Retail Loss Prevention Strategies that Work

Business managers are aware of the cost of shrinkage on a profit sheet. But they may not be familiar with the retail loss prevention strategies which have been proven effective.

An article in the Harvard Business Review profiled five large retail chains with a collective shrinkage rate of 44 percent below the U.S. mean for retailers and identified specific strategies most of the stores employed.


Nine retail loss prevention strategies were effective

The  sample companies shared a variety of practices that were either strategic, cultural, or operational. The successful strategies included:

  • A commitment from senior management to make loss prevention a priority
  • Organizational buy-in from managers at all levels
  • Employees embraced their responsibility to reduce shrinkage
  • Strong leadership and multi-functional teams
  • Decisions and practices based upon evidence
  • An openness to innovation and experimentation
  • Frequent discussion of shrinkage and retail loss prevention strategies
  • Prioritizing procedures to control shrinkage
  • Empowering workers and keeping them accountable

A key element for businesses who want to follow their lead is to create a loss prevention plan based on data, identifying gaps, and utilizing tools to prevent loss.

Employees are the best defense

Effective retail loss prevention strategies begin with hiring the right people and training them well. Honest employees who know the value of loss prevention and understand their roles in preventing shoplifting.

Background screenings, reference checks, and purposeful in-depth interviews help you weed out candidates who don’t share your company’s values.

Shoplifters thrive on anonymity, so having employees watch and interact with them makes them think twice about theft.

Cameras are powerful deterrents

Making video cameras and other surveillance techniques obvious can be a deterrent to all types of criminal behavior. Both customers and employees act differently when they know they’re being watched.

As video technology improves and becomes more affordable, adding highly visible cameras to record areas from multiple directions is a sound investment. Systems like DIGIOP ELEMENTS can pair video with POS data to quick verify suspicious transactions.

Merchandising as a security tool

The layout and merchandising of your business place may also help prevent losses.

Visibility is one component. Make sure employees have clear sight lines throughout your store, which will help them monitor customer activity.

Eliminate hidden corners and poorly lit areas; both of which are conducive to shoplifting.

When merchandising, place expensive items closer to areas where staff will be present, such as near cash registers or under lock and key.

Culture matters, too

Your company’s culture has a profound effect upon employee attitudes and behavior, which can also prevent losses. Culture is one of the top retail loss prevention strategies.

For example, retailers have found exceptional customer service, such as greeting customers in the aisle and offering to help them makes shoplifting more difficult.

Employees who take pride in their workplace and understand common goals are less likely to engage in fraudulent or questionable behavior. They are also more likely to report questionable situations to management. Reminding employees of the role they play in loss prevention strengthens your culture. Empower your employees to take action.

Watching for exceptions

Other retail loss prevention strategies focus on use of data from point-of-sale (POS) systems. Many POS systems will provide ways to report exceptions, such as voids or returns.

You can also use this POS data to monitor suspicious activity, such as a high number of gift card transactions or too many returns performed by an employee.

Effective Retail Loss Prevention Strategies

Utilizing the correct tool can be one of the most effective retail loss prevention strategies.

DIGIOP offers a suite of services, including ELEMENTS, our video management system; DIGIOP CARBON, a powerful business intelligence tool, and even Loss Prevention Services, a supplemental service to monitor your loss prevention data.

To learn how other business owners are using DIGIOP tools support their loss prevention efforts, contact us to schedule a DEMO today!

Book a Demo Now