BASIC GUIDE
TO LOSS PREVENTION
Introduction:
You might try thinking in terms of how much of your profit you are willing to give away. By not taking
preventive measures against retail crime you’re handing over your hard-earned money to criminals.
Decide how much you are willing to give them. Retail businesses lose approximately 2% of earnings
to shrinkage. Retailers who took no action toward preventing retail crime had between 100 and 200
percent more losses than the ones who implemented simple prevention procedures. Shrink has
been increasing steadily over the last few years. There are many reasons for the upward swing, and
some of them can be traced directly to the country’s overall economic condition. Retail crime presents
a real threat to profit and the ultimate well-being and longevity of a store.
Eliminating Inside jobs:
Get to know your workers. You don’t have to become best friends
with them, but by taking an interest in what goes on in their lives,
you earn their loyalty. People are less likely to steal from someone
with whom they perceive they have a personal relationship. People
who feel valued in a work situation tend to remain honest and
devoted to you. If employees don’t feel that they are being paid
what they are worth, they often are tempted to “make up the
difference”. Good discounts also help eliminate employee
resentment. If you make a locker available to each employee, there
is no reason that any staff member should bring his or her personal
items onto the sales floor. Require that any bags carried in that area
are see-through. Garbage bags should be see-through as another
method of stealing is to conceal merchandise in the garbage.
Management should keep an eye out for items that belong to one area but are found in another
part of the store, they might be en route to a hiding place(restrooms, above ceiling tiles or refuse
bins) for later retrieval by an unscrupulous employee. Employees should not be allowed to park
near the side or rear doors or the loading dock. Designate one door as the official entry/exit
location. Thefts of larger amounts of merchandise are often limited to senior management
personnel, whose responsibilities encompass inventory control. Owners and managers may want
to do their employees the favour of ordering certain equipment or merchandise directly from
wholesalers for personal use, these items should be paid for upon ordering so as to prevent the
age old excuse “I forgot to reimburse the store” One way to spot losses before they destroy your
business is by taking inventory regularly, both planned and a spot check basis, if you must use
your own staff to take inventory, have the members of one department take inventory for another.
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Handling Voids:
Fraudulent voids are committed when a cashier rings up a purchase, accepts the money for it, then
voids the transaction in the register and pockets the money. Alternatively, a dishonest cashier can
pick up a discarded register receipt, mark it “Void,” slip it into the register, and remove the equivalent
amount of cash. In either scenario, the register will tally with the amount of cash in the drawer at
the end of the day. To prevent this, a manager should be required to approve any voided transaction
in the customer’s presence.
Refund Control:
An employee can work with a friend who brings in an item and is issued a refund that is later split
with the dishonest worker. Or an employee can make fraudulent refunds on his or her own by
removing the cash from the register. To combat this, a manager should countersign any refunds. A
good technique that does double-duty as refund verification and customer service is to follow up
with mail or phone call inquiring about the customer’s experience. If the mail is returned, it’s an
indication that something is fishy. Likewise, managers should call the recipients. If they profess not
to know about having received refunds, something is definitely wrong. If the refunds are legitimate,
it offers managers an opportunity to impress upon the customer how important their business is
to the store.
Sweet-hearting:
This refers to a cashier who rings up sales for friends
or family members, but does not charge the full
price for these favoured customers. Cashiers can
ring up only one item out of several identical ones
that are presented; they ring up only the lowerpriced items; or they manually override the prices.
Managers should authorise all price overrides. A
good policy to prevent sweet-hearting is not to allow
a cashier to ring up purchases for his/her own family,
friends or for his/herself.
Cash Theft methods:
The easiest way for an employee to take cash is to simply do that – just remove it from the register
and slip it into a pocket. This method should also be the easiest to detect. If there is only one register
to which all employees have access – known as a “universal till” – then it may be harder to trace
the origin of the shortages. Another way that cashiers can steal is to short-change a customer.
Enterprising cashiers can also short other cashiers or supervisors when getting change for the register.
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Markers, Under Rings, and Unrecorded Sales:
One way that cashiers can take money yet still balance at the
end of the day is by under ringing sales. The cashier rings up
an item for less than its cost, but charges the customer the
full price and pockets the difference. Cashiers use “markers”
to keep track of the amounts they are under ringing(or voiding).
It can be coin that is slipped into the wrong tray (a copper
coin in a silver coin tray), each copper coin may correspond
to €5. The cashier will take out the appropriate amount of
money at the end of the shift to ensure the drawer tallies with
register total. The best way to combat this is to regularly do
spot checks, closing the shift and counting the drawers on a
random basis.
Suspicious Behaviour:
Sometimes an employee’s behaviour tips management off that all is not well. Any employee who
hogs a cash-handling job, or who copies over balance sheets “to make them look neater” is sending
a signal that his or her motives may not be pure. Likewise, a worker who refuses to take a vacation
or a day off may be sticking around to cover up a pattern of thefts. A chronic shortage of cash or
sudden signs of wealth can indicate that something is not right in an employee’s life. A worker who
is always punctual but now comes in late and calls in sick a lot; blood shot eyes; frantic behaviour,
mood swings can all be signs that something is amiss. A friendly inquiry in private is certainly
appropriate. If he or she does not admit to having any problems and the behaviour does improve,
managers must begin the documentation process.
Banking Procedures:
“Lapping” Skims cash from a bank deposit then uses the exact same amount of cash from the next
day’s deposit to cover the shortage. The only clue to the theft is a lag in the time it takes the bank
to process the store’s deposits. The best way to prevent this scenario is to split the cash sensitive
task among several staff. Cross-training improves efficiency and reduces opportunities of theft.
Managers should assign cash sensitive tasks to different employees each day without advance notice.
Under no circumstances should one person make a deposit alone. If the bank is in walking distance
another employee should follow the one carrying the bank bag and keep an eye out for anything
unusual, such as someone trailing or paying too much attention to the employee with the bag.
Should something go awry, he should call the police immediately. Taking a good look at the thieves
in order to supply a description of them, direction they fled, type and license number of the vehicle.
The time the deposits are made should vary from day to day.
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Shoplifting:
Floor employees are the first line of defence against shoplifters. Workers are the ones who are in a
position to spot someone who looks as though he or she doesn’t fit in with the store or the area.
Someone wearing an overcoat in the middle of summer, someone that appears nervous or ill at ease
or someone more interested in store personnel than in the merchandise. By requiring that a staff
member greet everyone who walks in the door, you will increase your security immensely. Make
eye contact. Thieves don’t want to anyone to be able to identify them and legitimate shoppers
appreciate the attention. Other clues that someone may be in the store to steal is that shoplifters
frequently fail to examine the merchandise they have in their hands at any given moment also people
who linger or appear to hang around may be casing the store, waiting for an opportunity to steal,
people who stay close to exits may also be preparing to grab something and head for the door.
In-store Protection:
More expensive items should be kept towards the rear of the store and away from the exit doors.
Merchandise should be kept in order at all times, so that if something is missing, employees can
spot the empty space immediately. Everyone should know the retail cost of items at all times so that
dishonest shoppers cannot get away with switching price tags. Keep displays low, ensure cameras
and mirrors are not blocked; shoplifter will recognise your limited visibility and will take advantage.
Cash registers should be located just inside the exit doors making the register hard to bypass without
paying and if someone makes a run for it with stolen merchandise the cashiers are in an excellent
position to get a description of the persons. Uniformed guards in the store may discourage kids and
amateur thieves, but professional shoplifters will not be fazed. It is also easy for workers to be lulled
into a false sense of security when guards are around, leading them to be less observant. Police are
often eager to come to the store to give employees crime prevention strategies and tips.
Telephone Tree and consistent prosecution policy:
Immediately after a theft, you call two shopkeepers, then they call two, and so. This way your
criminals know your suburb is proactive in preventing crime and stay clear of your community.
Thieves hang around with other criminals and they talk. If your store gets a reputation as an “easy
steal” all their friends will come to visit you – and these are not the “customers” you want to attract.
Put a sign up. “The Last 250 People Caught Shoplifting Didn’t Think Anyone Was Watching Either”
is often effective as a crime-prevention technique.
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