Retail loss prevention techniques: A guide

As the business owner or manager of a retail store, you need to be aware of the potential for loss and shrinkage. In some respects, inventory loss has always been part of doing business. We don’t blame you if shrinkage is part of your yearly budget.

That said, you can be proactive in reducing shrinkage by implementing a loss prevention plan. You can limit the situations in which loss occurs with a focused strategy and buy-in from employees at every level.

Preventing theft, damage, and other errors that lead to loss has always been an area of importance for retailers.

Inventory loss in the United States has remained high over the years. In 2019, retail losses topped $60 billion. Retailers face greater challenges today than ever before. Traditional crime like shoplifting has long been difficult to stop. Organized retail crime and “smash-and-grab” robberies are on the rise.

Retail loss is a complex, multifaceted problem. The bottom line is that inventory lost robs your business of profits. Preventing loss can save you money and allow your business to grow—but the benefits don’t stop there. By implementing a plan to help you prevent losses, you can save money, improve employee performance through training, and better serve your customers.

Implement a loss prevention plan step 1: make loss prevention a core focus.

Loss prevention should become part of the culture at your business. From their first day on the job, employees must know that preventing loss is critical to your businesses’ success.

But how do you get to that point?

• Get management buy-in. Make it known that managers at all levels should see preventing loss as a priority. To set this in stone, give your staff access to training resources to increase knowledge and awareness.
• Make loss prevention just as important as sales. Sales keep your company in business, but losses cut away at the bottom line. Make it known that preventing loss is just as important as making a sale. Remember,if you have product to sell, it’s likely to sell eventually. If you lose product, you have nothing to sell and no way to recoup what is lost.
• Set loss prevention goals. By setting goals, you can monitor results and measure success. If issues persist, use them as teachable moments. Reward staff when goals are met and make your team feel like they are the solution not the problem.
• Consider hiring a loss prevention manager. A loss prevention manager can oversee strategy and work with your team execute a plan. Taking this step also shows your employees that loss prevention is serious.

Implement a loss prevention plan step 2: use technology built to prevent crime.

Retail security technology exists to address crime and prevent loss. But security technology comes in many different forms, and you may not know where to start. Let’s break it down.

Security systems

Retailers everywhere have invested in burglar alarms, security cameras, and access control systems to fortify their business. These systems do a great job at protecting property, products, and people—and with live alarm monitoring, you can take security to the next level. Live alarm monitoring is a service in which you get immediate help when an alarm goes off at your business. Trained monitoring agents work 24/7 to ensure your security. Fire or break-in? Alarm monitoring agents know right away and can dispatch local authorities when they are needed most. Monitored alarm systems make a big difference in terms of emergency response—it’s why you should avoid DIY security and go with a pro.

Electronic article surveillance

You can also use an electronic article surveillance (EAS) system to prevent theft. With an EAS system, you apply RFID tags to merchandise and put a detection system near store exits. When a customer purchases a product, the cashier removes the tag. However, if someone leaves the store with a product that still has a tag, the detectors at the exit will sound an alarm.

If nothing else, an EAS system can serve as a visual deterrent to theft because customers will know that they cannot remove items from the store without an alarm sounding. That alone can make the investment worth it.

Point-of-sale systems

Point-of-sale (POS) systems can help with accounting and inventory tracking. Most POS systems allow you to import your entire inventory so you can track inventory from the time you receive an order to when you sell the item. This means that all inventory data is right at your fingertips.

A POS system also gives you the ability to manage employees who work the register. You can give employees their own accounts to track of who is logged in and when. So, if inventory is missing from the store or cash from an employee’s drawer, you have a record of their work and can backtrack to find out what happened.

Implement a loss prevention plan step 3: organize the layout of your store.

Organizing the layout of your store might sound simple, but it’s something many business owners overlook. Think about large retailers like Target or Best Buy—what do they have in common? Products are toward the middle and back of the store. Registers at the front. Exits, protected by EAS detectors, beyond the registers. From a product security perspective, this type of layout makes a lot of sense.

You can better deter theft by organizing your store and properly positioning products. If you can, put the registers toward the front entrance or exit. This puts employees in a highly visible position to deter would-be thieves. It also means employees can  see the exit and call the police if a theft occurs. Here are additional quick tips:

• Put high-value items in visible locations and behind secure containers.
• Place displays that encourage customers to move through your store in a predictable way.
• Where possible, station employees in specific areas of your store so they remain visible to customers.

Preventing loss is a big challenge for retailers of all sizes. The concern has only grown in recent years. A loss prevention strategy is one of the best ways to curtail shrinkage. Take the time to set clear goals and expectations, and get management buy in. Explain the issues to your staff and make them part of the solution. Use security technology to keep an eye on your business and monitor inventory. And examine your store’s layout to increase security.

Taking these steps can go a long way in preventing loss. If you want to learn more about how a monitored security system can help, get in touch with Bay Alarm today!

Updated on: June 2nd, 2025