5 Effective Tactics to Prevent Shoplifting in Your Business

Shoplifting can significantly impact a small-business owner’s bottom line. Taking proactive measures to prevent it is a must. What are the most tried and tested methods of decreasing shrink from this source?

Here’s what all owners and managers should know about effective tactics to prevent shoplifting.

The High Cost of Shoplifting

From a petty thief’s perspective, shoplifting seems harmless. What’s a lipstick to a multimillion-dollar corporation? However, other thieves are more sophisticated, running complex attacks that store owners should learn to recognize. Failure to do so could cost their bottom line. American small businesses lose roughly $1,686 per month to retail theft. Collectively, stores lost over $121.6 billion to shoplifters.

Shoplifting doesn’t only cost businesses — it also harms communities. Small retailers are less able to absorb such losses, which can mean shuttering their doors in favor of big box retailers that offer multiple goods but detract from local character. Additionally, theft causes rising prices across the board, as retailers often have little choice but to pass expenses on to consumers.

How Businesses Can Prevent Shoplifting: 5 Tactics to Employ

Small businesses can select from multiple tried and tested methods to prevent shoplifting. These tactics have proven efficacy, and there are options for every budget. Start small and experiment with various strategies. The most successful and secure retailers often rely on a combination approach, utilizing all or some of the following.

1. Monitor Ingress and Egress

Most shoplifters enter and exit through the front door. Simply having a warm body there can act as an effective shoplifting deterrent, which is why huge retailers such as Walmart often employ this tactic.

The rules regarding what these employees may do vary by location, meaning individual retailers must establish specific protocols for what to do in various circumstances. For example, it’s fine to have an associate check receipts, although customers also have the right to refuse to show them unless shopping at a membership store. It is the store owner’s responsibility to educate workers on what to do if this occurs. Should they call 911 or contact someone else on the store security team?

Although stores have the right to detain individuals they reasonably suspect of shoplifting, doing so can put the associate’s life and health at risk. In light of this, many business owners pair such tactics with other security measures, such as cameras.

2. Lights, Camera and Action

Cameras increase security by gathering information about shoplifting that has occurred. Retailers can then pass this information on to police, who can apprehend the suspect and, hopefully, recover the stolen items.

Security cameras don’t only protect retailers from theft. They can also increase their bottom lines when used wisely. For example, posting signs about monitoring in parking lots can make shoppers feel more secure that no one will break into their car while they’re busy with a new computer or cellphone purchase. Making the camera presence known could increase traffic after dark.

Fortunately, the law supports camera use in most public spaces, such as cash registers. However, use sound judgment and consult a legal expert if necessary. Cameras don’t belong in areas with a reasonable expectation of privacy, such as bathrooms and employee break rooms.

Furthermore, camera monitoring impacts their effectiveness. Merely posting signs that a camera is in use — even if no such device exists — deters some theft. However, owners and managers must also decide:

• Whether to invest in continual monitoring that notifies authorities of suspected incidents, even after hours.
• How much cloud storage to purchase and for how long. For example, some companies keep videos for only a few months, which may not be enough time to document ongoing crime rings.

The greater the degree of storage and monitoring, the higher the monthly fee. However, the expense may pale in comparison to the cost of shoplifting, especially in high-crime areas.

3. Stay Scam Savvy

Retailers must also stay alert to ongoing crime scams and educate their employees on how to recognize them. For example, one common ruse involves using bags with security tag blockers. Thieves swipe an expensive item from one store location before having another person head to another store to exchange it for a receipt. They then return the exchanged item with the receipt to the original store for cash.

Training and establishing protocols again reign supreme. Store associates should avoid approaching such individuals. Instead, they should pass on their suspicions to the properly appointed security personnel. Otherwise, they may tip off a crime syndicate and interfere with a major bust.

4. Truly Treat Employees Like Family

It’s impossible to overstate the importance of background-checking employees. Employee theft accounts for 29% of all shrink, but savvy owners can prevent it by understanding what motivates such behavior.

Many thefts occur from desperation. For example, theft cases among homeless individuals are 58 times higher than among the housed. However, many retail jobs also no longer pay enough to afford soaring housing costs, and employees often hide their homelessness from their employers out of fear of retribution.

Employers aren’t parents, but they should show they care. Paying employees fair wages and initializing tough conversations are crucial to reducing shrink. They’re also critical to building a strong, cohesive team that values loyalty. Furthermore, providing proper salaries is an important part of the unspoken social contract that keeps society peaceful and functioning as it should.

5. Invest in the Right Inventory Tracking Solutions

A retailer can’t know how much they have lost to shoplifters if they don’t keep careful track of inventory. Fortunately, today’s technology makes doing so easier than ever before. Nearly everyone uses barcode and RFID tags that allow them to scan items and update stock levels. They also inform retailers if items aren’t stolen but merely missing from the correct shelves.

Some retailers go even bigger, affixing airtag-type devices to big-ticket items. These gadgets include location tracking, allowing police with compatible readers to follow the thieves right to their door for apprehension and recovery of stolen items.

Less Effective Shoplifting Deterrence Methods

These methods for preventing shoplifting work, but others are less effective. For example, small businesses could learn a lot from Walgreens, which recently incurred a substantial operating loss. CEO Timothy Wentworth said this was due to locking up countless items. This approach required customers to find an associate to unlock their purchase, but many simply shopped elsewhere.

That’s not to say that securing big-ticket items isn’t wise. Many retailers use this approach — but it works best when applied sparingly. Savvy owners must balance customer convenience against potential shrink or risk an even bigger loss.

Make Efforts to Prevent Shoplifting

Shoplifting can significantly impact a small business’s bottom line. In extreme cases, it can lead to the loss of a dream. Taking proactive steps to prevent it is a must. Fortunately, solutions for any price point exist, and savvy owners take time to review their options and do what they must to secure their bread and butter.