What is loss prevention?
Loss prevention is the strategic approach businesses use to reduce and prevent losses to their assets and revenue. These losses may result from theft, fraud, operational errors, or other risks. Through a combination of policies, procedures, and best practices, loss prevention helps protect company resources, improve operational efficiency, and support long-term profitability.
Why is loss prevention so important?
Loss prevention is a form of risk management focused on maximizing a business’s profitability by identifying and controlling preventable losses.
Theft is a major problem for small businesses, but while it tops the list of threats, it also happens to be one of the most preventable hazards. Small business risks are everywhere, and you need to stay one step ahead — are you doing enough to protect your company? Here are some tips to keep your assets and inventory safe from sticky fingers.
Are your employees taking advantage of your vulnerabilities? Consider these 10 tips to prevent employee theft from decimating your bottom line.
According to Statistics Canada, rates of shoplifting jumped 31% in 2022 compared to 2021. The Retail Council of Canada (RCC) says some of its members are reporting a 300% increase in thefts since 2020, pegging the losses at $5 billion a year. Thieves tend to target items that are transportable, in demand, and easily sold for cash — think alcohol, power tools, ATVs, cigarettes, truck tires…the list goes on. Fortunately, a little foresight and planning can go far to building an employee loss prevention strategy to protect your stock, and you likely don’t even need to invest in high-tech security to see good results.
Three steps to help you build a theft prevention strategy
Loss prevention can take different forms for different businesses, but the name of the game is to make it difficult or unappealing for thieves to try and steal your goods. There are three general points to consider when addressing your risk and choosing a solution:
- Review all your stock to establish the items thieves might target. Consider the value and general appeal of your inventory, but also how easy it may be to get away with swiping an item or two. Once you know which items are likely attracting undue attention, you can work to rearrange your stock in your favour.
- Identify the techniques thieves may use to steal your goods. Would criminals tend to “smash and grab” or cut your locks to get at your wares? Is your alarm system less effective than you might imagine? Maybe your shop is more inclined to crimes of opportunity — are your employees on the floor keeping a trained eye on things?
- Figure out how to best prevent the theft. There are many theft prevention strategies, and not all are created equal. Match the solution to the problem for a more effective defense (and a better use of your money).
The third item is the crux: it can depend on the type of stock, the techniques identified in step two, and your current theft protection strategies. Once you have a better idea of your particular risk, you can consider all the loss prevention strategies at your fingertips.
How to prevent theft in retail stores
Sometimes, “aggressive hospitality” is the best way forward: being extra attentive and forthcoming in your customer service might be enough to deter some casual would-be-thieves just looking for an easy target. In other cases, putting tangible security measures in place may be a better strategy. Here are some common and clever ways to bolster your building security:
Keep valuables out of sight
Avoid placing merchandise or valuable items near windows and doors where they can be easily seen—and targeted—from outside.
Limit sales floor inventory
Display only a minimal amount of merchandise in your sales area to reduce potential losses.
Secure your stock
Use locks, chains, and closed-loop alarm cables to secure high-value items.
Store stock safely overnight
Move inventory to a secure, indoor location when the business is closed.
Install a monitored alarm system
Choose a system with motion sensors, glass break detectors, and door contacts for comprehensive coverage.
Use CCTV cameras
Closed-circuit television helps deter crime and provides valuable evidence if an incident occurs.
Add fog security
Fogging systems can instantly obscure vision during a break-in, preventing thieves from targeting merchandise.
Alarm outdoor areas
Protect fence compounds and other external storage areas with perimeter alarms.
Leave lights on
Keep some interior lights on overnight to create visibility and discourage intruders.
Use exterior lighting
Well-lit exteriors make it harder for thieves to approach unnoticed.
Reinforce windows
Install security bars or apply security film to windows to slow down or prevent forced entry.
In many cases, you can use more than one security measure easily and without much investment in specialized equipment. Think about how many theft prevention strategies you could incorporate in your space — the better you prepare now, the better your chances of avoiding a costly merchandise loss.
Ensure that your business is protected
However, your efforts aren’t a guarantee, and if you fall victim to theft despite your best efforts, you’ll want a safety net to keep your business going. The right small business insurance can make sure the thieves don’t devastate the business you’ve worked so hard to build.
