Retailers and other businesses in the United States collectively lose billions of dollars yearly because of theft, fraud, and employee errors. Loss prevention jobs focus on managing these risks and combating the rising tide of organized retail theft.
Retail professionals sometimes use the terms “shrink” or “shrinkage,” shorthand for the difference between actual inventory levels and the expected levels based on sales. It’s a challenge that has only increased post-pandemic. About 57 percent of businesses report increased organized retail theft in the past few years.
This rise in retail loss has made loss prevention managers more critical to business success than ever before. They must bring a wealth of skills and knowledge to their loss prevention jobs. Their work helps a business protect its assets, minimize financial losses, maintain a safe work environment, and enhance customer trust.
What Is Loss Prevention Management?
Loss prevention management is about more than just catching shoplifters. It involves a systematic approach to prevent all types of retail shrinkage. By implementing effective loss prevention strategies, businesses improve their bottom lines and create positive and secure environments for employees and customers.
Loss prevention aims to increase business profits by reducing the amount of money lost through shrinkage. Some retailers and companies in other industries where theft and fraud are issues now hire loss prevention managers to lead teams that oversee security, investigate theft and fraud, and implement programs to reduce employee errors that lead to retail loss.
Businesses turn to skilled loss prevention specialists for several reasons.
- Minimize financial loss. By implementing loss prevention strategies, businesses can reduce their losses and increase their profits.
- Protect assets. This includes protecting not only merchandise and equipment but also intangible assets like data and intellectual property.
- Maintain a safe work environment: Safety protocols and procedures can reduce the risk of accidents that lead to the loss of products and injuries to employees, as well as the potential for liability claims and lost productivity.
- Enhance customer trust. By increasing security and loss prevention strategies, businesses can make customers feel more secure when shopping, increasing their trust and loyalty.
Loss prevention management is essential in retail and other large industries. As noted by Oracle, “In the retail industry, which typically operates on slim margins, reducing inventory losses plays a critical role in protecting profits. Loss prevention is also important for businesses in other industries, including restaurants, wholesale distribution, logistics, and healthcare.”
Skills Needed in Loss Prevention Jobs
Businesses face potential loss through various means, including external theft, employee theft, internal loss caused by employee errors, supplier fraud, and administrative errors. Success in dealing with these issues in a loss prevention job requires technical, analytical, and interpersonal skills.
Risk assessment and analytical skills are essential for loss prevention managers, who must identify potential risks and vulnerabilities within an organization. They require expertise in risk assessment and analysis necessary to extract actionable information from data related to inventory, sales, and other metrics.
Loss prevention managers also have competence in security systems, including how the latest systems and technologies operate. This involves electronic article surveillance (EAS) systems, CCTV cameras, and access control systems.
When an incident occurs, loss prevention managers employ their skills to investigate the situation thoroughly, including interviewing witnesses, reviewing security footage, and working with law enforcement officers.
Loss prevention managers also need “soft skills” such as attention to detail and strong communication skills. They must also effectively manage, motivate, and inspire a loss prevention team, delegate tasks, and provide guidance and support.
Effective Loss Prevention Strategies
Technology often plays a role in effective loss prevention strategies. This includes CCTV security cameras in high-risk areas such as store entrances, exits, cash registers, and stock rooms. Many businesses also employ the use of security tags and point-of-sale systems.
A comprehensive loss prevention strategy includes many different policies and procedures.
- Employee training. In addition to providing safety training that can prevent accidents leading to the loss of merchandise, businesses can also train employees to identify and prevent theft, handle fraudulent transactions, and detect suspicious activity.
- Cash handling policy. Businesses can train cash-handling employees on best practices for counting and depositing cash. They can also secure and monitor each cash register and make cash deposits regularly.
- Inventory audits. Regular inventory audits can help identify shrinkage, allowing businesses to identify areas of concern and take preventative action quickly action.
- Maintain store security. Retailers benefit from a well-lit, clean environment with secure windows and doors.
- Develop a code of conduct. Creating an employee code of conduct that addresses theft and fraud prevention and establishes clear expectations for employee behavior and ethics.
- Partner with law enforcement. Businesses can partner with law enforcement agencies to share information and coordinate loss prevention efforts.
Loss prevention managers include all these factors when developing a comprehensive loss prevention plan that provides written theft and fraud prevention strategies with a track record of success. Businesses should regularly review and update their plan.
NMU’s Loss Prevention Management Program
NMU Global Campus offers an online Bachelor of Science in Loss Prevention degree program that allows students to further their education while maintaining professional and personal obligations. The affordable program, developed and taught by loss prevention professionals, enables students to transfer up to 90 credits into the program and benefit from industry internship opportunities.
Graduates learn how to combat the rise of organized retail theft. The core curriculum includes courses in:
- Principles of Asset Protection
- Communications in Loss Prevention
- Retail Accounting and Inventory Control
- Loss Prevention Data Analysis
- Principles of Retail Investigations
Graduates from the program understand how to apply theories and strategies learned in class to real-world situations. They develop investigative techniques and learn best practices for applying data analytics to loss prevention.
Loss prevention is a fascinating career in demand for retail, insurance, healthcare, and finance. Earning a degree in loss prevention management provides a solid foundation for a career in this growing field, providing transferable skills that can be applied to various industries.