How to Prevent Theft in Convenience Stores, Gas stations, and Retail Stores

Intro

Shrinkage is a huge issue in the retail world and it eats it a portion of your profits. Limiting theft is crucial is surviving in retail. If we rank sources of shrinkage for convenience stores in the United States the order goes, 45% to dishonest employee theft, 36% from shoplifting, 13% for administrative and non-crime loss, and 6% from vendor/supplier fraud. In this article we go over customer theft, employee theft, products you can use to limit theft, and the benefits of a POS system to limit theft.

Preventing Customer Theft

The best step any retailer can take to prevent theft in their retail store is awareness. You have to remember that customer experience at your business supersedes anything. You don’t want customers to have a bad experience because of the steps you take to limit theft. Imagine if you see someone running out of a store with two guys chasing him into the parking lot and tackling him, while you’re walking in with your children, that’s a bad experience without even entering the business. Making sure you don’t over do it with theft prevention methods is crucial to keep honest customers coming back to your business. 

The National Retail Federation (NRF) estimates that nearly $47 billion in annual retail sales are lost due to inventory shrinkage. That $47 billion translates to around 2% of the annual revenue for all retail stores in the United States. The highest percentage of theft in retail stores occur during the winter months. This is due to higher customer traffic during the holiday season and heavier clothing worn during these months, which allows products to be concealed under heavy clothing. 

Let’s start by noting, a plan is more than the sum of its tactics. You can’t just decide to place cameras behind your register and call it a day. A plan requires careful consideration at many levels and may require considerable changes to the way you currently operate your business. One of the most important things about running a convenience store, liquor store, gas station, or any other type of retail store is making sure you have great customer service and build a great relationship with your customers. If you and your employees are already doing this that’s great, because it will help you prevent theft at your business as well. The more you know about a customer, the less likely they will want to steal from you. The customers you know by name are aware that you can pick them out of a lineup, additionally if they see something suspicious or someone stealing, they will let you know. In addition, I recommend involving the police for every attempt of theft. It may sound like overkill calling the police over $2 worth of candy, but the more you do now, the better precedent you set for the future. Word will spread that your business is very strict on shoplifting and you’re willing to involve the police over everything, making people more wary about stealing in your store. One city in Arizona demonstrated that by involving the police as often as possible, shoplifting decreased by over 21%. Other methods to limit customer theft at your retail store include using shorter displays to make it easier to keep an eye on customers, Installing an Entrance Alert Sensor to ring every time the door opens, and having the checkout near the exit. You have to remember there’s almost no way you can prevent theft altogether, but with a good strategy, you can definitely limit it.

Preventing Employee Theft

The United States has some of the most dishonest employees working at convenience stores compared to the rest of the world, 45% of shrinkage comes from employees vs. only 28% in the rest of the world according to the Global Retail Theft Barometer. Additionally, only 36% of shrinkage is due to customer shoplifting, that means it’s more common for your employees to steal from you, versus customers. Having strategies to deal with this shrinkage and theft issue is paramount to survival in our cut-throat market. 

Relation building with employees has great benefits. Forge relationships with your employees and let them know they’re valued and appreciated. 75% of employees admit to stealing from their employer at least once. If employees feel engaged with your business and the work they’re doing is valued, the happier they’ll be — and less likely to exhibit malicious behavior like theft. In fact, the number one way internal theft was detected was a tip from another employee. 

The most frequent way employee theft is carried out is by colluding with a “customer” to steal merchandise. For instance, A cashier could sometimes void a large transaction, but still place the products in shopping bags for the “customer”. Another thing they could do is they could ring up only a portion of the products, while also placing unscanned items in the “customers” shopping bag. An example of this happened at a Walmart in Philadelphia, a four-person employee theft ring allegedly stole $60,000 worth of merchandise by only ringing up inexpensive items from large orders of merchandise, leaving the rest to go unpaid. 

Some ways you can combat this sort of theft in your convenience store, gas station, or other type of retail store is by employing strategies to reduce theft at the point-of-sale. These methods include security cameras at the point-of-sale, electronic article surveillance, and maintaining high employee hiring standards. These scams dominate local news reports and is the most common way employees can rob you of a high amount of merchandise, so making sure you can combat at this form of employee theft is necessary.

Products to Reduce Theft

Security Cameras

Having a security system set up around your retail store is the most essential product you can have to limit theft. Not only does it allow you to monitor and replay anything that occurred in your business, but it lets customers know that you could be monitoring what they’re doing and that could help scare away potential thieves. I recommend any business owner to purchase a security system for their business, in the event someone steals for your convenience store you will most likely catch the act on camera and be able to forward the evidence to the local police. Additionally, if you have someone monitoring the cameras you may even catch the shoplifter before they leave your premises. Not only do cameras allow you to catch customers stealing, they may even allow you to catch an employee trying to steal from you. If you place cameras around the register you will be able to record any suspicious activity done by your employees, plus it may even scare an employee away from doing any malicious behavior. Beyond just helping during business hours, a security system will be a huge asset while your closed. With a night vision security camera system in place, you will have constant surveillance of your retail store even during the hours the store isn’t open. If any criminal activity is detected, you will be able to notify the authorities and they will be able to take action.

In addition to reducing theft, a security system will also assist in making sure your employees are providing great customer service. You will be able to see if your customers are having a satisfying and pleasurable experience while shopping at your business. Through the cameras, you will be able to keep an eye on employees and make sure they are providing satisfactory customer service. You will be able to see any inappropriate actions committed by your staff and will have the ability to educate or terminate that employee. Plus, should you receive a complaint from a customer about an employee, you will have the footage to see if the complaint is valid and if the employee should be reprimanded. Not only will the cameras assist with allowing your store to maintain a high degree of customer service, but through the cameras you will be able to ensure your establishment is properly staffed. You will be able to pinpoint the times when customer traffic is high and you will be able to schedule employees accordingly. For example, if you see through the cameras that every weekday from midday till 2 P.M there’s a long line and customers seem irritated by that, you could schedule additional employees during that time frame to assist in checking out customers. Likewise, when you see times when traffic is low and employees are just standing around, you could decrease the amount of staff at that time frame and lower your labor costs. As well as decreasing theft, security cameras will help with maintaining a high degree of customer service at your retail store, and help you curb labor costs. If you would like to read our review on different security systems starting under $100, check out our article, Security System Review for Convenience Stores, Gas Stations, and Retail Stores in 2020.

Mirrors

Shoplifters don’t want attention, and mirrors, just like a security system, make shoplifters feel like they’re being constantly watched. Having mirrors set up around your retail store is a very simple and effective way to limit shoplifting, especially when paired with a security system. Having mirrors placed to make the blind spots of the cameras visible is a great way to use them. Another benefit of installing mirrors in your store is that they give your staff improved visibility, especially of areas that would be hidden from view previously. A great mirror that I recommend for most businesses is this circular 18 inch glass mirror on Amazon. There’s a few different options for sizes if you would prefer a bigger or smaller security mirror. With this mirror, your team won’t have to work as hard to monitor the store for any suspicious activity. In my opinion, installing security mirrors in your gas station, liquor store, or convenience store will definitely help deter theft, but the greatest way to take advantage of security mirrors is to pair them with a security system.

Use a Point of Sale System (POS)

As a retailer limiting theft is a main priority, whether it’s customer theft or employee theft. A Point of Sale System (POS) will dramatically assist in limiting theft in your convenience store, liquor store, gas station, or any other type of retail store. 

The first benefit a POS system provides is that it keeps track of your inventory. Being able to track your inventory through your POS is critical in discovering where your shrinkage occurs. When you use an automated inventory tracker, all items in your retail store are kept track of in a central database. This will allow you to see where items are stored and how many items are in stock. This will help reduce theft by being able to easily determine what is being stolen. This is especially useful when doing regular inventory checks, comparing how many units you have on the floor, versus how many units your POS says you have. This feature makes inventory tracking 10 times easier and faster. Using a POS that constantly tracks your inventory will go a long way in helping you limit costly losses resulting from theft.

Like I stated earlier in the article, 45% of shrinkage in retail comes from employees. It’s obvious that not all employees are trustworthy, that’s why it’s important to assign different access levels for your POS. These different access levels (Cashier or manager logins, for example) allow you to control who can perform certain actions, such as voiding transactions or providing a discount. POS systems allow you to create unique logins with special permissions to areas of the POS they are authorized to access. This allows you to make sure some employees don’t have access to things they shouldn’t. Assigning different access levels for your POS will ensure that employees are only given access to information they need to do their job.

Lastly, like I stated in the previous paragraph, employee theft represents a big percentage of shrinkage in retail. Employee theft typically doesn’t receive as much monitoring as customer theft. $50 Billion is stolen from U.S businesses annually by employees. Having the ability to conduct random internal audits is a huge asset in combating theft in your business. Using your POS you will be able to run reports whenever you would like to see the sales your employees are making. This gives the ability to find suspicious transaction that may be occurring during a certain employees shift, which will be able to assist in pinpointing internal theft. Additionally, you can inform employees about the random internal audits, so they’re aware that you are searching for these suspicious transactions and may scare away impulse theft from employees. There is no sure fire method in preventing employee theft, but using internal audits, it may be easier to catch any acts of theft in your retail store.

Many retail store owners are missing out on key methods in preventing theft in their business. Using a POS system can help in the battle against theft, both from employees and customers. Using a POS system can assist in tracking inventory, allowing certain access levels to certain employees, and allowing you the ability to audit certain employees transactions throughout their shift.

Conclusion

Limiting theft in your convenience store, gas station, liquor store, or any other type of retail store is crucial for maximizing your profits. There’s no way to prevent theft altogether, but using these methods provided in this article, you will be able to limit theft enormously. If you enjoyed this article, you may be interested in our other article How to Pick the Best Employees For Convenience Stores and Retail Stores 2020.

Leave a Reply