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4 Key Fundamentals to Positively Impact Your Shrink Loss

Posted on 6/28/12 11:00 AM


Looking to positively impact your shrink loss? There are certain fundamentals retailers with a great loss prevention program rely on to reduce opportunities for loss and increase the opportunities for more profitability.Here are four key fundamentals every retailer should include in their loss prevention program, along with some best practice articles.


LP fundamentalsSome retailers look to implement a loss prevention program without the appropriate focus necessary to impact their shrink. True, everyone is responsible for preventing loss (operations, store management, field management) but having dedicated resources, focused on shrink prevention, will provide better results in the long run. 

Often those who share too many resources across too many responsibilities see a diminishing return. Also, trying too many initiatives or changing initiatives too often usually results in a fragmented program without great results. To get the best results in your loss prevention initiatives, get focused with the right resources and the right program initiatives.

                 Suggested reading: 

                                5 Steps to improving high shrink and loss locations

                                Is your loss prevention program a SPORK?

                                Shrink Results: Good program or just good luck?


Without a doubt, those retailers who are most successful in reducing inventory shrink and preventing loss are those with a consistent, well structured program. Going hand-in-hand with being focused is being consistent with program elements. Whether it is pertaining to how you investigate loss, scoring audits or conducting training with associates, make sure it is consistent.

For a program to be consistent it must start with some key elements; documented policies and procedures, a well-developed audit and audit schedule (for all locations) and an understanding of how the company handles theft investigations. Without a consistent program and key elements, your associates will not understand your expectations and be in a position to help prevent loss in their locations. 

                Suggested reading: 

                                5 Areas that affect your store audit implementation results

                                We the jury finds in favor of…

                                Why retailers are giving employees the opportunity to steal



The 2011 Global Retail Theft Barometer reported in its latest survey results that those retailers who reported better shrink results conducted a minimum of two (2) loss prevention audits for each location. At this past October’s Loss Prevention Research Council Annual Session, professional shoplifters stated that employee visibility and awareness was the #1 deterrent to them shoplifting. 

Visibility plays a large role in preventing loss. Conducting audits, holding training meetings, stopping into stores when unexpectedly are all things that can be done to increase LP presence. What doesn’t work? Not visiting a location or conducting a shrink or loss prevention audit in a location “because it always has good shrink.”

                Suggested reading: 

                                The three employees that cause 70% of your loss

                                10 tips to unraveling a mystery shopping program

                                Focus on associate relationships this holiday season

                                Prevent employee theft by creating a culture of loss prevention



Loss Prevention is all about preventing loss, which requires a program to be proactive rather than reactive. Yes, reacting to situations will happen (and happen often); however as we state in The Six Principles of Loss Prevention, all reactive situations should end with future prevention in mind. 

To truly impact shrink loss, a loss prevention program must focus on certain fundamentals with the key fundamental to be proactive. Those most successful in their shrink reduction don’t look at certain initiatives as “elements” but rather as developing a culture of loss prevention; Change behavior, create a trustworthy environment, seek out and reward positive accomplishments.

Topics: training and awareness, Loss Prevention program and development

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