Loss Prevention Basics

By Steve Di Orio
Posted in Store Management
On May 16, 2012

If you’re a retailer, loss prevention needs to be a high priority for your store. Any product that finds its way off the shelf through any means other than a sale is equivalent to money lost that you will never be able to recover. Loss prevention needs to be a consideration in all facets of the store, even elements that are apparently unrelated such as store layout and design.

The goal of loss prevention is to minimize pilfering. Pilfering can refer to all missing goods. There are several sources of pilfering. Probably the first to come to many people’s mind would be shoplifting. Items are stolen from American store shelves approximately once every five seconds. However, shoplifting is only one type of loss and is not actually the most prevalent threat to store stock.

The biggest threat does not come from outside of the store. It manifests itself from within. 70 to 80 percent of all retail shortages are commonly attributed to dishonest or careless employees. These can include employee theft, items damaged due to carelessness, undercharging goods, clerical errors, and inventory mistakes. You need to keep an eye on employees to make sure they are not wittingly or unwittingly hurting your company.

Stopping Shortages

The first step to limiting shortages is properly training your employees. Many mistakes are made in inventorying, stocking and selling products that can be prevented if your employees understand the correct procedures. By making a concerted effort to train and continue to train your employees, you not only will have a better workforce, you will have a more efficiently run store with limited inventory and clerical shortages.

Next, limit shoplifting and internal employee theft. The key to limiting theft is visibility. Make sure that all aisles and corners are visible. Shoplifters seek out secluded areas to pocket products when no one is looking. Make sure your aisles are open and you utilize mirrors or cameras to see into blind spots.

Make sure your store is always manned. An employee always has to be on the floor to discourage theft. If you can afford it, having multiple people on the sales floor will further help discourage shoplifting and employee theft. With employees, make sure that they do not bring in heavy bags and other articles that they can use to sneak products out of the store.

Always be vigilant in looking for ways products can be lost in your store so that you can find a solution. A store that minimizes loss is more likely to be profitable.

Steve Di Orio

Steve Di Orio


Steve has been with Handy Store Fixtures for over 15 years. After becoming the Marketing Manager in 2006, he was named Director of Marketing. Steven earned his MBA from Montclair State University with a specialization in Digital Marketing in 2019. When not at work, he loves to travel, play golf, exercise, and talk all things search engine marketing and retail display tips.