Most US Loss Prevention Systems Only Deal With The Tip Of The Iceberg

A few months ago, a man strolled into a retailer in a small New Jersey town. He looked relaxed wearing a navy sweater; his sunglasses propped up on his head. No one suspected he was about to steal three purses. A few hours later, a woman enters the same store, heads for the cash register to return the very same previously stolen handbags and asks for cash back. She knows she will get the money — they already scammed other local stores before.

(Photos provided by Mount Laurel Police)

(Photos: Used with permission of the Mount Laurel Police)

While it’s only a matter of time until they get caught by the police, the damage to this specific retailer is far bigger than the value of the purses alone. According to the Global Retail Theft Barometer report, every year 1.29% of U.S. retail revenue is lost to shrinkage. However, the outdated loss prevention systems in place just deal with a fraction of the problem. There is so much more to win.

Most US Loss Prevention Systems Do Not Tackle The Real Problem

Most retail stores in the United States are equipped with radio frequency (RF) or Acusto Magnetic (AM) based electronic article surveillance (EAS) solutions. Since these systems are electronic-based and not software-driven, they merely sound an alarm if a tag shows up in their electromagnetic field. Otherwise, the EAS system knows nothing.

Employees have become accustomed to the alarm going off — many times for the wrong reasons. For example, an incoming customer brought a reactivated label from a different store into your shop or merchandise with an active tag that fell within the electromagnetic field. Since it is embarrassing to confront a customer as a putative shoplifter, many employees shy away from pursuing the client and the loss prevention system is useless. Many front-line workers even see a loss prevention system more as an obstruction than a helpful tool which can assist them.

However, the much bigger problem is that the retailer does not know which item was stolen resulting in:

  • An inability to sell supposingly in stock items (stolen display models),
  • A larger inventory in stock to make up for stock inaccuracy,
  • Customer frustration when items are out of stock,
  • Inconsistent shopping experiences between online and in-store.

Software-Driven and RFID-Based EAS Systems Inject Intelligence Into Loss Prevention

A software-based EAS solution can alleviate this somewhat as it distinguishes between incoming, outgoing and non-directional alerts and has additional layers of intelligence. However, it will not be able to tell which exact item was stolen — only an RFID loss prevention solution can do that.

Additionally, you can glean analytical insights from your retail analytics and dashboarding solutions. This data can be used to learn more about the causes for the alarms sounded and better eliminate false alarm situations. You can also be on top of your system’s health and status to constantly improve performance and avoid service calls.