When you’re operating on razor-slim margins, losses from theft can be a big profit hit. In fact, theft—both by customers and employees—costs American retailers more than $33 billion per year. Entire retail chains have gone out of business due to their inability to control losses from theft. And unfortunately, tobacco outlets—stocked full of high-priced, easily pocketed products and frequented by customers who often pay cash—are particularly vulnerable to thieves. But there are steps you can take to cut down on theft.
Guard your store. Customers still account for the bulk of losses due to theft, according to a recent study by the Centre for Retail Research, which estimates that 42 percent of losses are due to shoplifting and robbery. Since preventing theft is a far better way of limiting losses than attempting to catch thieves after the fact, your first goal is to make your store as least appealing to thieves as possible. A well-lit store, both inside and out, with a register clearly visible from the street is much less appealing to thieves looking for a location where they can conduct a robbery and escape unseen by passersby. Surveillance cameras and security systems are also a plus.
Limit your losses—and your thief appeal. Keeping only small amounts of cash in the register and advertising that policy prominently in the store may deter criminals. And if it doesn’t, it at least guarantees that your losses from the robbery will be minimal.
Boost your service. There are lots of reasons for outlets to emphasize strong service, and deterring theft is one of them. A cashier who makes eye contact and greets customers as they enter the store is likely to unnerve potential shoplifters.
Hire right. Employees account for a hefty 35.2 percent (see chart) of all retail theft, according to a recent study by the Centre for Retail Research. Since the best way to avoid insider theft is not to hire dishonest employees, good hiring practices that include in-depth interviews and background and reference checks of all potential hires are crucial for outlet operators.
Watch your inventory. Outlets are particularly vulnerable to tactics like under-ringing or voiding sales, as well as to simple product theft. Regular audits of inventory and of the cash drawer at employee shift changes can help keep your employees honest or help catch the culprit when theft does occur. A policy of sporadic spot-checking of employee’s belongings as they leaving the store can also be an effective deterrent—and give you an opening to follow up a hunch. And finally, limit employees’ access to pricing tools to minimize their ability to mark merchandise down arbitrarily.
Lock it up. Secure your backroom inventory and your store with professional locks and change them when circumstances dictate, such as whenever a key goes missing.
Check your trash. One of the more common methods of employee theft is for employees or customers to stash product in trash bins and attempt to retrieve it from the dumpster after closing time. Keep an eye out for inordinate amounts of garbage, or garbage being stored in an unusual place.
Prioritize safety. While you don’t want to make your store a target for thieves, even more importantly, you don’t want to make yourself or your employees literal targets. Employees should know that your policy is not to confront or resist a theft. •