Most independent retailers would say business is personal. Whether it’s stocking the shelves with the latest products or training employees to provide next-level customer service, retailers are doing more than lining their pockets. However, if a retailer isn’t aware of the threats that surround their business on a daily basis, all their hard work will hit them where it hurts—lost profit dollars.
Hardware Retailing spoke to Bob Moraca, vice president of loss prevention for the National Retail Federation (NRF) to get a better understanding of internal and external theft in a retail operation and why retailers need to protect their business from all sides.
Hardware Retailing (HR): Why should retailers prioritize loss prevention?
Bob Moraca (BM): Retail store owners put their lifeblood and sweat equity into their business. They want to create a profit to take care of their family and employees. Establishing a strong loss prevention procedure will help avert profit loss to retail criminals. Loss prevention can’t be ignored.
HR: What can retailers do to address internal theft?
BM: Retailers should invest in a good digital closed-circuit security camera system. These aren’t as expensive as they were in the past. They also provide peace of mind, as retailers can do a remote look-in to see what’s going on even when they’re away from the operation by viewing a live video recording through an app on their phone.
If an employee argues the retailer doesn’t trust them, that’s because they can’t give them full trust. In fact, a retailer may bring someone in, train them and treat them like family only to discover the employee is committing fraud. I encourage owners to have tight control of their operation no matter who they employ. Do a local background screening on all new hires. Always rely on dual control for things like finances. Don’t have the same person who is the bookkeeper rectify the books and checks. By utilizing two people for a system of checks and balances, you can better prevent internal theft.
They can also use their POS system to track employees ringing up sales, showing red flags like voids and returns or other differences between employees.
HR: How can retailers protect their business from external theft?
BM: The best thing a retailer can do to prevent external theft is to think globally but act locally. I’d recommend building a relationship with local law enforcement. Offer police officers a discount so they visit more often. By building these kinds of relationships, officers might stop by in uniform, sending a message to potential thieves.
Using electronic article surveillance on items like power tools is another way to prevent theft. If you make it difficult for thieves to steal, they’ll go elsewhere.
HR: How can retailers track loss prevention?
BM: Retailers need to understand inventory control and their shrink rate. It should ideally be under 2 percent of sales. Perform an audit to determine where losses and potential vulnerabilities are in your operation. Keeping track of these details will ensure you know everything that’s happening in your business.
Bob Moraca is the vice president of loss prevention for the National Retail Federation (NRF). He is responsible for directing NRF’s loss prevention and asset protection research, initiatives and programs including NRF’s annual loss prevention conference, the NRF Loss Prevention Advisory Council and the NRF Investigators’ Network.