By Alicia Tarrance
The holidays are a season full of hope for profits for most retail companies. But one thing that always seems to keep that hope in check is retail theft. Shoplifters love to take advantage of the busy season and use this time as an opportunity for their sticky fingers to get a hold of what they may even wrap in paper and a bow as a gift for loved ones. This article will discuss why shrinkage is such a problem during the holidays and some ways to reduce it.
Shrink is a growing problem
Retail shrinkage has skyrocketed over the past few years, especially during the holidays. The National Retail Federation has released its 2022 Retail Security Survey stating retail shrink accounted for nearly $95 billion worth of loss last year, $5 billion more than the year before. Scorpian Security, the world leader in mechanical retail display security, says that shrink increases up to 81% during the holidays alone! What are the causes of this detrimental increase in theft over the past few years? And how can retailers put a stop to it?
Why retail crime is growing
During the busy holiday season, the more retailers focus on trying to stop shoplifting from happening, the less time they have to make more sales. Studies have shown that shrink has increased due to a shortage of workers. Inflation also causes prices to go up, leading to more theft, as well as bookkeeping errors and fraud within a company.
The growing theft rate is causing certain companies to close down locations or shorten hours, resulting in smaller profits. Shoplifting is only part of the shrinkage picture. Employees cause around 30% of shrinkage. How do shop owners combat retail theft if it’s right under their noses?
How to combat retail theft
Given our current information, let us dive deeper into ways to combat retail theft this holiday season. Keeping a coordinated schedule of staff and upcoming events can help businesses stay prepared for the busier periods that could lead to more theft. Prioritizing loss prevention training for retail staff and managers is critical as well. Keeping a working security system is essential. The costs it takes to upgrade your systems are nothing compared to the losses you can face if you don’t.
When it comes to high-priced electronics, the paradox is that retailers must let customers handle the merchandise to keep customers interested and sales high. Pete Gulick, Founder and CEO of Scorpion Security Products, explains, “There is definitely a fine balance between securing valuable handheld electronics and allowing a pleasurable consumer experience. At Scorpion, securing our customers’ products is priority one, but we also understand that the customer’s interaction with the product is integral to their buying decision. Therefore, each Scorpion is designed with security in mind, as well as a nice merchandising solution.”
Keeping a tight-knit protocol when hiring staff is imperative—running background checks and contacting references. Customers cause only 10% more shrinkage than employees do. Given that information, keeping a wary eye on your staff is just as crucial as trying to combat theft from others.
Providing reliable security tags on store items is a surefire way to give you the upper hand when trying to combat theft this season. Organizing a store layout conducive for employees to keep a close eye on the high traffic amount of holiday shoppers this season is also good advice.
Keeping track of stock with checks and balances is vital to determine where you can improve to prevent further shrinkage. Customers think they are geniuses when they find a way to cheat the system, like taking advantage of the return/exchange policy. If not done correctly, thieves are able to purchase an item for a short period and then follow to return them for full price with no explanation.
Theft of all types hurts companies and puts people’s livelihoods at risk. Unfortunately, retailers can not expect shrinkage and theft to halt suddenly. But putting effective security and protocols in place can drastically decrease how many dollars slip through the cracks. Bringing more awareness to the situation and, most importantly, acting upon it will significantly reduce your loss of profits in the future.
Alicia Tarrance is a budding writer and content creator focusing on technology, cybersecurity, and social issues. She is a regular contributor to Brilliance Security Magazine. Based in the American southwest, Alicia is highly sought after for her insightful commentary and sharp writing style. When she’s not busy crafting the next great article, she enjoys being a mom and spending time with her family.