While unfortunate, theft is a part of owning and managing a retail business. It is the primary cause for all inventory shrinkage, with retail businesses losing over $61 billion to shoplifting in 2019.
Here we will take a look at five of the best tips for preventing theft and shoplifting in your business:
1. Identify Where Your Losses Are Coming From
Before you can address your losses, you have to determine where they are coming from. According to the National Retail Federation, there are three types of theft within the retail industry: employee theft, shoplifting by customers, and clerical errors in your inventory counts. While customer shoplifting is the most common source of retail loss, neither employee theft nor clerical errors are uncommon.
Shoplifting accounts for around 37% of retail loss in the United States. In dollars, that’s an annual 22.8 billion in losses. Health and beauty, apparel, and electronic stores are the most vulnerable to shoplifting and should consider including crime coverage in their insurance.
When considering how to prevent shoplifting in your store, you should know the common ways that shoplifters will steal:
- Tag Swapping: When thieves switch high price tags with lower ones.
- Bag Stuffing: When a thief fills a bag or purse with your goods.
- Clothing Concealment: When thieves conceal products under their clothing.
- Packaging Removing: When thieves remove packaging and security tags to avoid setting off alarms.
Employee theft is another major contributor to inventory shrink. Sometimes employees will outright take merchandise from their employers—because they are dissatisfied, feel underpaid, or simply want the extra cash. Employee theft can also look like offering discounts to friends or ringing things up incorrectly to save themselves or others money.
Despite being the factor most within your control, clerical errors still make up about 33.5% of all inventory shrinkage. Typically, these errors are due to purchasing and receiving counting errors, damaged or lost merchandise, accounting mistakes, and other errors in the inventory management process.
Tip: A POS system like Lightspeed will automate many aspects of your inventory management process, allowing you to get accurate and real-time stock counts, sales reports, and business insights. This will not only save you time but will also increase your accuracy and reduce your losses.
2. Educate Your Employees
The best way to ensure that your store is safe is to train your staff on retail theft prevention techniques that they can practice in-store. Here we will take a look at some of the top strategies that your staff can implement to deter shoplifting.
Engage With Customers
If you have attentive and engaged staff, thieves will feel watched, making them less likely to steal from under your nose. Tell your staff to greet everyone upon entry, offer frequent fitting room check-ups, and be attentive to all your shoppers should any needs or questions arise. As a bonus, this level of engagement will discourage thieves and foster a positive customer experience for all your customers.
For example, at my boutique, we never let customers spend too long unattended in their fitting rooms. After a few minutes, we would simply knock on their door and ask them if they needed anything or if we could take anything out of their way. This not only made our regular customers feel taken care of and encouraged them to try on more pieces, but it also prevented thieves from getting too comfortable in their fitting rooms if they were up to suspicious behavior.
See more top strategies for loss prevention.
Another way that you can prepare your staff for theft is to teach them about the warning signs and theft identification. While your staff should not put themselves in harm’s way and try to apprehend a thief, if they can spot signs of theft before anything has occurred, they can intervene with good customer service. Additionally, if your staff knows how to identify suspicious behaviors, they are more likely to see the act of stealing occur and be able to describe it to authorities.
Here are some things that your staff can look out for that might be signs of a thief:
- Nervous behavior (rocking, looking around, and fast walking)
- Avoiding eye contact
- Wandering without making a purchase
- Leaving and returning to your business repeatedly in a short period
- Staying in low visibility areas
- Carrying large bags or purses
Stopping Employee Theft
The final thing you should do when training your employees on theft is to let them know the measures you are taking to prevent employee theft and shoplifting. If your staff knows that you are on the lookout and are taking steps against all theft, then they will be much less likely to engage in the behavior.
Let your staff know about all the retail theft prevention tactics you are taking—that you track inventory and source shrinkage problems, run audits, and have installed a video camera. Additionally, if you are using a POS system, consider creating separate log-ins for each employee so that you can track which employees rang up specific transactions.
3. Organize Your Space
In addition to getting your employees prepared to deter theft, you should prepare your physical space. An organized storefront without clutter or disarray makes it more difficult for thieves to steal by opening up your sightlines and making it more obvious when something goes missing.
Identify High-Risk Items and Areas
When organizing your store, you should start by identifying your most at-risk items. Typically, these are smaller or more expensive items that are convenient or valuable to thieves. You should do what you can to place these products close to the register or in an area with high visibility.
In my store, for example, we kept all of our jewelry on the register. We knew that, of our stock, our small and higher value jewelry pieces were the most likely to attract thieves. By placing our most “stealable” goods at the register, we could keep an eye on our jewelry at all times and intercept any shoplifters.
From there, you should also identify the areas of your store that are at the highest risk for theft. Concealed areas or places where you keep a lot of easy-to-nab items are popular with thieves. As you organize your space, try to move shelving, open up spots with poor sightlines, and keep smaller merchandise in open areas.
Put High-Value Items in Locked Cabinets
Another way that you can organize your merchandise to prevent shoplifting is to place your highest-value items in a locked case located centrally in your store. This will keep your goods secure and allow you to keep an eye on them from all areas of your store.
You will often see this strategy in jewelry stores, where all their merchandise is displayed in cases that clerks operate behind. This same strategy, however, can be applied to many different settings on a smaller scale. Take the image above, for example. This trendy boutique did not have to sacrifice its brand or store flow to create a secure and stylish display case for its most expensive goods.
4. Install Signs and Mirrors
One of the best ways to deter thieves from stealing your goods is to let them know they are being watched. If you use security cameras, use signs to tell shoppers that they are on camera or display signs that let people know that you take shoplifting seriously and are looking for offenders. These features won’t be disruptive to the average shoppers, but they will put thieves on edge and disincentive them from committing a crime.
Another thing that you can install in your store to improve its security is mirrors, like the ones above. On the left, you see a convex mirror, perfect for installing in corners with poor sightlines either due to the shape of your space or the arrangement of your furniture pieces. On the right, you have another option: the dome mirror. These are perfect for giving you a 360-degree fisheye view in large spaces.
Mirrors are great for improving your visibility, and thieves know this. You can use mirrors to ensure that no area of your store is out of sight so that thieves don’t have an opportunity to engage in their crimes.
5. Try a Security Technology
Although training, signs, and mirrors are generally enough to reduce retail theft for the small business owner, the next step up in security is installing security equipment, such as cameras and RFID tags.
The most obvious security technology option is a video surveillance system. Video security cameras not only allow you to check on your customers and employees but also will provide an obvious visual deterrent to would-be shoplifters. Further, cameras will capture any criminal activities on tape, giving you photographic proof should you ever need to prosecute a shoplifter.
Discreet cameras are not really your best choice. You want your surveillance system to be obvious, and big cameras that see clearly are especially effective when paired with a monitor that is placed in a public space where people can see themselves on video.
RFID tags or Radio Frequency Identification tags are small stickers that you attach to the back of product tags, and then that sticker will send radio signals to a small receiver. An RFID scanner at checkout will deactivate RFID tags, and if someone tries to leave your store with an RFID-tagged product prior to deactivation, then an alarm will sound.
Tip: When integrated with a point of sale (POS) system, RFID tags will also give your inventory management a leg up. They can give you accurate and real-time insights into your orders and receiving, current stock levels, shrinkage, and more.
While these are a great deterrent and can be highly effective, thieves will often remove tags. To spot any missing inventor from your store, you should also be doing nightly tag checks to see if there is any evidence that a shoplifter removed an RFID tag and took your item. Another option you can try is RFID tags that are attached by an ink-loaded plastic piece that you have to remove manually with a special device at checkout.
Theft is an unfortunate part of the retail industry and can cause your business to incur major losses if not taken care of systematically. With the tools in this article, you will be able to take steps to prevent theft in your business. Whether you use a high-tech solution or rely on attentive staff, you can work to deter and hopefully stop theft.