OK you just figured out that you need a Loss Prevention Consultant! What now? Many people hold themselves up to be loss prevention consultants. What does a LP consultant do? There are a number of specialties in LP: shoplifting, employee theft, inventory control, LP training and auditing just to name a few. Sometimes safety falls under LP.
Quite a few people that consult in LP are generalists in most of these areas. Consider narrowing your search down by thinking carefully about what your needs are. For example loss prevention consultants who have auditing development skills can help you control losses by identifying and preventing shoplifting, theft, cash shortages and more.
Auditing is proactive. A LP consultant should design an audit to hunt down the causes of loss and bring them to the surface. Upper management then can make procedure changes that increase profitability. Audits should then be done on a regular but unannounced basis. All results should go directly to Senior Management.
Another proactive way loss prevention consultants assist businesses with is Training. LP training should target all employees from entry-level to middle management. Topics can include inventory control, vendor fraud, employee theft identification and prevention, dealing with employee theft, shoplifting, pre-employment interviewing and more.
A seasoned loss prevention consultant should have a minimum of 15 years of experience in several major companies. Ask for letters of reference or referrals. You should discuss their experience with them at length. Does this person fit with your business model and goals? Watch for individuals that talk like a police officer. A true LP professional is a businessman not a policeman.
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Retailers are keenly aware that when they prevent theft they will at the same time increase profits. Because inventory shrinkage figures into operating costs, reducing inventory losses will boost profits. You might be surprised to know that another benefit is reducing inventory shrinkage will also increase sales numbers.
A recent survey conducted by Price Waterhouse Coopers studied a supermarket chain tracking 98 unique product sku’s. The first four weeks they measured inventory shrinkage to set a baseline. At the end of the four weeks a Checkpoint Security System was installed to prevent theft and it included pedestal antennas at entry / exit ways that react to tags, labels which look like bar codes, “keepers” which are plastic transparent boxes that deny product access and hard tags that are pinned to merchandise and the 98 sku’s were measured for ten weeks.
What they found was surprising; not only did they record a remarkable reduction of 69.79% in inventory shrinkage but additionally measured an increase in sales of 9.2%! This proved the theory that if you prevent theft you will naturally sell more product. The reason is simply because there is more product available for sale, which proves keeping shelves stocked with product and available for sale is critical to building profits.
The PWC survey focused on how to prevent shoplifting. This is mostly incoming “customer” traffic taking product out the front door; however, some employee theft goes out the front door too.
There are many ways to prevent theft in retail environments as well as many types of theft to consider when designing a loss prevention program.
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If you are not aggressively trying to prevent shoplifting in your retail store your profits will suffer. Shoplifters are not going away. In fact as un-employment continues to be high and the economy remains unstable a higher percentage of people are shoplifting to get what they need and want. We also know from studies that shoplifters shift to unprotected retailers.
From experience, I know that when shoplifters know that you are an easy target they will hit you over and over. Shoplifters will also tell their shoplifter friends about your store (“Hey they are asleep at the switch in there. They are clueless”). Over time you become “the store of choice”. Without realizing it your profits get slowly worse.
What measures do you take to prevent shoplifting?
- Training!!! Have an Anti-shoplifting training program. Doing it once feels good for a while but like any other business issue unless you make it a priority your employees will loose interest over time. You have to refresh and train new people.
- Install a Checkpoint Electronic Article Surveillance (EAS) system. Label and tag a select group of merchandise. EAS is a labor multiplier. Spend less labor dollars to cover the same amount of sales floor. Shoplifters are caught at the door. This creates deterrence. Word will get around.
- Don’t be afraid to approach suspected shoplifters. Their goal is to be anonymous. Let them know you are aware, see and are helping them. Shoplifters hate customer service. Give them their fill! If necessary stand right there with them providing exceptional customer service.
Waiting to prevent shoplifting is like hoping that engine knock in your car will get better on it’s own. YOU can fix the problem. Step back and objectively look at your operation now. You might be surprised what you see.
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