Fighting business loss is a constant challenge for most retailers. With the cost of this loss presently amounting to billions in the United States, the stakes have never been high. However, most retailers either struggle to understand where the losses are coming from or don’t have enough strategies established to address them. So, let us look at the loss prevention mistakes you can make as a retailer that may end up costing your business.

Failure to Invest in Loss Prevention

To combat loss in your store, you have to invest in loss prevention. Note that this is an ongoing investment where tools and technology must be updated regularly. The fact is, whatever worked for you five or so years ago might no longer be effective as far as security is concerned. Internet availability means thieves are now more knowledgeable and have substantial info at their disposal.

Fighting this increasing threat requires you to consistently assess your loss prevention strategy and upgrade it where necessary, looking for new, improved techniques to mitigate possible loss.

Lack of Record System

If you do not keep records properly, you might not even know you are losing money. You should ensure to balance your books every day. Also, take inventory frequently then compare it with the business sales. Make use of a Customer Relationship Management (CRM) system to keep tabs on client communications. Do not allow poor record-keeping to hide missing revenue.

A critical part of keeping tabs ought to include counting cash drawers each day to know what amount of cash is there always. Doing these counts deters skimming and helps you notice any mistakes.

Failure to Create Strong Passwords

Loss prevention in businesses is not always about profit or physical products loss. Taking information, designs, and intellectual property also counts as theft. Having a weak password for work systems or on work computers creates vulnerabilities, allowing sensitive info to be accessed by snoopy people. All work systems, software, and devices ought to have a secure password.

Failure to Conduct Background Checks or Check References

You must know how difficult it is to find and keep employees. When you’re understaffed and must cover gaps in schedules, you can be tempted to employ any job applicant that comes your way. With the craziness that comes with managing or owning a business, you can easily forget to do a background check or contact references.

When you forget to do due diligence, you may miss knowing that the applicant you just hired was terminated from their previous job because they were caught stealing goods from the store. But if you spare time to conduct background checks or follow up with references, you’ll help prevent the same problems affecting you.

Ineffective Use of Security Cameras

If you install fake security cameras or hang signs of cameras (with no real cameras), you’ll be taking a risk and gamble experiencing actual loss and theft. Security cameras help prevent both employee theft and shoplifting.

Whereas having operational cameras is critical, installing them where they’re most effective is equally crucial. The most critical spots include exit/entrance, backroom, outside dressing rooms, and checkout to monitor employees and customers. If your budget can only allow one camera, you should install it near or at head level for easier subject identification. A single security camera installed at a severe angle may make it challenging to spot a burglar or thief.

If you can afford multiple cameras, a high angle covers much square footage. Merging multiple placements works well. The correct angle also has to take distance into account. It’s most effective if the whole sales floor can be viewed so anybody monitoring the camera records can see behind displays and between shelves. Ideally, you should install security cameras at a spot where they can capture license plates and faces should your business want to file charges against any culprit.

For instance, an outside security camera may not identify a license plate number if you’ve installed it far away from where the parking lot is. Do not believe those scenes in the movies where an investigator enlarges images with superb clarity. In the real sense, whatever resolution you capture is the same resolution you’ll have to work with.

Other security camera mistakes that can be detrimental to your business are:

Not Understanding the Laws

Some states don’t have laws governing video surveillance, while others do. Before installing security cameras, plan in advance on how you’ll remain in compliance with the laws. This brings up an issue of dummy (fake) cameras. You could buy them cheap (as cheap as $10). However, saving cash now may subject you to lawsuits in the future.

Some states will require you to erect signage to notify customers they are under surveillance. Thus, fake dummy cameras would need signs, meaning you’ll be making false claims. They’ll also create a false sense of security. Should any of your employees be attacked by robbers within the view of the dummy camera, you may be subject to severe legal consequences.

Most importantly, you should not invest only in security cameras and not a complete security system.

Installing Security Cameras When You Do Not Have The Proper Knowledge

One disadvantage of a do-it-yourself installation gone wrong is that the camera may not work. Additionally, you may mess up other security equipment and your property if you do not know what you are doing.

Consider reaching out to a security company and assign them the work. They ought to give you customer support and a warrant should you have any problems or questions. Even if you have the technical skill to install cameras, your many responsibilities may prevent you from doing the task. Your responsibility is to run a business.

Using Low Quality or Cheap Cameras

Think of your security investment as shrink. Shrink describes inventory loss caused by employee mistakes, shoplifting, and theft. Per the (NRE) National Retail Federation, shrink cost retailers about 50 billion dollars in 2018.

Withholding funds for your security system may create a poor return on your investment. Low-quality or cheaply-made security cameras have low image quality, low reliability, and buggy software. You will notice that there’s a price difference between commercial-grade and consumer-grade cameras. What is made for your residence might not be a proper fit for your business.

A commercial-grade camera usually costs more, but it gives you options such as automatic adjustment to unexpected lighting changes, higher resolution, and infrared lighting. You also should consider features like automatic saving to the cloud, motion detection, weatherproof casing for outdoor placement.

Using Poor Lighting Cameras

You won’t have a clear image when you point a low-quality security camera towards a strong light source since it will be saturated with light. If the camera was meant to capture a thief’s face, it would only give you the thief’s silhouette but not their clear face.

You will have the same problems if you are using a low-quality security camera during the night. It will not capture a culprit’s features if it cannot adjust to the lighting. This is not good news, especially if you so much want to eliminate stealing at your store.

Lacking a Theft Prevention Strategy

Whereas most people understand stealing is wrong, employees might not fully know what qualifies as stealing. These workers may think that removing cash from a cash register is stealing. But what if they use their employee discount on family and friends? Do they understand if they share your business’s customer service strategies and tricks on their blogs, they’ll be violating intellectual property rights? More instances that constitute theft include:

  • Taking office supplies.
  • Creating incorrect cash register entries then pocketing the cash.
  • Claiming wages for incomplete work.
  • Submitting forged reimbursement expenses.

In all these cases, the lack of a loss prevention strategy that clearly outlines what constitutes stealing leaves the description open to interpretation by your workers. Thus, it is advisable to have a loss prevention policy in place, which also outlines the role of the management in loss prevention. State what consequences you will impose when a worker steals from the business. Consider pursuing restitution of stolen funds, litigation, and termination as some of the disciplinary actions you can take.

Failure to Set Social Media Rules

You should allow very few of your workers to access your business’s social media platforms. Set specific limits for your Instagram, Facebook, LinkedIn, and Twitter pages. Give examples of the content you approve, if necessary. While you are at it, inform your workers to avoid:

  • Videos and selfies that reveal sensitive information.
  • Answering suspicious social media messages.
  • Posting photos of their badges. Hackers may use the pictures to create fake badges.

Having an Indefinite Return Policy

According to Appriss, the United States retailers lose approximately 18.4 billion dollars courtesy of fraudulent returns. There are several ways through which you can strengthen your business’s return policy. They include:

  • Only allowing store credit on gifts returns that do not have a receipt.
  • Requiring receipts or using a point-of-sale (POS) system.
  • Setting a returning deadline.
  • Considering the state of the returned merchandise.
  • Knowing state laws prior to setting your regulations.

Lacking an Employee Recognition Program

Eighty percent of businesses have a recognition program in place. This way, it is easy to spot bonuses and offer service rewards. If you do not know what recognition or rewards fit your workers, ask them. We have employees who like public praise; others are content with only a quiet appreciation of ‘thank you,’ while others love gifts. A reliable employee recognition program stirs loyalty. It is a solid defense in combating theft.

Ignoring High Employee Turnover Rates

You may think you provide a conducive workplace. But do your employees feel the same way? According to Terra Staffing Group, it will cost you approximately 33 percent of a salary to replace a worker. Put otherwise, you would pay almost ten thousand dollars to replace a person who makes thirty thousand dollars a year.

Whenever you hire a new worker, you may need to cover costs for advertising for an open job position, recruiting, interviews, and training. It can also include charges related to drug screenings and background checks and the cost to administer pre-employment evaluation tests. There is also an effect on productivity while a replacement is being recruited and hired and a possible negative impact on team morale and company culture. You may also miss good opportunities by always looking for replacements. In a nutshell, the cost of worker turnover can be hefty.

You do not want your business to earn a bad reputation due to turnover. Current employees do not always want to see their colleagues leave. At the same time, potential workers do not wish to work for a business that faces changes every week.

Not Conducting Shoplifting Training

Do you ever teach your new employees how to detect thieves? And do you ever reward your workers if they catch shoplifters? Employees should be on the lookout for customers who look suspicious. Suspicious customers include those who:

  • Come in groups and cause distractions.
  • Watch out for workers to find out if they are paying attention.
  • Put on out-of-season clothing such as large scarves and baggy jackets during summer.
  • Frequent the business but never purchase anything.

You want your employees to look out for shoplifters. But at the same time, you do not want them to accuse genuine and honest customers. That is why managers must always be involved.

Enforcing Rules By Intimidation

In the United States, employee theft results in more inventory loss compared to shoplifting. But what should you do to address this problem? Should you encourage or threaten? You may force good employees to look for work somewhere else if you handle things very strictly and cruelly. Loyal workers may not consider stealing. An intimidation culture will not, however, result in loyalty. Tell your workers you believe they will do what is expected of them. You should not make them feel as though they are under a microscope. Additionally, an effective theft prevention strategy establishes clear disciplinary actions. If you terminate an employee for stealing, everybody will know you’re resolute.

Lacking an Emergency Plan

Natural disasters, fires, and robberies do happen. Having an emergency plan in place will empower your employees and should place them at minimal risk. This might not technically count as a loss prevention matter, but it is a clever move.

Underestimating Your Opponent

Contrary to what most people believe, shoplifters don’t fit in a single profile. They come from all walks of life, demographics, and age brackets. Their shoplifting techniques also vary. They range from concealing small items to intricate preplanned thefts that involve groups. A costly mistake you can make is believing you can easily identify a shoplifter and presume theft won’t happen to you.

Failing to Involve Your Staff in the Fight

Employees are the number one line of defense as far as preventing loss at any level in the business is concerned. Therefore, you should actively involve them in the fight.

Also, this narrows down to staff training, procedures, and systems. Your staff ought to be fully aware of best practices for gift cards and returns. As we mentioned, you ought to screen them during the recruitment process to help reduce employee theft and train them on the signs of shoplifting. Your staff should also understand inventory counting and stock reconciliation procedures that assist in identifying both supply-chain and in-store loss.

Most importantly, they have to be fully aware of how loss affects them personally as workers, impacting the business bottom line and thus placing their employment in jeopardy.

Failing to Go Back to Basics

Even though a few of the techniques used in fraud, theft, and shoplifting might have changed, the fight remains unchanged. For you, it is about going back to basics and safeguarding your business, products, and bottom line.

Personal items must be protected at a product-based level, using tools such as security labels, security tags, and electronic article surveillance. The business, on the other hand, ought to be protected using CCTV and possibly security personnel. It also should be protected with procedures and policies that help end inadvertent loss and theft.

Not Knowing Your Numbers

You can’t manage what you don’t measure. Thus, you want to understand precisely where the loss is coming from and when it’s highly likely to occur. Loss in a business can be due to many factors, including malicious threats such as employee theft and shoplifting. It could also be due to non-malicious issues like human errors. Loss can also happen through e-commerce or in the supply chain.

Only when you investigate where your business’s weaknesses lie will you be able to establish the right strategy to fight that loss.

Hire a Loss Prevention Expert Near Me

If your business is experiencing loss, it could be that there’s something you are not doing right to prevent these losses, and it is time you implemented solutions. One of these solutions is hiring an expert in business loss prevention. At Green Knight Security, we can give you solutions that will help you address loss due to internal or external causes. If you are looking for a loss prevention officer or need help creating a loss prevention plan in Los Angeles, CA, contact us today at 844-457-8326.