Retail loss prevention is among the most demanding of all the security issues faced by retail operations. Not only must retail sales employees learn and adopt loss prevention practices, but they must adapt to a frenetic work pace, difficult client customers, even more demanding client employees, and an array of potential threats internally and externally. Additional challenges include threats to sensitive information, such as proprietary and customer data, as well as the avoidance of startling and unwelcome newsworthy incidents that could impact a client’s brand and image.
When it’s time to consider your loss prevention strategy for your retail operation, one of the first aspects to examine is what metrics are most important to look at when you are evaluating your company. Let’s take a closer look at some of the common metrics that can be used to track loss.
Physical Inventory: This is one of the easier metrics to examine. Simply compare inventory turnover by month and a clearer picture quickly emerges of how merchandise is moving through your retail operation. This can be made even more intense by implementing a video surveillance and analytics package or even tracking individual products with innovative technologies like radio frequency identification chips (RFID).
The latter technology works like this: an RFID “tag” is equipped with a tiny antenna and microchip. That unique identifier can then be applied to any traditional inanimate object, be it a pallet of goods being shipped to a retail outlet, a library book, a drip bag for a hospital, or a metropolitan transport card. When the tag comes within proximity of a “reader,” the information on its chip can then be read, written to, or tracked. It’s like a barcode – on steroids.
Monitor the books: Another tried and true method is simply to have your financial operations in good order. Any good accountant will quickly determine whether actual monies are going amiss in your retail operation.
Track Employees: By either using video surveillance or other forms of tracking, you should be able to determine exactly when your employees arrive, what they are doing during their shift, and whether there are times during which they are unaccountable. Collusion among employees who have discovered flaws in your security matrix is common, as is sending in friends and family to help generate fraudulent returns, point-of-sale transactions, and other schemes.
Watch your IT: Your computer services provider or support network should be able to generate a weekly report of system and network downtimes, a monthly report of user access level changes, and a weekly report of system and network changes to help you determine whether anything funny is going on with your computer systems. A video surveillance and analytics package can also help you identify unusual point-of-sale transactions and assess whether there is a pattern of misuse or errors happening.
Check your backups: At minimum, your retail operation should have a monthly point-of-sale system backup and recovery, which should be examined regularly to assess any pattern of misuse.
Security Metrics: Threat assessments are also useful in developing security metrics, which communicate vital information about threats to retail operations. Quality loss prevention specialists can help your retail operation identify security issues and potential problems in order to monitor for threats more effectively.
Crime Response: How you and your employees respond to a major event like a burglary or major shoplifting incident is strongly reflected in the training that employees receive. If employees are not trained to respond to such incidents, the after-effects may be more dramatic and costly than if employees are trained well in advance how to respond and behave during an incident.
When a retailer experiences a loss, they are losing bottom line profitability. Lost inventory requires replenishment at a cost to the retailer and lost monies cannot be replaced. The cost of these losses goes directly to the bottom line of a retail balance sheet causing lost profits that could have been used for new inventory, new store openings, employee benefits or increased earnings. By keeping an eye on these important metrics, your retail store will be able to operate more efficiently and minimize loss.