How to Prevent Theft in Your Retail Business?

The retail industry has emerged as one of the most dynamic and fast-paced industries across the globe. But unexpectedly, this sector is facing shoplifting hitches that are draining the growth this sector. Recently a survey was conducted that says, “Retailers of US lose around billion annually because of retail shrinkage, improper cash flow, poor security and a lot more reasons”.

The increasing sophistication and skills of shoplifters is presently the biggest challenge for the retailers and apparently, they are looking for effective to save their business from theft.

Now the question that is striking the mind of retailers is, “Who might be looting my store”?

Since you are going to take preventive measures to reduce retail theft, you need to analyze who is responsible for your losses. According to a study by National Retail Freedom, in 2015, there can be 3 main causes of retail theft:

1. Customers- Around 38% of the retail theft is accounted by the customers in the United States. Items stolen by the consumers can be for personal use or for resale purpose. Whereas, retailers of electronics, apparel, healthcare stores are most prone to this kind of robbery that leads to retail shrinkage.

2. Staff- In US the number of employee theft is around 35%, which is one of the main cause for poor inventory management. There could be various reasons, why employees steal from their companies like some want more cash, some are not happy with their bosses or some want to gift their friends.

3. Accountants, Management and Administration- The rest 27% of retail theft is trapped on accountants, suppliers, and administrative inaccuracies. Accounting for retail store is complex as there are many aspects to look in like, accounts payable, receivable, reconciliation, inventory management, preparing financial statement or taxes, etc. In unfortunate scenarios, your accountant can backstab your trust and can easily steal all your money as they have detailed information of your cash inflow and outflow. There could be some of your suppliers and vendors who can overcharge you for the product or services that you actually never received. Management blunders include mismanagement in purchase or order or pricing items wrongly, which will knowingly lead to losses.

Well, now that you have analyzed who could be responsible for stealing your products or services, you can take some preventive measure to reduce the retail theft. There are many ways to reduce retail theft but it particularly depends on the size of the store, products that are been stolen and the budget of the retail store. In this way, you can decide which option is better for your business.

I have outlined some important steps that can help in reducing the risk of retail theft:

Step 1: Obtain information from your Inventory Management System- To detect fraud you need to know, which products are being frequently stolen from your store and that is possible with your inventory management system. You will have a list of products in categories that include various items, which are out for purchase and items that are still in the warehouse. In this case, your accountant can help you better by giving an appropriate list of products by reconciling the stock accurately. Now, you can decide, whether you should go for low-cost methods for security purpose such as adding monitoring mirrors or hire a security guard.

Step 2: Go for an appropriate solution- Once you have the staring of your inventory and sales, you are all set to address retail theft problems. You can opt for some cost-effective solutions that include:

? Educate your employees about retail theft, this will aware them of the problem and help them to be pro-active about sudden incidents.

? You can easily reduce employee theft by alerting them that if any product is missing they can easily track and they are always under surveillance of CCTV cameras.

? Put shoplifting signs in the store that aware the shoplifters that their crime will be recorded in the cameras and they can be in trouble

? You can attach RFID tags to your products, which is basically a radio-frequency identification tool. Its sensor alerts you if any product is going out of the store without billing.

? You can also hire a full-time security guard for your retail store that will be uniformed and is a great visual deterrent.

Step 3: Outsource accounting- One of the most effective ways is to streamline your retail accounting process efficiently is hiring an accountant who can manage all the accounting tasks accurately starting from purchase order to maintaining all the records, to preparing financial reports. But some retailers find it hard to hire a trustable accountant for their store, so they prefer retail accounting services. The first preference of outsourcing firm is data security; you can handover your accounting tasks on an hourly basis to these firms that too at cost-effective prices. This enables to reduce your retail theft issues and helps to focus on core activities that can boost the bottom line of your retail store.

Final Word-

If you want to identify a shoplifter as he steps into your store; alert your employees to assist him better, which is known as “real good customer service”. If he realizes that you are watching him from the moment he came in your store, he’ll go somewhere else. At the end, I just want to wrap up the entire aspect in one line, “Obviously, theft affects profits margins”.

About This Author

Willox Gaulard Working with Cogneesol Inc. an ISO 9001:2008 certified firm Joined: December 5th, 2017