Reducing Theft In Your Retail Business

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Reducing Theft In Your Retail Business

Shoplifting is estimated to cost Australian retailers anywhere from $2.5-$2.7 billion every year.

This amount then has a knock on effect, with some reports estimating retail theft are collectively costing the average Australian household more than A$424 per year.

With figures like this, it is important that retailers are doing whatever they can to minimise shrinkage. For most business owners, some theft is unavoidable, but there are things you can do as a business owner/manager to minimise it.

One of the most important things to identify is where the shrinkage is occurring – is it on the shop floor, at the counter, or, as unpleasant as it is, a result of employee theft?

Let’s talk through each one.

Reducing Customer Theft

reducing retail theft
A customer is far less likely to steal if they know you are aware of their presence. Always try to have a team member at the front of the store, greeting customers as they enter.

·      Use the correct shop fixtures. Lockable display cases for expensive items are a must.

·      Keep expensive items at the counter. Items like mobile phones, jewellery and other small valuable items are usually a prime target and are best merchandised in a lockable counter.

·      Conduct regular stocktakes. A stocktake will highlight which items are being stolen. Although not initially used as a preventative measure, if you can regularly identify which products the thieves are targeting, you can take extra precautions with these items, whether it be moving them to an area of the store that is more visible to staff, or locking them away.

·      Use security cameras, or at the very least, mirrors, so that staff can monitor the customers.

·      Staff awareness. Studies have shown that employee visibility is the #1 deterrent for potential thieves. Train your staff to continuously walk the floor, check the fitting rooms, speak to and make eye contact with customers. If your wages budget allows for it, use store positioning, where one team member is assigned to the greeting area, one to the floor, one to the fitting rooms etc.

·      Speak to each and every customer that enters the fitting room. Numbered discs that communicate how many items a customer has taken into the fitting room are an excellent idea. At the very least, letting the customer know that you aware of how many items they have by simply saying ‘Feel free to take your 3 items into this fitting room’ is sufficient.

·      Become friends with your centre security guard. It may assist in them responding faster if you require their assistance. At the very least, you will be able to find out what loss prevention issues your centre is having and make sure you are on top of it.

Reducing Workplace Theft

reducing staff theftSurprisingly, employee theft is extremely common and according to the below article, costs small businesses $1.5 billion per year.

In a previous retail role of mine, we had a Loss Prevention department that would alert me when there was suspicious activity going on in a store. In general, a higher than average refund percentage was a big red flag. Once the store was flagged, further investigation took place, whether it be staff monitoring or additional stocktakes. It wasn’t long before a particular team member would be identified. Over a period of time, so much evidence would be gathered that it was impossible for the team member to deny wrongdoing once I interviewed them.

Of course, not every business has a luxury of a loss prevention department, but there are still plenty of things a small business can do to minimise employee theft.

·      Employee Training. A loss prevention information session to explain the consequences and implications of in house theft can go a long way. These sessions are a good time to explain the impact employee theft has on a business, such as less hours and limited wage increases. Other things to discuss are how to spot employee theft and what to do about it, and consequences should an employee be caught stealing.

·      Place lockers in the staffroom. Show your employees that you are also concerned for their own items by offering lockers for their valuables.

·      A POS system where each team member if given their own code to process sales and send/receive stock is ideal.

·      Train all staff in your stores refund procedure. If necessary, have a manager approve all refunds before they are processed through the register, but try to not let this be to the detriment of customer service. There is nothing more frustrating than being told to come back to a store when the manager has returned from lunch so they can process a refund.

·      Install visible surveillance cameras. These could also be discussed in the loss prevention sessions described above.

Although unavoidable, losses due to theft can certainly be minimised by following the steps above.

Take a look at some of our lockable shop fittings here.

Sources:

https://www.insideretail.com.au/blog/2015/11/05/shoplifting-and-employee-theft-hurting-retail/

http://www.smh.com.au/small-business/managing/is-it-ok-to-steal-at-work-20140813-3dm8s.html

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