Addressing Shoplifting and Fraud at Self Checkouts Within Retail Chains
A retail chain’s Loss Prevention Department (LPD) plays a crucial role, often likened to that of a “goalkeeper” during a penalty shootout, but even the most skilled can only stop a fraction of the attempts.
Essential Tools of the Retailer’s Loss Prevention Department:
- Intelligent Video Surveillance: Cameras connected to modern, intelligent VMS systems with facial recognition capabilities are installed.
- RFID Technology: RFID tags are placed on merchandise, and RFID antennas are installed at the sales floor exits.
- Undercover Employees: LPD staff, disguised as ordinary shoppers, patrol the sales floor.
- AI at Self-Checkouts: Artificial intelligence, integrated with state-of-the-art sensors, enhances security at Self-Service Checkouts.
Despite these sophisticated tools, many retailers are disappointed with their effectiveness and the speed of return on investment. As a result, they often revert to traditional methods, such as incorporating potential losses from theft into product pricing, which undermines competitive pricing strategies.
Common Mistakes in Loss Prevention Approaches:
Faulty KPIs:
Incorrect: Focusing solely on the number of detentions.
Correct: Prioritizing the reduction of losses from theft relative to previous periods.
Personnel:
Incorrect: Merely increasing the number of staff at various locations.
Correct: Establishing a centralized loss prevention department at the retailer’s headquarters, responsible for matching daily inventory audits with video analytics, maintaining a database of shoplifters with individual damage assessments, and operational interactions with security firms.
Resource-Intensive Business Processes Requiring High Qualification:
Incorrect: Delegating video surveillance and the detention of shoplifters solely to in-store staff.
Correct: Centralizing access to video surveillance and automatic shoplifter detection systems within the loss prevention department, which is tasked with conducting investigations and coordinating with security companies.
Conclusion: The effectiveness of the Loss Prevention Department should be measured by the reduction in theft losses compared to previous periods. This strategic focus helps the retailer’s LPD systematically reduce theft losses and establish the retail chain as a “high-risk zone” for shoplifters, crucial for significantly lowering shoplifting incidents
Operational Procedure for Loss Prevention:
- Daily Inventory: Document losses linked to theft incidents on the sales floor.
- Identifying Thieves: The central analytical team of the LPD reviews video archives to pinpoint individuals involved in a theft.
- Forming a Database of Thieves: The corporate facial recognition platform’s “Detain” database is updated to include profiles of identified thieves.
- Forming a Balance for Reimbursement: Link new episodes of theft detected during further investigations to the thief’s profile using the “Visit History” report.
- Auto-Detection of the Suspect: Automatically identify individuals from the “Detain” database during their next visit to any store within the chain.
- Executing the Detention Protocol: Deploy the rapid response team from the security company following a directive from the retailer’s LPD headquarters.
- Reimbursement of Losses: Offer full on-the-spot reimbursement for documented losses to the detained individuals.
- Court: If the offender refuses or is unable to reimburse for the losses immediately, transfer them to law enforcement authorities along with a comprehensive evidence dossier.
About FRP®: FRP® is a leader in the development, implementation, and support of cloud-based and enterprise-level platforms for loss prevention, targeted advertising, and access control, utilizing cutting-edge facial recognition technology.