NRF Small Business Resource

Five to Thrive: Loss Prevention

5 ways to create a safer and more secure environment
September 30, 2025

Five to Thrive: Loss Prevention

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Loss prevention is a critical aspect of running a successful small retail business. But it doesn’t have to be a costly or complicated endeavor. By implementing a few key strategies and integrating those strategies into your daily business operations, you can create a safer and more secure environment for your staff and customers while protecting your bottom line.

1. Empower and train your staff

Your employees are your greatest asset in preventing theft. Start with thorough training on proper inventory procedures and cash handling. Promoting an open and honest work environment where employees feel comfortable reporting suspicious activity is also crucial. Teach your staff the importance of customer engagement. A simple, warm greeting to every customer who enters the store and follow-up customer service can make potential shoplifters feel watched and uncomfortable.

2. Implement clear policies and procedures

Clear, written policies are the foundation of any effective loss prevention strategy. These policies should cover all types of potential loss, from external theft to employee mistakes and systemic errors. Focus on inventory receipt, recording sales and handling returns and damages. Develop policies involving employee, friends or family discounting, making it clear to employees when a discount is warranted and when it is not. Consistent enforcement of these policies is crucial for them to be effective.

3. Conduct regular audits and checks

Systemic errors and mistakes may be more costly than thefts. Conduct regular, even surprise, inventory checks and cash audits. These checks can help spot discrepancies and identify patterns of loss more quickly. Establish a structured inventory cycle that properly accounts for and determines a loss rate (shrink rate) between your book inventory, sales and on-hand inventory.

4. Optimize your store layout to safeguard against theft

The physical layout of your store can significantly impact theft prevention. To make it more difficult for thieves to operate, organize your store to create clear sightlines from all areas. Place small, expensive items near the checkout counter and larger, other high-value items away from entrances to make “grab-and-run” thefts difficult.

5. Utilize technology and security deterrents

While some security measures can be costly, many are simple and effective. A basic security system, such as a bell on the front door, can alert staff when a customer enters, making it difficult for someone to slip in unnoticed. Consider using security mirrors to eliminate blind spots. Visible anti-theft signs that state "Shoplifters will be prosecuted" or "Area under watch" can also discourage potential criminals. If your budget allows, invest in a video surveillance system. High-quality cameras not only deter theft but can also provide crucial evidence for investigations.