for Prevention
The NRF estimates that 30% of shrinkage is due to employee theft. You must vet employees thoroughly, performing a standard background check before hiring. Once onboarded, train your employees on best practices to prevent shoplifting by their fellow employees:
- Promote open communication. Ensure employees know they are encouraged to communicate and feel comfortable reporting suspicious behavior to a manager. Employees who feel valued and part of a team may be less likely to steal from their employer.
- Assign areas to specific personnel. By organizing your store into departments or sections, you can assign one employee responsible for customers and keep an eye out for shoplifters in their area.
- Review common shoplifting practices and how to spot them. Ensure each new employee is trained on the signs of potential shoplifting and aware of how to observe these signs in real life. Take time once a week or once a month for the team to rehearse what they would do if they suspect a client is shoplifting to handle it smoothly and safely.
- Establish cash handling systems. Rather than allowing many employees access to cash, work out a system for your employees to safely secure cash at the end of the day with multiple checkpoints to prevent collusion.
Organize Your Store for Comprehensive Visibility and Control
Store organization can play an essential role in preventing theft. Some ways to organize your store for comprehensive visibility and control include:
- Small items: Place smaller items near the cashier in the line of sight of employees ringing up.
- Pricier items: Put pricier retail items behind glass and require an employee to be present while potential buyers evaluate them. The employee should then return the merchandise to the glass case.
- Hidden corners: Install anti-theft mirrors so employees and managers can see all store areas.
- Shelving: Consider organizing your shelves and inventory so that the staff on duty can view the space more easily. Lower shelves allow customers to be observed at all times.
Monitor People and Inventory with Technology
Using technology to track and prevent retail theft can entail an initial investment, but it will likely pay off in time and money saved. Systems like closed-circuit TV, electronic tags called Electronic Article Surveillance (EAS), and integrated inventory and sales tracking systems can help you monitor the people and inventory on your premises.
Protect Your Investment with the Right Business Insurance Coverage
With the high risk of shrinkage, one of the most effective ways to safeguard your business is with business insurance specifically designed for retailers. Retail insurance can be tailored to cover a number of potential losses, including employee theft, fraud, and embezzlement. Not all insurance policies will cover shoplifting due to the difficulty of managing ever-changing inventory. Still, speaking with an experienced insurance agent will allow you to learn about the policy options that will help you protect your bottom line. Give us a call today to schedule a meeting. Our insurance agency is standing by to help you stay safe and stay in business.