Retail loss prevention tips for clothing retailers

The retail industry is under assault right now in so many forms, but without a doubt, the biggest threat to retail profits is stock loss due to shoplifting and stock shrinkage.

In this article, we delve into the various ways shoplifters and thieves bypass store security systems and provide business owners solutions to help combat this ever-increasing threat to business finances.

We also discuss some of the latest technologies available today, which will assist you with your efforts to prevent stock losses from occurring.

So let’s get started!

Shocking impact shoplifters have on business profits.

A recent study by The National Retail Federation found that more than $40 billion worth of merchandise was stolen or lost at U.S. stores during 2011 alone. That’s an increase of nearly 10 per cent over 2010 figures.

According to the same report, the average cost per item lost or stolen increased to about $125 last year compared to just $100 in 2009. And it seems like these numbers continue to rise as well.

Even though there has been a slight decrease in overall crime rates since 2007, the amount spent on combating shoplifting continues to climb higher each year.

Unfortunately, since the COVID-19 pandemic, the devasting costs have risen further; driven by economic circumstances, shoplifters are switching to overdrive. We discuss the financial stresses and challenges the retail industry is facing in an upcoming article very soon.

Shoplifting techniques frequently used to overcome store security.

Shoplifters are taking bold steps to overcome store security—there are two primary groups of shoplifters, the conventional and tech-savvy.

Tech-savvy shoplifting techniques can be defined by;

  • Using tools to remove security tags
  • Covering tags to avoid detection
  • Stolen credit or store cards
  • Hacking–theft of credit card details at the POS.

Other shoplifting techniques used include;

  • Concealing items
  • Wearing out clothing items
  • Distraction and walkout
  • Swarming

No matter how thieves target your store, whether using tech-savvy or conventional ways to steal your high-value items, the answer is prevention. The reality for retailers is opening your store without adequate preventative measures is almost inviting trouble.

Fortunately, the cost of combating thieves is becoming increasingly cheaper over time. There is an incredible array of theft-prevention solutions available—and while store security does not positively impact sales, the alternative is allowing shoplifters to damage your bottom line massively.

Businesses who avoid taking the necessary preventative steps to protect their business will suffer the consequences.

To overcome the sophisticated techniques, shoplifters use to overcome retail security requires understanding where the weaknesses lay in your business.

Let’s take a look at ways to prevent these attacks.

Loss prevention techniques every business owner should use.

Savvy business owners are aware of the constant threat to inventory from external st and should implement critical loss prevention systems.

Shoplifters reply on three critical components in targeting your business, they are;

  1. Access
  2. Opportunity
  3. Evade

As access is an essential part of the purchase process, shoplifters will always have access to clothing items, making the first component on the checklist easy.

The second component is opportunity. Opportunity often is present in busy stores, making it easy for thieves to conceal goods undetected.

Lastly, thieves need the ability to evade detection—in busy stores without security measures in place, avoiding detection is as easy as walking out the door at the right time.

Easy to implement low-cost security measures.

Low-cost security measures you can take to prevent losses due to theft and shrinkage in your retail store are;

  1. Ensure any external fire exits are alarmed.
  2. Optimising store layout—floor plan matters
  3. Position your checkout counter near the store exit
  4. Installation of warning and prosecution signs
  5. Installation of convex and concave mirrors
  6. Monitoring flow to and from dressing rooms
  7. Performance bi-annual stock-take and use inventory control software to track sales and stock discrepancies.
  8. Storage of employee personal valuables, wallets, phones, bags etc.
  9. Restrict access to POS, cash drawers and securing security tag detachers when not in use.
  10. Staff training to raise awareness of suspicious behaviour in-store.

The above may not be enough to stop a determined thief, but they can make a difference when appropriately implemented.

Next, let’s delve into solutions that can help put the lid on theft attempts.

High-end security solutions frustrate shoplifters.

Clothing retailers are particularly vulnerable to theft. Some of these deterrents may seem intrusive but are a necessary part of keeping your inventory and staff secure.

As mentioned earlier in this section, the opportunity to steal and evade detection can compel shoplifters into action, so let’s take a look at preventative measures you can take to dampen their spirits. We can segment our action plan into three loss prevention strategies;

  1. Security Cameras
  2. Retail security tags
  3. In-store security personnel
Security cameras and video surveillance.

Over the last few decades, security cameras have become exponentially better in terms of resolution, function and affordability.

Today just about any retail startup can afford a security camera, and they have become an invaluable tool in deterring would-be thieves.

Some of the features you can expect in today’s security cameras include;

  • Wifi and 4G connectivity
  • Movement detection and auto-tracking
  • High-quality (4K) video recording and storage
  • Remote viewing
  • Facial recognition
  • Night vision
  • Power backup
  • Cloud storage

Tech-savvy clothing retailers can thoroughly monitor staff and customers by using multiple cameras to extend coverage to every corner of their store and eradicating blind spots.

Multi-camera bundles enable store owners flexibility to fix the positioning of some cameras while setting others to detect movement. Movement detection and tracking create the perception that every customer move is monitored.

Night vision is a valuable feature to consider in your purchase decision for stores that suffer from recurrent break-ins after dark. Facial recognition is excellent in identifying repeat offenders and cloud storage—a feature that will weigh on the minds of shoplifters.

Let’s look at the next level in retail security—security clothing tags and how advances in tag security are helping to improve their effectiveness in the fight against shoplifting.

Retail security clothing tags.

RFID technology has been around since the 70s and has played a significant role in reducing theft throughout the retail industry. Since the inception of RFID technology, it has been under constant attack from thieves to overcome detection through various methods such as covering or removing security tags.

Today thousands of videos are freely available to educate the next generation of would-be shoplifters on defeating RFID readers and security tag technology.

As the clothing industry is one of the most lucrative and easily accessible, high ticket items such as designer clothing represent an opportune target for shoplifters.

One of the many challenges tag manufacturers face is to improve tag security without lowering the customer experience—customers handling items do not want their purchase experience encumbered with security measures that spoil the purchase experience.

When considering a security clothing tag for your store, look for the following features;

  • Proven to reduce inventory shrink
  • Tamperproof
  • Easy to remove at checkout
  • High detection range
  • Customer experience
  • Gentle on clothing

OMAC has invested heavily in developing a security tag technology by making their tags impervious to attack. Not only are our tags virtually tamperproof, but they do not diminish customer experience nor damaged merchandise.

Those retailers interested in knowing how OMAC security tags can help reduce inventory loss can try our 3-min challenge to crack OMAC by clicking here.

Security personnel—asset protection and response.

Another way to further lower retail shrink is through hiring a security guard. Security personnel act as a visual deterrent and a dedicated set of eyes to monitor activity and directly respond to criminal acts. Security guards also provide an extra level of security and comfort to employees, knowing an experienced individual can assist when customers become angry or threatening.

Understandably, some retailers are apprehensive about engaging onsite security, fearing it can spoil the customer experience and deter paying customers–so before implementing such as strategy, give the matter significant consideration.

Uniformed security may be the best deterrent for some businesses, while a less visual presence may be more suitable in other circumstances.

Return fraud–the impact on your business profits.

The various ways individuals try to defraud your business can seem almost endless. Return fraud is one area that is steadily increasing in the retail sector, and the impact on businesses profits can be heart-wrenching.

So what is return fraud?

Return fraud or ‘wardrobing’ is a term coined when customers abuse a store return policy to purchase goods, wear the item for a night out then returns it with tags attached.

According to one estimate, items worth approximately $20 billion were returned to U.S. businesses last year. This figure represents losses of between 5-15% of the average retailer annual revenue.

Some ways to combat return fraud are;

  • POS to track customer purchases and returns
  • Update your returns policy
  • Consider introducing a change of mind policy and restocking fee
  • Make sure your returns policy is visible at the checkout and on your website.

A well-crafted story policy and POS to track customer transactions will help lower return fraud.

Pre-employment checks

And finally, a quick discussion on employee theft, a topic which is too often overlooked. Although the lion’s share of shoplifting occurs from external theft, do not underestimate the impact a bad hire can have on profits.

There are a few ways to minimise employee theft, they are;

  • Pre-employment checks
  • Pay your employees generously
  • Tight inventory controls

One of your best investments is ensuring you employ well; taking the time to get to know your hire before you commit will avoid a lot of pain in the long term.

Final words.

As you can see, the security of your business starts from the inside. Lower the threat to your business. is paramount. Store security is doesn’t have to be costly–on the contrary, many security measures are very affordable.

The reality of doing business necessitates implementing security measures to protect your business from fraud and safeguard its future.

Lastly, but more importantly, enjoy your business journey. Focus on treating others well and value the people you meet along the way. Focus on the good, and the rest will come naturally.

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