Three Ways to Create a Successful Loss Prevention Program
Although Loss Prevention professionals are becoming more and more savvy while working around the clock to deter crime within the retail industry, the same can be said for criminals advancing their techniques to commit fraud. In the NRF’s annual Security Survey, they found that the amount of money lost from robberies and shoplifting has continued to grow. In fact, in 2015, the about of inventory shrinkage was at 45.2B, which is up 1.2B from 2014.
With so much money at stake, there is no time for retailers to waste when it comes to protecting their assets. Here are three ways retailers can protect their company from fraudsters and build a successful loss prevention program:
Call in the experts. If you’re not sure how to address a vulnerability, reach out to your colleagues at other companies and others in your field. They can’t necessarily share their strategies with you, but they can provide you with recommendations for solution providers, tools, or programs that they’ve used successfully. Many are often scared to ask for help in this industry, but with things moving at lightspeed these days, it’s crucial to lean on colleagues with different areas of expertise.
Decide about metrics to track before a problem arises. Before a new promotion launches, gather your team and ask yourselves a few basic questions– • What could happen? • What is probable? • Do we have mechanisms in place to identify fraud? • What metrics will help us determine what downsides come along with an increase in sales? • How can we track all of the elements resulting from putting a promotion in place? Put systems in place ahead of time to detect fraud and capture the data you need. Oftentimes, the fraud element won’t be obvious immediately after rolling out the program, but once it’s up and running, and becomes highly visible to the public, problems often arise. Be prepared to identify and monitor abuse through the analysis of actionable data.
Weigh the risks vs. the rewards of a promotion. Focus on protecting profitability instead of preventing fraud. The benefits of some programs are substantial enough that it’s in the company’s best interest to accept a minimal amount of fraud. If a program that brings a high risk of fraud also causes an uptick in sales, instead of making sweeping changes to the program, see if there are ways to isolate and deter the individuals who are causing the problem. Don’t stop what makes the program successful by hiding the landing page or dropping the discount, simply look for ways to decrease the risk and increase profitability of the program, such as adding verification technology.
Want to learn more about how your company can successfully build a loss prevention program to combat fraud? Read 10 Loss Prevention Tips by Richard Mellor, loss prevention professional and former VP of Loss Prevention for the National Retail Federation.