When you view loss prevention statistics, it is clear theft poses a major issue for all companies, regardless of size.
Armed with knowledge and modern technology, catching internal and external theft is easier than ever. But first, you must face the facts.
The Big Picture
In today’s competitive business environment, opening up a retail store is not a task for the faint of heart. Companies are constantly racing to meet customer wants and needs, while keeping profits high.
Theft equates profit loss, which forces businesses to lose money and even close down. Currently, 82% of all failed businesses have ceased operations due to a negative cash flow.
Both internal and external theft directly affect the customer. Retailers are forced to raise prices to compensate for profit loss. In return, customers may refuse to pay these prices and go elsewhere.
Protecting your company from theft is at the top of your to-do list, but theft is often embedded throughout your company. Employees are often overlooked as suspects of theft, yet they are the most damaging source of loss. The median time before workplace fraud is detected is 18 months.
When you consider the average employee theft cost per incident is approximately $1,203, you can see how it takes businesses months to recover.
Time theft is another source of loss, costing US employers $11 billion dollars annually. Lost productivity and poor time management can directly affect your bottom line.
One aspect of time theft is buddy punching. This involves one employee clocking in another employee so that they are being paid, even though they are not present at work. Buddy punching costs employers nearly $373 million on an annual basis.
Between cash register fraud to time theft, employee theft is a major but often overlooked source of lost profits.
In general, when we think of theft, we are picturing shoplifting. Consider the fact that 1-2% of all customers enter your store with the intent to shoplift and you’ll be spurred to address the threat.
Consider also the average cost per shoplifting incident is $559. When paired with the fact that shoplifters are typically caught on an average of only 1 per 48 times that they steal, the numbers start to look grim.
Companies must to stay up-to-date with technology and other loss prevention measures. This allows proactive businesses to combat shoplifting and external theft.
Return fraud is another leak in your profitability. On average, return fraud costs employers $1,766 per incident. Return fraud runs the gamut from printing duplicate receipts or changing bar codes, to shoplifting and then fraudulently returning goods.
And in yet another attack on profits, organized retail crime (ORC) has been rising each year. The reported value of ORC cases exceeds $200 million.
These harsh loss prevention statistics paint a dim picture of the future success of any retail business. But with foresight and effective loss prevention strategies, your retail establishments can flourish.
Technology and Training
Two effective strategies to combat the devastating number of loss prevention statistics are training and technology.
Every business wants a well-trained staff. And companies that invest in employee training enjoy 24% higher profit margin versus those who don’t. Proper training should be a cornerstone of your company’s loss prevention strategy.
Another key solution for stopping loss from both internal and external theft is technology.
DIGIOP has developed software solutions which allows employers to gather and analyze data involving internal theft, return fraud, and shoplifting.
With ELEMENTS, business owners can pinpoint exact incidences of theft and view the footage in real time. With CARBON, our case management system allows your Loss Prevention team to build meticulous cases with archived evidence.
When you review the startling numbers of loss prevention statistics, you feel discouraged. But with the right tools and the right partner, you can gain control of your business’s profitability once again.
Together we can transform your business.