Retail TouchPoints reports that storeowners lose $54 billion each year to theft, or roughly 1.3 percent of their sales. Given how small retail profit margins can be, every penny counts.
The Houston Chronicle's small business resources point out that retailer profit margins vary from 4 to 12 percent depending on the type of goods you sell. That means that theft can take a huge bite out of your profit.
So how do you prevent theft? That's the billion-dollar question, quite literally. In this article, we'll look at four strategies you can adopt to thwart theft.
4 Tips to Help Retailers Prevent Theft
Retail theft can come from many places — employee theft, shoplifting, fraud — so your strategy will need to address it on all these levels. Here are four things you can do to prevent theft in your store:
2. Train your employees.
Train your employees to spot possible thieves.
If a customer is wandering around your store without purchasing anything, that's a warning sign. You don't want to accost these customers, but you should train employees to be active on your floor, walking up to customers checking with them, and asking if they can help them with anything.
3. Perform spot checks.
Perform spot checks.
The International Council of Shopping Centers suggests that you spot-check your registers during the day. By doing this, your employees are aware you'll likely notice if they try to pocket money or falsify any records. Being active and organized can go a long way to stopping employees from even thinking about stealing.
4. Know your problem areas.
Know your problem areas.
Return fraud accounted for 30 percent of shrinkage, employee theft was 37 percent, and shoplifting was 22 percent. You'll need to have a strategy that accounts for these problem areas and others that your business may face. In the next section of this article, we'll look at how software can make it easier to spot these problem areas.
This is by no means an exhaustive list of anti-theft strategies. In fact, one the best things you can do is stay current and avoid complacency. Join industry associations and read retail blogs to stay up-to-date with retail news (you can find our retail blog Retail Details here).
Your Best Anti-Theft Resources Might Be Digital
Forbes reports on some of the better inventory tracking apps and points out that this software is becoming more affordable, even for small retailers. Inventory tracking software can help you spot if anything fishy is going on at your store. Obviously, if inventory is disappearing, that's a sign of theft. But this software can help you in other ways.
Software that generates reports can help you…
- Identify products that have smaller profit margins or unexpectedly small sales.
- Spot potential problems, such as a list of voided checks, returns, and other areas that might be signs of theft or fraud.
As a general rule of thumb, the more organized you are, the more likely you'll be to catch signs of theft. Whether you're investing in new software, posting signs around your store, or double-checking employee work, as a retail storeowner you'll have to be on the ball if you want to protect your store's profit margins and prevent theft.