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There are a lot of factors that go into retail management, and loss prevention is one of the most important aspects for every small business. This article has some tips to help you understand how to prevent losses in your store.
The “retail loss prevention policy example” is a document that outlines the policies and procedures for small businesses. This document will help in preventing retail theft.
Loss prevention in retail is a collection of best practices designed to limit the risk of goods theft and fraudulent returns. Each year, shoplifting costs US merchants $61.7 billion. Furthermore, retail losses are on the increase. Inventory decrease averaged 1.62 percent of sales in 2019, up from 1.38 percent in 2018, according to the National Retail Federation’s National Retail Security Survey, with the bulk of losses happening in-store.
As a result, retail loss prevention should be a top concern for business owners. Fortunately, there are a variety of rules and processes that company owners may use to eliminate avoidable losses and safeguard earnings.
What Is Retail Loss and How Does It Affect You?
Retail loss, often known as shrink, refers to a variety of situations that lead firms to lose money on a daily basis. Shoplifting, refund fraud, and staff theft are all examples of retail losses. It’s particularly harmful to merchants with slim profit margins. The first step in detecting shrinkage in your firm is to understand the reasons of retail loss.
To safeguard your company, use these retail loss prevention tips:
1. Set Up Your Store in a Way That Minimizes Shoplifting
Would-be burglars may be able to steal anything without being spotted by an employee or a surveillance camera if a business is disorganized. Reduce retail theft by arranging your business in such a manner that personnel can easily view customers. Create displays that aren’t too tall to peer over to ensure optimal visibility. Similarly, huge clusters of merchandise that prohibit personnel from keeping an eye on customers should be avoided.
Mirrors may also be strategically placed around your business. Mirrors may help personnel watch clients without hovering or being too pushy by reducing blind spots and making it simpler for them to monitor them without being too aggressive.
Finally, if you have higher-value products on hand, put them near the register—or wherever your employees spend time—and use lockable displays.
2. Spend time greeting and assisting customers.
Taking the time to welcome each client as they arrive will dissuade shoplifters since they will know you are paying attention to them.
The effectiveness of a store’s floor design against theft is only as good as its staff. Train colleagues to stay alert while on the sales floor to make the most of your store’s strategic structure. This entails welcoming each consumer as they enter the store, maintaining eye contact, and engaging in conversation with them. Many customers will enjoy the additional attention, and crooks will be less inclined to steal if they know someone is constantly monitoring the sales floor.
Download our free step-by-step guide to developing an effective shop layout for additional information on how your merchandising approach might affect loss prevention.
Checklist for Creating a Store Layout for Free
3. Teach your employees how to recognize suspicious behavior.
Most shops devote time to educating their personnel about items and sales techniques. It’s also crucial to train salespeople how to recognize suspicious conduct that might lead to theft. Keep a look out for red flags like the following:
- Picking up and replacing objects on a regular basis
- Taking a look around to determine whether they’re being watched
- Getting away from the workers
- Changing the price tags
- Changing the packaging of items
Establish processes for workers who see suspicious conduct or active shoplifting to protect your organization. Regularly teach team members on where duress buttons are located, how to manage the security alert, and if there are any safety words for communication.
4. Get a security system installed.
Find out what sort of interior monitoring devices ADT offers if you already have a security service like ADT protecting your shop. A security specialist can assist you identify the optimum locations for cameras and set up the monitoring equipment, which may be more costly than other solutions. Alternatively, SimpliSafe, a firm that allows you to set up a wireless security system for about $200 with optional monitoring, is a good alternative.
In addition to investing in storewide security measures, consider tagging products and installing an exit sensor system. These strategies can’t guard against fraudsters Changing the price tags or packaging, but they will likely deter would-be thieves and thwart any actual shoplifting attempts.
5. Make your security measures known.
To further prevent would-be burglars, draw attention to your security system.
Installing security cameras is a highly visible way to show your store takes theft seriously. Oftentimes, the mere presence of security equipment is enough to deter shoppers and employees from stealing or Changing the price tags. If you can’t afford actual cameras, consider installing fake equipment that gives the illusion of a comprehensive security system.
Signage warning about security cameras and the repercussions of stealing from your shop may help dissuade potential burglars. However, keep in mind that too much signage might turn off paying clients. Maintain a professional demeanor and determine what is suitable for your company and clients.
6. Use your point-of-sale system to keep track of inventory.
Inventory tracking issues may result in retail losses and make it more difficult to detect theft, fraud, and human mistake when they occur. As soon as your goods arrives at your business, use a POS system to maintain an exact count. A POS system like Lightspeed, for example, enables for mobile shop counts, allowing your personnel to count items without having to bring each item to the scanner. This facilitates tracking and decreases retail losses caused by human mistake.
A POS system may also assist personnel in detecting fraudulent returns and ensuring that consumers are following the store’s return policy. By comparing your POS system with what’s really in stock on a frequent basis, you’ll be able to spot recurring shoplifting difficulties.
7. Keep cash payments to a minimum.
Having a cash drawer in your company makes you a target for third-party criminals and workers. This is particularly true if your firm isn’t open 24 hours a day, which most aren’t. Reduce cash payments and encourage customers to use credit cards, digital wallets, and other more secure forms of money to completely eliminate this sort of retail loss.
This move may cause some customers to be inconvenienced at first, but it simplifies the checkout process for both employees and consumers. Change requires time and attention that may be better spent on enhancing the customer experience. Customers will also be unable to buy things with counterfeit money and return them for cash.
8. Require Receipts for Items Returned
Retail loss isn’t only when someone steals something from your business and doesn’t pay for it. Some individuals steal things and then return them for a refund, while others purchase things, utilize them, and then return them for a complete refund. Fraudsters who forge receipts and return products for payment may also be to blame for retail losses.
Consider taking the following procedures to avoid retail losses caused by returns:
- All returns should be accompanied by a receipt.
- Advertise and enforce a stringent return period—usually 30 days.
- Verify that the returned products are identical to those listed on the receipt.
- Customers should be required to disclose personal information when requesting refunds.
- Make your receipts stand out in a manner that makes counterfeits easier to see.
- Employees should be taught to spot the indicators of return fraud.
- Refunds should be sent to the original payment method rather than cash.
9. Take steps to keep employee-related losses to a minimum.
Employees may, unfortunately, cause retail loss, whether purposefully or unintentionally. Employees who are inexperienced or poorly trained may fail to keep proper inventory records and neglect to ring up goods in a customer’s cart. Even your finest salespeople might be victims of a fake return.
Employees who want to steal from your company may shoplift, make phony returns and pocket the money, or steal client credit card information and use it to make fraudulent transactions elsewhere. Friends and family members may have died as a result of these losses. Consider an employee who utilizes his discount to make purchases for a buddy or who fails to ring up all of his friend’s things at the register.
To reduce your store’s risk of employee-related losses, thoroughly assess all new recruits and, if feasible, seek professional references. Provide proper training to new associates to minimize unintended losses from shoplifters and coworkers. Employees may also benefit from an incentive scheme that compensates them for reducing retail loss.
Conclusion
Retail loss prevention is necessary to reduce the impacts of shrinkage on a business’ Conclusion. Because shrink—or retail loss—is such a common issue, there are a number of ways to deter shoplifting, reduce human error, and incentivize employees against stealing. Once you familiarize yourself with the types of retail loss and how they’re impacting your business, start incorporating a few tips to safeguard profits.
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