Organized Retail Crime - Loss Prevention

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A major Issue in Retail Industry that’s continuously getting neglected.

An industry overview by Oaktree Retail Pvt Ltd

92% of retail companies were victims of organizedcrime activity during the past year, up 8percent from 2008.

Source - The National Retail Federation’s 2009 Organized Retail Crime Survey

DID YOU KNOW ?

CAUSESLets find out what are the main causes leading to organised retail crime…

1. EMPLOYEE THEFT

2. SHOPLIFTING

3. ADMINISTRATIVE ERROR

4. VENDOR FRAUD

1. EMPLOYEE THEFT

According to the National Retail Security Survey, the number one source of shrinkage for a retail business is internal theft.

Some of the types of employee theft include discount abuse, refund abuse and even credit card abuse.

Unfortunately, this is one loss prevention area that generally doesn't receive as much monitoring as customer theft.

2. SHOPLIFTING

Coming close to second is shoplifting.

Customer theft occurs through concealment, altering or swapping price tags, or transfer from one container to another.

While shoplifting remains a smaller inventory loss source than employee theft, stealing by shoppers still costs retailers highly.

3. ADMINISTRATIVE ERROR

Administrative and paperwork errors make up approximately 15% of shrinkage.

Simple pricing mistakes due to markups or markdowns can cost retailers quite a bit.

4. VENDOR FRAUD

The smallest percentage of shrink is vendor fraud.

Retailers report vendor fraud occurs most when the deal is from outside vendors to stock inventory within the store.

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SOLUTIONSThe following elements will help to identify, investigate, recover & prevent organised retail crime. Lets look at them in detail.

1. TECHNOLOGY 

2. REPORT   

3. INCENTIVES 

4. PROCESSES 

5. SECURITY EQUIPMENTS  

6. TRAINING

7. RECOVER

8. INVENTORY TRACK

9. PROSECUTE

10. STAFF SCREENING

TECHNOLOGYResponsibility for shrinkage is widely disseminated, henceforth TPA can help a great deal to overcome to a solution. The Radio Frequency Identification (RFID) will be a significant driver of loss prevention

REPORTINGThe reports should be received monthly or bi-weekly. Reports must focus on parameters like cash audit covers, no-sales, flagged returns, employees calls, excessive markdowns or discounts, and merchandise voids.

INCENTIVESWorking with employees a motivating factor is providing with them share of profits that is been saved by Loss Prevention.

SECURITY EQUIPMENTSThe security equipments will help in preventing ORC activities at the premises. Some of the equipments are CCTV Electronic article surveillance, Two-way radio sets, Ceiling mirrors, Magnetic Strips, Digital signage, etc.

TRAININGThe business areas where companies report the use of key performance indicators are closely mirrored by the business areas where companies are most likely to give training in loss prevention.

RECOVERYEconomic recovery tracks the signs of the rebound, reporting on bold steps businesses take to position themselves for the upturn.

INVENTORY TRACKThe purpose of inventory tracking is to ensure that while some of your capital must be tied up in inventory, it does not hinder your company’s cash flow or waste employee’s time. Set aside sufficient space for your inventory

PROSECUTEIt’s most important to follow up or carry forward the plans and strategies undertaken or begun, since only after their completion, we can asses the trajectory we are running through.

STAFF SCREENINGIt’s most important to follow up or carry forward the plans and strategies undertaken or begun, since only after their completion, we can asses the trajectory we are running through.

As we can deduce now more easily, that the feature which exists as shrinkage is actually the LOSS that happens in the retail sector often by small negligence.

We through Oaktree Retail Pvt Ltd help you by using our strategic planning and processing techniques to reduce the shrinkage percentage in accord to the modus operandi of your industry.

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