The Song Remains the Same

When it comes to loss prevention, the more things change, the more they remain the same. That’s one of the insights gleaned from a new study, Winning Trends in Loss Prevention: Benchmark Study 2008, by Retail Systems Research (RSR). Asked to identify the top sources of shrink, survey respondents overall focused on perennial concerns: employee theft of merchandise (70%), customer theft of merchandise (53%) and employee theft of cash (45%).

Organized-crime rings were found to be a growing concern of large retailers (defined as those with revenues of more than $1 billion). Forty-one percent of these respondents highlighted it as one of their biggest sources of shrink (vs. 21% of overall retailers). But they, too, believe employees are a far bigger problem, with 74% identifying them as one of the top three sources of shrink.

“These findings raise a real issue for retailers: How do you create a customer-centric experience when your core belief is that your employees—who are your company’s face to the world—and customers are stealing from you? There are two opposing forces at work here,” said Paula Rosenblum, managing director, RSR, and co-author of the report.

Despite the persistent thread of employee mistrust among survey respondents, the report recommends that retailers work on making in-store employees stakeholders in the business, and educate them on the cost of shrink and how it impacts them. It noted that even as these employees remain a primary source of shrink, they also are a first line of defense against it.

“If you can’t make them part of the solution, take a strong position on deterrence,” Rosenblum said. “Make sure employees know that you have tools in place that can help you catch thieves, from within and outside the organization.”

To obtain a copy of the full report, visit www.retailsystemsresearch.com/_document/summary/398 .