Last Updated: May 11, 2022

We recently wrote a piece on how EMV chips have drastically reduced credit card fraud. But what about retail theft? In 2019, retail stores lost $62 billion to theft, a significant increase from the past year.

The problem is particularly poignant for smaller merchants. Large operations can afford to both beat these losses and pay for more advanced security. But small businesses can be severely compromised by even more minor thefts, especially if they operate on lower margins. For instance, if a business has 10% margins and gets $200 stolen, it will take $2000 in sales to replace that stolen $200.

So today we’ll go over some retail theft prevention tips that focus on how small and medium-sized businesses can fight the shoplifting problem more easily and affordable. By setting your store up with the right tools, technology, spacing layout, and staff training, you can significantly decrease your potential loss to retail theft.

5 Retail Theft Prevention Tips

1. Analyze Your Store Layout
2. Easy Theft Prevention Devices
3. Educate, Train, and Manage Your Staff
4. Prevent Retail Theft with Your POS System
5. More Advanced Anti-Theft Technology

Analyze Your Floor Layout

In other blogs, we’ve looked at how managing your retail space is an important way to increase your average customer spend and to help with store promotions. But proper management of your real estate can also minimize opportunities for theft.

1. Keep a clean and organized space. Not only is it good inventory practice to keep a clean floor, but it’s also important for managing theft. It’s easier to steal from cluttered areas where a missing item will hardly be noticed.
2. “Face” all product shelves, meaning each row has each item faced in the same direction.
3. Make your floor space as open as possible. This makes the shopping experience more pleasant and allows you and your staff more visibility.
4. Keep aisles short and displays low. Eliminate areas in which thieves can hide.
5. Place the checkout and POS system near the exit door so every person leaving has to pass it.
6. Keep small, expensive products behind the cash register or glass.
7. If you’re an apparel retail store, keep dressing rooms locked so customers have to request to use them.
8. Finally, think about your layout from the perspective of someone trying to steal. Maybe bring in an outside perspective and identify any problem areas.

See also: Retail Marketing Strategies for Your Small Business

Easy Theft Prevention Devices

You don’t necessarily need to invest in state-of-the-art technology to keep your store secure. Small additions can do a lot to deter theft.

1. Signage is critical. Think about homes that have their burglary system sign right outside the front door. Even if you don’t have a serious system, make your customers think that you do. Signs can notify the presence of a security system or can also warn of potential consequences for offenders. Keep signs near the front, or up high on the walls. You can check out other digital signage tips as well for more ideas. 
2. Mirrors in your retail store’s corners and in other blind spots are disconcerting to anyone thinking about stealing. You also can’t watch every corner of the store at all times. Position mirrors so that your cashiers or door greeters can see suspicious activity.
3. Alert sensors between your doors are inexpensive and easy to set up. They don’t even need to be linked to censors in the product. Just a bell when entering or leaving serves as an added deterrent to theft.
4. Attaching items to display shelves is a popular way of avoiding theft of electronics. This allows the customer to try the product without you or a team member over their shoulder.

These tactics might seem like a lot of bark and no bite, but they are proven to significantly reduce retail theft.

Educate, Train, Manage Your Staff

Educate yourself for that matter, too! Learn what suspicious behavior looks like and teach your staff about it. Put in systematic procedures for dealing with specific situations, including what you’ll do in the event of a caught thief.

1. Look for suspicious accessories that are commonly used for theft: large bags, baggy clothes, strollers, and even umbrellas. Some retailers offer lockers for these items near the entrance.
2. Learn shifty behavior tendencies like loitering, nervousness, and those keeping an eye on your staff more than your products.
3. Keep dressing rooms attended by a staff member if possible.
4. Use customer service as a means of determent. Keep an employee at the door for greeting and checking for receipts.
5. Institute a strict and consistent return policy. Retail theft isn’t always people walking out with free products. Return fraud is rampant as well.
6. Internal theft is, unfortunately, a serious problem as well (75% of retail employees admit to stealing from their employer at least once). Treat your team members with respect and notify them of the consequences during training. This will instill a sense of loyalty and respect that will pay dividends in other areas of your business rather than simply preventing internal theft.

Prevent Retail Theft with Your POS System

Your retail point of sale can help with both prevention of theft, as well as identifying the source if someone was able to steal. Retail loss prevention from your POS is a critical tool for business owners.

1. Keep every product logged in your point of sale system so you can avoid price swapping. Switching tags is a common method of lowering the price on more expensive items.
2. Maintain a thorough and accurate inventory. Again, this is another retail best practice, but it also helps quickly identify troubling discrepancies. With advanced POS inventory software, you can easily track every product in your store from the time it enters until the sale is made.
3. Run retail inventory counts often. Consider a perpetual inventory counting method. Frequent inventory updates will help reduce shrinkage in other areas as well.
4. Your POS can also combat internal theft. With employee permission levels you can control who has access to certain actions, as well as the cash drawer.
5. Employee shift reports also highlight suspicious activity, such as a high number of voids, comps, discounts, or “no sales.”

The infographic below demonstrates the growing problem of internal theft. Source: National Retail Federation

More Advanced Anti-Theft Technology

While not an option for many small merchants, anti-theft technology is quickly becoming cheaper and more accessible.

1. Product tags are becoming more ubiquitous. It’s relatively easy to install a chip in more expensive products. These chips will trigger a door alarm unless deactivated at the checkout. Tagging every product might be a bit excessive, however, and could also lead to longer checkout lines.
2. Cameras with video analytics are also increasingly popular. Smart technology can identify odd behavior and consolidate suspicious footage, saving you the time of reviewing hours of video.
3. Electronic audio surveillance (EAS) is a more advanced way of tagging products. It uses radio frequency or electromagnetic fields to alert sensors.
4. Install software in expensive electronics that prevent any usage after the theft. Many cell phones, for instance, are either incapable of use or extremely difficult to use if stolen.
5. RFID chips are most likely the future of retail shopping. With a mobile wallet and chipped products, every item leaving the store will automatically be paid for as it passes through sensors. Of course, Amazon Go has already successfully employed this method.

Any More Retail Theft Prevention Tips?

Let us know what has and hasn’t worked for you. Many of these strategies depend on the type of retail store, after all. But hopefully, this was helpful in giving you some ideas on how to cut back on theft. For more information on how your point of sale can be of assistance with this, click below to talk to our amazing team or sign up for a free trial of our anti-theft software.

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