Doesn’t it seem like criminals somehow manage to stay ahead of retailers in the fight against shrinkage? Just when you think you’ve got a handle on the problem, shoplifters dream up some new scheme to lift your merchandise. In fact, last year retail shrinkage cost the industry nearly $50 billion.
Shrinkage and retail fraud will always be an uphill battle but there are steps you can take to deter criminals — and employees — from lining their pockets at your expense.
#1 Invest in Training Your Frontline Soldiers: Store Associates
Your first line of defense in the war against retail fraud is one of your most valuable assets: your boots-on-the-ground store associates. There are many ways they can be useful in combating shrinkage, from something as simple as greeting each customer who walks in (so that potential shoplifters know they’ve been personally seen and spoken to) to ensuring you’re adequately and visibly staffed with associates located throughout the store.
Teach your associates to be on the lookout for suspicious or questionable behaviors that can indicate the potential for retail fraud. Does a shopper look nervous? Is one shopper engaging a staffer while another group is clustered elsewhere in the store? Is the person touching a lot of products but not seeming particularly interested? These can all be signs that consumers are up to no good.
Shoplifters continuously evolve their methods so keep your associates up to speed on the scams du jour. Maybe it’s using an umbrella or baby stroller to squirrel away stolen goods or switching price stickers to pay a lower price for a high-ticket item. Whatever the case may be, educated associates stand a better chance of spotting retail fraud if they know what to look for.
And be vocal about informing associates that retail fraud isn’t just a problem with shoppers; it’s an internal issue as well. Set policies for the entire associate workflow so that the same staffer isn’t always taking the trash out, for example (a common way to smuggle stolen merchandise out of the store).
#2 How People Counters Combat Shrinkage
Technology is also your ally is the war on retail fraud. In particular, people counters provide a data-driven look at your high-traffic areas, which can help you single out spots in your store where you should be on the lookout for suspicious activity, beef up your staffing, add video camera surveillance and increase signage warning shoplifters. Did you know that simply including an image of eyes on a “shoplifters beware” sign significantly deters would-be thieves from stealing?
#3 A Right-Sized Returns Policy
In an effort to keep customers happy, some retailers create return policies that please loyal shoppers — but create vulnerabilities with the sticky-fingered set. To prevent retail fraud, require that customers bring receipts along with the products they’re returning to ensure that the amount you’re reimbursing them isn’t greater than what they paid. And set a timeframe for returns so that you’re not burdened with inventory that’s difficult to move.
#4 How POS Reports Protect Against Retail Fraud
Speaking of inventory, here’s where your POS platform also gives you insights into shrinkage. POS reports offer on-demand details about your inventory holdings — and shine the spotlight on potential anomalies. By regularly reviewing your POS reports, you can begin to recognize trends in your stock levels and how they match up to both sales and employee shifts. If a particular associate routinely is logging an unusually high number of coupons or discounts on her shift, it could be a red flag that she’s skimming from the till. At the very least, you’re equipped with hard numbers to investigate further.
With a thoughtful strategy, retail shrinkage can be managed and reduced. By implementing these four tactics, you can stay ahead of both shoplifters and dishonest employees all while protecting your profits.