Loss and shrink can have a severe impact on store profitability and performance, which can extend to your overall customer experience. Loss prevention services, then, are critical to success, but the different facets and ways a program can be implemented can be challenging to understand. Here are answers to some of the most common loss prevention questions.
How Frequently Should I Conduct Loss Prevention Audits?
When investing in loss prevention services, the goal, of course, is to maximize your results with minimal effort and resource cost. A Global Retail Theft Barometer survey found that companies that conduct three loss prevention audits per store per year return the best shrink results.
You’ll want to conduct frequent loss prevention audits for a few reasons: First, more frequent audits allow you to identify and correct deficiencies early on before they become an even larger problem. Your employees will also be more likely to perform with greater care when they know they’re being evaluated. Ultimately, by conducting frequent audits, you’ll create a culture focused and practiced at reducing loss.
How Can I Detect Loss Early On?
In loss prevention, we rely heavily on the big alarm functions, such as investigations, auditing, and awareness, as they are critical tools for shrink reduction. The smaller alert vehicles, however, can augment these larger practices and provide information that allows us to better manage resources and to react to potential losses sooner. There are four specific alert features we can employ to improve performance and restore security:
- Security store visits (SSVs) review the most critical information that’s most likely to flag potential dishonesty or disaster. The questions focus on the high-risk transactions and activities, such as refunds, cash control, deposits, and shipping and receiving. SSVs can be very successful in rooting out bigger issues and uncovering information that leads to investigations.
- Statistical snapshots compare a store’s performance numbers to the company averages in order to highlight those performing outside the normal company range. We can compare things like refunds and sales to identify those outside the norm, watch trends, and make inquiries as to causes.
- Mystery shops are an excellent, low-cost method to expand reach and visibility. Long used to gauge customer service, mystery shops can also provide important loss prevention information. Crafted questions can give insights on floor coverage, employee-to-customer cash interaction, cash handling, and the state of ticketing or EAS tagging to alert us to locations that need extra attention.
- Key performance indicators provide a historical reference and allow us to see individual issues or recognize negative trends or sudden shifts and activities. Average refund dollars, cash shortages, and late deposits can be some of the most telling categories for identifying potential loss issues.
How Can I Calculate Shrink Percentage?
In order to calculate shrink percentage, you need to subtract your book inventory (what you should have in the store) by the results of your physical inventory (what you actually have in the store). Then, take the value of the lost items and divide it by the sales during that period to find your shrink percentage.
Book inventory – actual physical inventory = total loss
Value ($) of loss / total sales during period = shrink %
How Quickly Can Loss Prevention Services Be Implemented?
When you partner with HS Brands for loss prevention, our solutions are ready to be implemented immediately. With in-house teams and contracted professionals located around the world, we can begin to tackle critical issues as early as the next day to ensure your brand is best protected. From there, our comprehensive loss prevention program—from loss prevention audits to theft resolution to policy development—will typically take about 30 days to fully implement.
Why Do I Need a Loss Prevention Program If I Don’t Have a Problem?
Every business has some shrink, and it may be affecting more than just your bottom line. The average inventory shrink percentage in the retail industry amounts to about 2 percent of sales worldwide, representing an $100 billion annual loss for retailers. Loss prevention not only reduces profits but can also have a negative impact on customer experience.
What If I Already Have a Loss Prevention Program?
Retailers often struggle to quantify shrink and lack actionable performance reporting and predictive tools. That’s why many brands will either outsource their loss prevention program or co-source some of their loss prevention services to HS Brands. We’ll work with your team to refine your existing program and policies and develop new ones to strengthen your loss prevention program. Our specialists have the expertise to help your team execute its program, whether it’s through our auditing services, data-driven solutions, or theft resolution practices.
Isn’t Shrinkage Hard to Prevent?
The short answer: Yes. But that’s doesn’t mean it’s not possible. When our loss prevention program is embraced and executed, we’ve helped brands reduce and prevent shrink, even those struggling to break the 2% mark.
Is Your Loss Prevention Program Customizable?
Our staff of industry experts have decades of experience in their respective fields and remain actively involved in researching and implementing new trends to provide the level of guidance and customization required to meet your unique goals and exceed your expectations. In addition, our powerful Aegis software offers a customizable dashboard to let you see all your information in once place.
Who Do You Work With?
HS Brands partners with retail brands and restaurants around the globe. We’ve worked within the automotive, gaming, entertainment, retail, and quick service restaurant (QSR) industries to provide loss prevention services to the world’s favorite brands.
Loss Prevention Services
HS Brands’ loss prevention services are designed to take an objective approach to combating employee theft for retailers, restaurants, and franchises. We’ll work with you to build a complete loss prevention program—from audits to program and policy development—to meet your goals and protect your brand.
In addition to loss prevention, HS Brands offers mystery shopping and royalty assurance services to provide holistic assessment and verification of your expectations.
Contact HS Brands today to see how we can resolve and prevent theft in your workplace.
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Raymond Esposito
Director of Business Development & Marketing
HS Brands Global
Raymond Esposito has over 28 years of loss prevention experience, working within the department store, specialty, and grocery segments of retail. He has developed loss prevention programs for over 125 retailers in the U.S., Canada, and the United Kingdom. He holds a bachelor’s degree in psychology from the University of Connecticut and is an expert witness.
