Reducing Retail Shrink Without Risk
Jun 04, 2012
Why Loss Prevention is Shifting Their Focus
76% of Loss is Controllable
The need for change in Loss Prevention programs is a hot topic in today’s retail industry. It’s amazing how much money is spent and the dangers involved in apprehending and prosecuting shoplifters. Recent research by Merchant Analytics indicates apprehension-focused Loss Prevention programs actually cost more than they recover. These programs aren’t reducing a retailer’s total shrink but indeed causing greater headaches with added litigation costs and violence and, at times, result in someone’s death. Research shows that approximately 76% of a retail’s total shrink is actually low-risk and controllable and that shoplifting only makes up about 24%.
Shifting Focus
We all know that opportunity is the driving force behind most shoplifting incidents. So it stands to reason that removing the opportunity eliminates the loss. With this in mind, five years ago, one Fortune 25 company shifted their focus to a “stringent product protection, theft- protection program,” and found after 5 years they had a 94% reduction in shrink, 11% improved gross margin and 85% increase in net profit. There is an excellent article written about this topic in the April, 2012 issue of Loss Prevention Magazine. It proposes that focus and resources should be put towards preventative issues retailers can control, and not primarily toward shoplifting. While we will never be able to stop the problem of shoplifting, Bryce creates innovative, preventative solutions to help save retailers millions of dollars, reduce shrink, and possibly even save lives.
Engineered Network Systems Case Study
Bryce has many customers who are OEM’s (Original Equipment Manufacturers) serving major retailers in the National Retail Federation. We have seen theft reduced to nearly zero when manufacturers innovate and integrate strong anti-theft devices in the terminals and mounting systems of high ticket, portable items. One example is Engineered Network Systems (ENS) who makes credit card terminals found in major grocery chains throughout the U.S. Credit card terminals were being stolen from the grocery stores and thousands of debit card PIN numbers were compromised. ENS replaced standard bolts securing the mount with high-security Bryce Key-Rex™ fasteners which was a quick, easy, and affordable fix. This solution removed opportunity from the equation and eliminated any further losses. Not one breach has been reported since installing our anti-theft screws.