According to the National Retail Association, retail crime such as shoplifting, vandalism and robbery cost Australian businesses up to $9 billion each year.
These theft-related occurrences have a flow-on effect, not only directly impacting the company's earnings but also increasing the cost of items to clients and, in the long run, reducing the attraction of retail areas to customers.
Currently, the market size, measured by revenue, of the Australian Hardware and Building Supplies Retailing industry is $26.8 billion, with tool and construction equipment theft estimated at around $650 million per year (inclusive of on-site, in store, home and car theft).
A significant factor contributing to these increased thefts is the economic recession across Australia and New Zealand.
According to a Griffith University research report, as unemployment and underemployment increase, more people will likely feel financial pressure, which could lead to an increase in theft and fraud incidences.
Businesses must work smarter and do more with fewer resources, creating obvious deterrents for potential offenders through profit protection methods and visible security systems. This will help prevent theft opportunities and avoid loss prevention stresses in an already pressured economy.
To help reduce crime opportunities, business owners should consider key factors in situational crime prevention and stop the crime before it occurs in the first place.
- Increase the effort: Make offenders spend more time or energy to commit the crime successfully.
- Increase the risks: Make offenders take more risks with an increased chance of getting caught.
- Reduce the rewards: Marking, monitoring or tracking products to make them less desirable for reselling.
- Reduce provocations: Reduce frustrations and stress at the business to avoid disputes and reduce emotional arousal.
- Remove excuses: Prevent offender justifications like "I didn't know" or "there were no signs".
Sheffield Group's 5 tips to improve loss prevention in your store:
- Having a single entryway: Multiple entrances and exits make it harder for staff to keep an accurate customer count, but offenders also have more ways to escape. Retail theft is more likely to occur when stores are crowded, surveillance is low, and there are multiple avenues of escape.
- Security systems: Overt security devices will help deter unwanted behaviour. Devices such as cameras with visible signage, Electronic Article Surveillance (EAS) devices at doors, convex safety mirrors, light motion alarms, hang sell and locking hooks, and security tags and box wraps are recommended. Public display monitors and security systems reduce theft by up to 80 per cent.
- Digital inventory: By using a point-of-sale system (POS) and keeping a digital inventory of all in-store products you will be able to keep track of stock and anything that mysteriously goes missing. A POS system also helps employees catch fake returns, ensuring customers obey the store's return policy.
- Store organisation and procedures: Some store procedures and policies can be implemented to ensure smooth sailing for you, your team and customers. Some examples include requiring receipts for returned items, having a solid return policy in place, and making sure the majority of your store has maximum visibility. This can be implemented by creating colourful, bright displays that aren't too tall, and avoiding large clusters of products.
- Train staff to recognise theft and prevent employee-related loss: Staff should be trained to recognise signs of shoplifting. Staff should also learn to catch return-fraud and handle products properly. Retail loss can also occur due to intentional or unintentional employee errors. Employees who aim to steal may take items, create fraudulent returns or steal credit card information from customers. To avoid employee-related losses, take care when hiring new employees and get professional references whenever possible. Also, ensure that all team members receive adequate training to prevent unintentional losses from shoplifters or colleagues.