What’s Your Loss Prevention Strategy?

From video equipment and artificial intelligence to tried-and-true best practices, retailers are using a range of solutions to combat theft.

Howard Riell • Contributing Editor

Retail theft remains a key concern for retailers.

As infl ation looms, organized retail crime (ORC) is on the rise, causing the U.S. Chamber of Commerce to call it a “national crisis” and ask Congress to take action. It’s not only large retailers being impacted. Some 54% of small business owners saw an uptick in shoplifting in 2021, according to the U.S. Chamber of Commerce. What’s more, ORC cost stores an average of more than $700,000 per $1 billion in sales in 2020, a rise of more than 50% in the last fi ve years.

In other words, it’s never been more important for retailers to improve their security tactics.

Technology is helping retailers step up their loss prevention strategy, according to Chris McGoey, principal of McGoey Security Consulting in Los Angeles.

“Video surveillance equipment is better and cheaper,” McGoey said. “Inventory control is easier with scannable SKU numbers on most items. Technology can help a lot by analyzing point-of-sale (POS) and video software algorithms. Proper POS programming will detect employees who do not ring sales within expected ranges by shift and day of the week.”

SIRENS AND STROBES

As prices rise, cases of cigarettes have become an increasingly attractive target for thieves. “Right now, due to tax increases on tobacco, cigarette break-ins have become more frequent,” said David Moewes, asset protection manager for Boulder, Colo.-based Smoker Friendly, which operates 180 stores in eight states, including 15 Tobacco Depots in Florida. “It’s not just one or two cartons like it used to be. Now they break in and take cases of cigarettes.”

What Smoker Friendly has done is add sirens to stores’ alarm systems, as well as strobe lights. Indeed, several manufacturers have begun making cameras with sirens and strobes built in. Once they detect motion the lights and siren sound off.

“This has been a great deterrent for several locations we operate in,” Moewes said. “When all else fails, we have gone to a roll-down steel door. These systems can cover the entire glass and doors to the store. Very expensive, however it works very well.”

Moewes’s advice to colleagues is to always keep cash secured in the safe rather than left out, keep the cash in the registers to a bare minimum and don’t leave safes open all day long.

“Take the deposit to the bank immediately. Place the deposit back in a purse or other bag so that no one is aware what’s inside,” he said.

Put your orders up and on the racks and shelves as soon as possible. “That way no one can select a case and run out of the store with it,” he added.

TRAINING & INVENTORY CHECKS

At Lou Perrine’s Gas and Grocery in Kenosha, Wis., which opened its second store in April, grab-and-go products such as candy bars and foodservice items are the primary targets for thieves.

“Years ago our biggest theft item was fuel, but we went all pre-pay years ago,” said Anthony Perrine, the owner of Lou Perrine’s Gas and Grocery. “Periodically, someone will scarf down a hot dog or something when no one is looking. We have had just about everything you can think of stolen by someone, but the main items are anything small that can fi t in a pocket.”

Stopping theft begins with ensuring associates have proper training on how to prevent, detect and report it, noted Steve Boyd, loss prevention vice president for the Army & Air Force Exchange Service (AAFES), which operates 589 Express convenience stores and 122 main Exchange stores.

“Expresses also review inventory adjustments for indications of loss of product, and highly pilferable items are displayed within sight of cashiers,” he added.

Many Express stores have CCTV recording for security and theft-detection purposes. High-value items may also have electronic article surveillance (EAS) tags. Analysts study cash register reports and POS data to ensure cash register compliance and identify any anomalies.

fast facts:

• Retailers employ a number of tactics to reduce theft, from training and surveillance to best practices in cash handling and inventory management.

• As the cost of loss prevention technology such as video equipment comes down, more retailers are able to take advantage of these solutions.

FRICTIONLESS BENEFITS

Recently, Perrine has been speaking with artifi cial intelligence (AI) companies about creating a frictionless store, which would go a long way toward preventing theft. More than just self-checkout, frictionless retail offers a seamless ecosystem of shopping experience that incorporates checkout and payment options, real-time customer service and consumers’ delivery preferences.

“Technology like AI checkout or cashier-less stores can reduce theft in c-stores,”confi rmed Ken Morris, managing partner in Cambridge, Mass.-based consulting fi rm Cambridge Retail Advisors. “All products are accounted for and recognizable. Users are also identifi ed upon entry and exit of stores.”

“The only way you can get into the store would be by having the app; the technology automatically recognizes you and charges you accordingly,” Perrine explained. “The cameras tie in at the check-in or checkout point with everything you have purchased. You can have cashiers, and you still need employees for stocking shelves and handling age-restricted items, but it’s almost like trick or treating, where you walk in, take what you want and walk out.” CSD