Benefits of security system technology in retail loss prevention

Retail Loss Prevention: How Security System Technology Can Help

June 8, 2020 by

When it comes to ensuring the profitability of your brick-and-mortar store, you might choose to direct your efforts towards creating an e-commerce store as well to take advantage of consumers shopping online. While this is important, there’s another aspect that can hamper the success of your business: in-store fraud.

Running a physical store exposes you to certain internal and external threats related to fraud, from altering company records to embezzlement. In fact, the Sensormatic Global Shrink Index claims that inventory shrinkage accounts for $100 billion in annual retail losses across the globe.

Boosting your retail security requires a good understanding of the risks that face your assets. This includes implementing measures to protect them by identifying vulnerabilities, investigating the causes, and ultimately executing loss prevention tactics to prevent these incidents.

Benefits of Technology in Retail Loss Prevention

Fortunately, advancements in technology have provided various opportunities for businesses to boost their retail loss prevention efforts, protect their people and profits, and support functions that promote growth.

These efforts need to be executed on the store floor without interfering with the customer experience. With today’s technology, it’s possible for retailers to precisely target losses in their specific business, while minimizing the disruption to their customers’ shopping experience, and in some cases, actually improving it.

Hardware options such as smart product tagging from the manufacturer, shipper profile video recognition, and software options such as POS fraud detection and incident and risk management allow retailers to prevent losses resulting from gaps in policy adherence, organized retail crime (ORC) recognition, and product loss and fraud deterrence. Generally, technology has allowed businesses to identify gaps in customer safety, inventory control, employee empowerment, and other areas, allowing them to react faster to any risks to their customers, profits, and employees.

Some of the benefits of specific technologies aiding in loss prevention include:

  • Improved situational awareness due to 360-degree HD network cameras
  • Improved inventory accuracy and theft prevention through RFID
  • Insight into store operations through cloud-based cash management systems

Generally, technology has transformed loss prevention efforts from a defensive role to a more offensive one. Some of the more commonly used technologies include:

1. Point-of-sale (POS) product activation

Any items integrated with POS product activation must be activated for them to function properly. This technology is particularly useful for preventing theft of electronic devices, such as mobile phones and laptops. Such devices can be digitally locked by the manufacturer before distribution and activated using a code that is given to the customer after payment at the point of sale. This discourages shoplifters from stealing expensive electronics.

2. Biometrics

This technology uses unique physical attributes, such as retinal scans or fingerprints, to identify authorized employees, users, and customers. It grants them access to restricted functions such as entry to the store safe or refunding customers.

Biometric fingerprint scans can, for instance, be used in online and mobile banking as an alternative to username and password authentication, reducing fraud associated with hacking.

3. GPS product tracking

GPS trackers are usually placed inside the packaging when shipping goods to allow monitoring and tracking from the warehouse to the store, helping to prevent loss or theft during transit.

Once at the store, the tracker can remain active to prevent theft by shoppers or employees and allows store security to identify the location of items that have been removed.

4. Non-scan POS detection

Retail research suggests that about 30% of retail losses occur at the point of sale, which implies that items pass through checkout points without proper scanning. Improper scanning can be caused by an employee manually entering the incorrect number of items or failing to scan an item altogether.

Customers can also fail to ring an item up at self-checkouts. Non-scan POS detection technology can prevent such losses by using video analysis, artificial intelligence, and deep learning to identify and alert store employees when unscanned items go through the checkout process in real-time.

5. Radiofrequency identification (RFID) tags

RFID tags use electromagnetic wavelengths within radio frequencies to uniquely identify products, such as electronic devices, clothing, or footwear. It is the most commonly used retail loss prevention technology with a 96% rate. Moreover, tagging merchandise helps to improve inventory accuracy by 32% and boost sales by 18%.

6. Facial recognition

The main cause of retail losses is due to shoplifting, which accounts for approximately 36% of annual losses. This corresponds to data suggesting that tens of millions of people shoplift every year, being caught once in every 48 attempts or so. Although closed-circuit television (CCTV) cameras can be used in-store or worn as body cameras to prevent shopper and employee theft, facial recognition can also be used to identify known offenders as soon as they enter your store. They scan the face of every person entering the store and compare them to your database. If there’s a match, your store security will be alerted.

Final Note

Many other technologies are still being tested for retail security to prevent or minimize losses, such as shelf-scanning robots that inspect shelves for price, inventory, and labelling mistakes. Or, smart shelves that use a combination of weight sensors, proximity sensors, 3D cameras, and microphones to detect when items are removed from specific displays or shelves.

Whether you want to use a popular loss prevention technology like RFID or some of the newer technologies, you can leverage technology and other proven loss prevention solutions to boost your retail security services.

If you plan on implementing multiple retail loss prevention strategies, you should seek experienced integrators to help ensure seamless operation and the best value for your money. Certified integrators can provide the blueprints to fill in any blind spots, design effective theft detection systems for inventory, and support vital store-wide communications programs.

For more information on retail loss prevention strategies and other security needs, please contact Canadian Security Professionals at 1-877-494-9911 or our website.

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