Here are some proven loss prevention strategies that will protect your business and help develop a culture of safety in your workplace:. Loss prevention experts have found that encouraging employees to buy into a new loss prevention initiative is usually more effective than simply offering rewards programs or punishments to coax them into compliance. They need to see the initiative as a good cause that they can rally behind.
When employees are invested in the success of the business, they will be much more likely to protect it from losses. Explain to employees that you want to create a better work environment for them and that loss prevention is part of that plan. To reinforce your message, you can find other ways to show employees that you value them and care about their personal success. Loss prevention needs to be enforced regularly and consistently for your efforts to truly take hold.
The fastest way to lose employee buy-in is for them to see the business inconsistently apply loss prevention procedures. Your best tool to enforce a new loss prevention program is a well-documented policy. Everyone in your company needs to know how they are expected to help prevent losses. Additionally, your policy should detail all necessary procedures for preventing and responding to losses. If your business has dealt with internal theft in the past, you might want to consider adjusting your hiring policies.
Consider whether additional reference checks or background screenings might be worthwhile for warehouse staff positions, for example, and whether credit checks make sense as part of screening candidate accountants. Make loss prevention part of your new employee orientation. Explain that your business cares about its employees and wants them to work in a safe environment.
You also need them to alert managers as soon as they catch any accounting errors. Send status reports to managers so they get regular feedback on how their department, store, or team is preventing losses. Communicate regularly, perhaps in a company-wide email, to remind everyone of the importance of loss prevention. Remember, loss prevention is about more than dealing with theft. Sometimes, losses are only noticeable on the balance sheet.
Consider whether you may need new accounting practices. Many businesses only perform cost accounting, meaning they track inventory based on the cost they paid for full lots of items.
Instituting retail accounting takes more work, but it usually catches more administrative errors. This accounting method tracks actual retail prices over time, including markups, markdowns, and sale prices on individual items.
You can more easily identify shrinkage by using retail accounting than you can with other methods. For an online retailer, a loss prevention strategy can include software that detects purchasing anomalies like shipping addresses that differ from billing addresses, requiring debit card verification to make purchases, or automatically setting purchase limits to mitigate criminal activity because very large orders can indicate attempted fraud.
In short, loss prevention includes any measure that businesses take to help protect revenues and mitigate fraud. Loss prevention is crucial for both omnichannel retailers and brick-and-mortar stores—a sound strategy for minimising profit loss improves your bottom line and can help your business grow. Security tags. These can discourage shoplifting and alert staff when it does occur.
Special equipment is necessary to remove or deactivate the tags properly. Many security tags contain ink that damages the stolen item if the tag is removed by force. Clothing retailers most often employ this type of loss prevention. Closed-circuit television. This is a highly effective method for recording and monitoring retail spaces or preventing break-ins.
Employees can go a long way in preventing losses caused by human error. They can unintentionally contribute to profit losses by mislabeling items or by making simple accounting errors or other preventable mistakes. Proper training and cultivating a workplace culture where employees feel valued can have a positive impact on loss prevention.
Organise items to keep them out of reach. Some retailers keep commonly stolen items protected in locked cabinets, with spider wrap, or behind counters. Position staff strategically. The more staff members you have around the store, especially near popular items, the harder it will be for someone to take those items—or to get away with them if they do try to steal them.
Modern technology solutions can also help protect against fraud. Modern technology solutions use data from common transactions such as item returns or discounts to identify patterns and detect fraud. Using AI and machine learning, technology solutions can help make you more informed and efficient to help protect your business.
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