Tips On How To Reduce Losses

1. In order to reduce loss, each Business needs to understand the cause of the loss or shrink as it is known as. For example, there is no point in employing a security guard or putting up CCTV, unless you can pinpoint where the losses are occurring.
2. When you are measuring shrink, remember that there are two types of shrink – accounted for and unaccounted for shrink, but the key factor is that they are both losses to any Business. An example of accounted for shrink would relate to damaged items such as in retail, where it is known where they were damaged. Many Businesses would record these items and remove the value from stock so they would not be included in any shrink figure. Unaccounted for shrink is the actual unknown loss such as theft, or items not received and these would be the loss figure that many Businesses would use to measure shrink. Therefore, when measuring shrink check to see how your Business records the losses but always remember that all loss, whether accounted for not is still a financial loss to the Business.
3. Never assume the point of loss within your Business and never assume that theft is the cause. Keep an open mind when you are having losses – Was the stock received in the first place, check the stock control database, were they placed in the correct place, were they priced correctly etc.
4. Ensure you have an effective Loss Prevention strategy linked to risk modelling with the key focus on how to prevent the loss. Remember the key is to deter criminal activity.
5. Reduce the risk to the Business, reduce the rewards and increase the risk of the criminal.
6. Ensure that your Business has effective security policy and procedures – No point in having security equipment such as an alarm without effective guidelines on use such as procedures. It is okay to have an intruder alarm, but if it is not operated correctly it become useless. Most security failures are human error.
7. Regular (monthly) operational and security audits, with appropriate action plans will assist in the reduction of loss.
8. Involve all staff in the Loss Prevention strategy.
9. Ensure all managers and loss prevention staff have appropriate training on how to reduce loss, including investigation training.
10. Keep a record of all security incidents, which will assist with analysis and Loss prevention.