What is the theory behind loss prevention?

Answer 1

The theory behind loss prevention goes something like this. Lets suppose there are 10 people. There are two who would absolutely not steal. One is a hard core thief who cannot be helped. The other seven are generally trustworthy, but if times get hard or the temptation is great enough, they will steal. It is that latter 70% who are the targets of loss prevention. Those who never steal are obviously not the targets of loss prevention, and you cannot stop those who are very determined to steal. So the goal is to help the 70% who are in the middle of the spectrum to stay honest. The 10% who are determined to steal have to be dealt with by other means such as thorough background checks and investigations.

One way to help prevent shrinkage is to install cameras. However, they should be installed by professionals who have forensic knowledge. You never put the camera controls to where just anyone can access them. Otherwise, you might as well not have the surveillance equipment at all. You should also avoid creating blind spots. Visible and hidden cameras should be strategically placed so that thieves won't be able to avoid the cameras. They may believe they are out of range, only to be caught in the act with a hidden camera. Cameras are a good investment since they can catch other problems as well. They can provide evidence in not only shrinkage and robberies, but also fighting, employee horseplay, vandalism, violent crimes, food/prduct tampering, and fires.

Other technology can help too, depending on the situation. Registers should have journaling capabilites to keep track of transactions and what should be in the register. Drive-throughs should have outdoor register displays to reduce skimming and similar scams. An employee might charge everyone a dollar extra if the customers cannot see the total.

Good workplace policies are other ways to help prevent shrinkage. For instance, you may have to separate job descriptions to where there is oversight and accountability. The payroll clerk should not also be in charge of accounts receivable or shipping. Otherwise, there is the temptation to cut out some of the paper trail and "lose" funds or merchandise. So you don't want to create a situation where someone could embezzle and doctor the books.

Another good policy is to treat all theft situations equally, and never strike deals with the offenders. It doesn't matter if it is the vice-president of the company or a general laborer there. The way to deal with it is to prosecute. If the management can get by with stealing, then how can they prevent their laborers from doing the same? They have to set a good example from the top.