October 12, 2017
How to manage loss prevention without staff in every store
Loss prevention looks different for every retailer. For some, it means security personnel working high-risk areas and back offices dedicated specifically to CCTVs. For others, it can mean an LP field team that’s dedicated to the task but always feeling like they’re playing catch-up, traveling from store to store to chase down the latest problem.
No matter what your loss prevention program looks like, but especially if you don’t have LP staff in every store, experts like those at LPM Insider recommend loss prevention initiatives based on early deterrent and pattern recognition. According to LPM Insider, “limiting opportunity is a prime factor in theft prevention, and stores that fail to run a tight ship in terms of these critical control measures are those that are most likely to have retail theft issues.” A tightly-run ship might include:
- Physical security like burglar alarms and roll-down gates over windows and doors
- Reviewable CCTV and security cameras
- Regular loss prevention audits
- Shrink training and awareness
- Automated programs to monitor POS transactions and currency
- Investment in LP team members to cover multiple store locations
- Target-store loss prevention programs
The final two suggestions – team members responsible for managing loss prevention in multiple locations and target-store prevention – often go hand in hand.
“The focus of the loss prevention initiatives in these settings is placed on preventing and deterring theft and other incidents before they happen,” says LPM Insider, “rather than using store resources to actively attempt to apprehend shoplifters.”
If your loss prevention professionals oversee multiple stores, how can you make sure they’re spending their time in the right places? First, focus on loss prevention’s version of the 80/20 rule. “That is to say, 20 percent of the company’s locations will typically account for 80 percent of the company’s shrink problems, “ LPM Insider says.
It goes on to explain: “A store that produces a high volume of sales may have a lower percentage of lost dollars, but in relative terms, those dollars may be significant. Conversely, a store with low sales volume may have a higher percentage of shrink, but fewer dollars than the high-volume store.”
LPM Insider encourages stores to consider the following indicators when working to determine which stores could be designated high-risk. Once those designations are made, traveling LP team members can be assigned to focus on those locations more heavily. Ask:
- Does the store have a history of retail shrink problems?
- Is the store prone to high external theft incidents?
- Is the market area prone to other types of crime?
- Has the store experienced a significant number of internal cases or internal cases with significant dollar loss?
- Are neighboring locations and/or other retailers experiencing high shrink results?
- Are there poor management practices in place or weak or poorly trained managers? Is there a lack of leadership?
- Are the store associates properly trained? Is there high employee turnover?
- Are operational controls being followed? Do additional controls need to be put into place?
After you’ve identified stores at high risk for shrink and deployed loss prevention resources their way, should you forget about your good stores? Of course not. Your back-office and front-end practices across the board can make some of the biggest impacts in how much you lose to shrink. Even if a store is at low risk of potential problems, closely regulated procedures can help you identify issues before they get out of hand.
After all, LPM Insider muses, “some of the best loss prevention practices are invisible,” and “it’s just as important to understand what we don’t see.” Whether you have a vast LP team with associates in every store or a hard-working band of field associates, getting a clearer picture of what’s happening in your stores is the best place to start.