Benefits of a Loss Prevention System

Most retailers in the United States end their fiscal year on December 31st. and begin the New year with a new budget, new goals, and new strategies to implement in their business.  

For the loss prevention team or management of the store, allocating sufficient funds to the prevention of shoplifting and security of their store begins anew.  If a store has not purchase a loss prevention system and the losses of the store are too many to ignore, the new year allows them to budget and purchase a system that will help them minimize their losses and prevent them from happening in the future.

Research has shown the budget for the prevention of shoplifting and loss prevention teams have been declining over the years with no plans to change it, while the problems associated with shoplifting, employee theft, internal clerical issues and lost merchandise continue to grow.  Every retail store has different problems associated with them, but shoplifting is a problem that is common for every one of them. 

Allocating enough funds to the prevention of theft in your store is vital. According to research purchasing a loss prevention system to help you minimize the losses in your store will return your investment within months. Reduction in merchandise losses, increase productivity, personnel reduction, and an increase in sales are some of the benefits associated with the purchase of a loss prevention system that will see more profits going to you.

Finding out what kind of loss prevention system your store requires will need the help of a seller that understands systems, training and prices. 

An EAS system can give the store an up to the minute understanding of what merchandise is in the store, what items have been sold, and what merchandise is missing. These systems can let you know up to the minute information about your store without having to do a physical count every time you need to know something about a specific item.  With an EAS or a point-of-sale (POS) system, information about the merchandise in your store is within your grasp within minutes.

Investing in technology that can help your management and loss prevention teams work effectively while minimizing cost will help your store succeed.  These systems not only offer help in deterring shoplifting but help you meet the needs of customers and their shopping habits.

Preventing shoplifting in your store with a loss prevention system is key to your success.


I recently read over an article opining the phrase “sales cures shrink”. While the author touched on both sides of the coin, I found it interesting that in today’s retail climate, anyone would think that you can simply sell your way out of losses. Let’s cut to the chase here; we’re not bringing in 20% increases over last year, hell we’re lucky to come in flat to last year. Online giants like Amazon are eating up market share like never before and if brick and mortar don’t do something fast, sales will continue to slump.

Let’s break this down a bit further. Let’s say your shrink last year was 2% to your sales of $1,000,000. That’s a loss of $20,000 for the year, or about $57 a day. Taking that shrink number and dividing that into your loss per day gets you right at $2680. That means you have to sell an additional $2,680 on top of that $57 loss just to get to the break-even point. Understand this, you CANNOT stay in business if all you’re doing is breaking even. You just can’t. You need to turn a profit!

Being a realist here, there is no way that you’re ever going to sell your way out of shrink. EVER. It is a flawed philosophy and if you ever hear someone utter this crummy phrase, understand that whomever that person is, they have no idea what they are talking about. Unless you have some miracle business model and you’re bringing in money hand over fist, then “selling your way out of shrink” just isn’t an option. It’s a start…

Offsetting shrink takes a multi-faceted approach. Just as you can’t sell your way out of shrink, you can’t very well keep everything under lock and key, and it’s impractical to have the security devices on every single sku. If you’re trying to increase sales, you may be inclined to have more displays of merchandise. Copious amounts of data show that a customer is more likely to make a high dollar purchase if they have a chance to touch and feel the item. (Think sunglasses, hunting scopes, sports equipment, etc.) To sell it, they have to be able to touch it. For you not to lose it, you need to secure it in some manner. Once you find the balance of sales vs. LP procedure, you’ll find the winning formula for shrink reduction.

Proper security measures will only go so far to stop external losses. Internal theft accounts for an even bigger percentage of losses inside your store. Knowing who to hire, and whom you are hiring are both vital spokes in the retail wheel of shrink reduction. You need to go a step further and encourage a culture of honesty, integrity and ethics in your store. Employees should feel invested in your business, as that emotional attachment will likely deter an employee from stealing.

As with any problem, there are always a multitude of solutions to bring about positive change. Get away from a soloed approach to shrink and look at all the ways your losses may be tackled. Just as you would be foolish to believe that locking up all of your merchandise would stop theft, you’re of equal foolishness if you believe that sales are the cure all for shrink; and I personally, pity the fool.