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Sustaining A Proactive Loss Prevention Program

Posted on 7/30/13 11:00 AM

Sustaining a proactive loss prevention programToo often we see existing loss prevention initiatives focused on reacting to issues. This "whack a mole" approach can be the result of an underfunded or under supported department, or the perceived need to show activity and apprehension results to executives to prove the existence of a department or personnel.

The primary goal of a loss prevention department should not be to apprehend the errant shoplifter or dishonest employee; rather, it is to prevent losses from happening in the first place. While catching more dishonest employees and shoplifters may showcase the talents of loss prevention personnel, executing a sustainable, proactive loss prevention program will provide a positive impact to a company's bottom line and reduce overall loss. 

What does it take to sustain a “profit-improving” loss prevention program?  


To be effective in improving profitability, you need to maintain a consistent loss prevention program. Like other business functions, the loss prevention department must have strategies and programs built to operate consistently throughout the fiscal year.  These strategies need to look at shrink holistically and support all locations and employees across the company. Here are some consistency tips in a few areas of a loss prevention program;

·         Audits - Audit all locations multiple times throughout a year to ensure compliance to policies, procedures and processes. Target store locations should receive additional audits as the goal is to decrease loss; however, all stores must still continue to receive the benefits of checks and balances throughout the year.

·         Training and Awareness - Sporadic messages or materials will only decrease the true importance of a loss prevention program. Topics and mediums must vary, but maintaining regular and consistent messaging and distribution will help to keep the program top of mind. Align your topics with operations to increase the tie-in to the overall business.

·         Dealing with Theft – The characteristics of a dishonest employee has changed over the past couple of years. Due to difficult economic times, employees, who may have remained honest, have chosen to steal for the need, not just the greed. It is still important to be consistent with your theft policies to send a strong message to all employees. Being inconsistent with how you handle those admitting to theft will diminish the culture regarding loss prevention and allow other employees to believe that dishonesty is acceptable within your company.


The existence of a loss prevention program must be more than policies, procedures and posters. Human visibility and interaction between store employees and those responsible for the LP function increases the importance of loss prevention as well as an aura that someone is always watching out for potential loss. To be most effective, loss prevention functions should sustain visibility through;

·         Store Visits - Providing a presence through audits, loss prevention visits or mystery shopping (via distributed reports) can promote the atmosphere that someone is always checking on the store. These visits can be positive as to provide training and check-ins, as well as to focus on key elements of the business that can be affected by loss (customer service, sales and loss prevention).

·         Data Analysis – The ability to analyze data from various business points (point of sale, inventory, etc.) can increase the visibility into the business, without requiring hours of in-store review. Using tools such as exception based reporting and communicating with stores about exceptions can increase the knowledge that someone is looking at the stores without always requiring a physical presence. Like store visits, data analysis can focus not only on negative loss prevention situations like potential theft, but also margin erosion, training and systemic issues.


A loss prevention program focused on being proactive cannot remain stagnant. To be successful, the program must be fluid supporting the ever changing needs of the business. Often times, this can seem difficult (but not impossible) if budget and resources are restrictive.

With fewer resources (budget, people, etc.) to handle the elements of a proactive program, it is natural and often the unconscious tendency to become reactive. What can one do when it appears that resources and budget are not supporting the program?

Innovation often occurs when things are most difficult, and people are forced to think of new ways to handle the same problems. Sometimes the best approach is a new approach.

Talk to other departments within your company to see if there are resource-sharing opportunities. Talk with industry peers to learn what tactics they have used to do more with less. Seek out vendor partners who provide resources and support to supplement loss prevention programs.

Sustaining a loss prevention program focused on improving overall business profitability is doable. It takes planning, proper development and sometimes a new approach to execution.


Related Read:

Safety: Fit and Function in a Loss Prevention Paradigm

3 Bad Loss Prevention Habits

What Honest Employees Won’t Tell You


Topics: Loss Prevention program and development

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