Risk Management and Retail Theft

Theft, shoplifting, fraud, vendor theft, accounting errors, embezzlement, credit card theft, and cheque fraud are just some of the common threats that retail operations are faced with in today’s workplace. The risk management issue at stake here is the loss of money and the prevention steps and controls that will benefit businesses are included within this document. The fact that retail establishments are often put out of business by these acts is evidence that proper controls, risk assessments and risk management procedures need to be put into place. The proper risk management steps will help companies avoid continuing losses by identifying areas of risk and improving on them and throughout the process they should develop an organizational culture which will help to prevent these actions from taking place.

In order to better prevent these issues from happening managers need to identify areas of concern within the organization. Once these have been established a corrective action plan can be put into place. The introduction and implementation of technology such as a Point of Sale system will greatly improve the level of control within the business. POS systems can provide reports to managers that show all or selected register transactions every day. These may include:

• Excessive opening of the till drawer
• Small cash refunds and returns
• When staff is aware that managers undertake this sort of analysis, this awareness on its own can help to reduce theft and work towards developing a culture that acknowledges that theft exists but that steps are being taken and enforced to prevent it.

Human Resources

Businesses need to put managers in place that have the ability to hire the right employees and to educate them on the expectations and procedures as well as what systems are in place to prevent theft of any kind. Mistakes will happen but with the correct training and the right amount of time employees will learn, however hiring the right employees is the key to successfully avoiding these issues and developing an organization that identifies risks, implements changes and moves towards success. If an employee is caught stealing then there should be swift and final consequences, they should be terminated and all other employees should be made aware of the situation so that it is evident to all that this is how theft is dealt with.

As businesses identifying risk areas, implement changes such as adding a POS system, educating employees, developing a good organizational culture and dealing with theft harshly, risk will slowly be controlled and managed. The loss due to theft may be reduced or eliminated however the risk of theft will forever be present within a retail establishment and it is up to the business owner, managers and employees to navigate the risks together so that they are minimalized and controlled.

Store Layout and Loss Prevention Tips

A well designed store layout will not eliminate all shoplifting but will help reduce it and these links will provide some helpful tips on how store design and loss prevention strategies can minimize loss.

http://retail.about.com/od/lossprevention/ht/design_theft.htm

http://www.lpinnovations.com/page/69-solutions_overview/?utm_campaign=LPI-solutions-overview-PPC&utm_source=adwords&gclid=CJSRnP6Z864CFQvGKgodiHOXIA