April FAQ — Loss Prevention and Shrink Awareness

One Friday each month, I dedicate the post to looking at some questions I have heard recently from developing leaders. Sharing those questions and my thoughts about them is a way for me to spread the information to as many leaders and future leaders as possible. If you have a question about leadership, or just a situation you would like some additional insight on, please email me at Effective Retail Leader. Let’s take a look at this week’s question.

I continue to read articles about the growing problem of retail theft and shrink in our business. I see it in my store also, what can I do?

Wow, great question. And this is certainly a topic we have heard a lot more about recently in retail. Multiple CEOs have commented on the impact of shrink losses on the overall business in recent earnings releases. It feels like across the board it is a problem that has a real impact on the bottom line of stores and companies as a whole.

There are varying reports on the size of the issue, but the numbers are staggering. They range from $94 million to $112 million in 2022; regardless of which is closer, they are huge numbers. It is an increase of more than twenty basis points in actual industry average shrink (a percentage of loss to overall sales) from 2021 to 2022. Another alarming indication of the problem’s impact. 1

Most retailers are seeing increased activity around individual shoplifting to larger scale organized retail crime (ORC) rings blatantly taking product from shelves and not paying. There are countless videos and stories of brazen behavior of walking out in front of security officers with handfuls or even carts full of product. So, your question about what you can do about this is a good one. I am sure many retail leaders are asking the same question.

There are certainly several things you can do, and should keep in mind when looking for ways to protect your team and the merchandise in your store.

Safety over all else

I cannot stress this enough, and any Asset Protection leader will agree, that safety is paramount. Noting in your store is worth your safety. There is too much risk of injury or worse if you do not take the appropriate steps in these types of situations. Always avoid direct confrontation, blocking, or chasing individuals or groups who are stealing. I have seen videos of people getting punched, hit by cars, or threatened with guns just by trying to intervene. Avoid that at all costs. It may be difficult to watch others outright taking product right in front of you, but resist the urge to try to physically stop them. I know it is infuriating to allow it to happen, but again, it is not worth your safety or your life.

Service Is Still The Best Method

Providing great service may seem like it is not enough or even an outdated method, but the reality is, people who steal are a very small percentage of the people who come into your store. Everyone else wants to be served and supported in finding what they need. People who steal want to go unnoticed as much as possible. Providing service is just that: engaging, talking, asking questions, and finding solutions. It is not ‘watching’, ‘following’, or making assumptions. If you’re going to assume, assume they are a well-intentioned customer who wants to be helped.

Practice Deescalation Techniques

If you do find yourself in a situation where tempers and hostilities are rising, you need to work on deescalating the situation. As a leader, you need to both stress this, and empower your team to do this. Always stay calm and do not match the escalating voice or language. The calmer you are, the calmer everyone around you will be. Never accuse any one of anything. Ask questions and listen. Look for solutions versus providing dead ends or quoting policy. A service mindset in this situation is still your number one approach to turning the temperature down.

Practicing what this looks like is something all retail leaders should do. Use huddles or team meetings to discuss what these instances might look like and get comfortable with what you might say. You want everyone to be comfortable with how to address these types of situations well before they might happen. I know ‘role playing’ is never a popular term (I like to use practice), but whatever you refer to it as, do it. These practice situations may be the difference between a quick and peaceful resolution or a situation getting out of hand quickly.

I am sure most of these sound a little passive and possibly even frustrating, but they can be the best proactive approach you have in preventing issues from occurring. Often the best thing you can do is to remain observant of what is happening and your surroundings, who is involved, and what the circumstances are. If you see the problems growing, work with your district or regional manager and your asset protection leaders to identify potential support solutions. You may discuss with local law enforcement on how you can partner with them for additional patrols in the area and providing information about the people who have committed hostile acts. But, again, always do so in partnership with the leaders within your organization so they can help find the best solutions for the situation you are in.

Good luck and stay safe out there.

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1 National Retail Federation's (NRF) 2022 Retail Security Survey