In our latest article, we are discussing the hefty topic of loss prevention – in particular, how loss affects US retail businesses, how retailers ensure the prevention of loss, and the ramifications of failing to make loss prevention a priority. Throughout, we seek to answer the question ‘what is loss prevention?’, understand why it’s crucial, and learn how to achieve cash loss prevention with a cash management solution.
With around 75% of US businesses affected by employee theft and even more affected by time-consuming and inaccurate means of counting cash takings, now is the time to consider which loss prevention approaches could work for your business.
What is Loss Prevention?
Loss prevention in practice means different things for different businesses, but broadly loss prevention refers to the minimization or prevention of theft and general loss within a company. (Ref: Investorwords.com).
To give an example for bricks and mortar retail businesses, one loss prevention strategy may be a program where unique tags are secured to high-value products that sound an alarm if it is not deactivated correctly or removed before leaving the store. This is a reasonably effective strategy to minimize customer theft.
However, this definition focuses on the customer, so it is unsurprising that many retailers also forget to consider internal loss prevention, particularly if you handle cash. If this is you, the below statistics will shock you:
- Employee theft in the US has increased by 3.8% recently.
- On average, each dishonest employee costs retailers $1,551.66, up from $1,139.32 in 2021.
- Retailers report that, on average, 5% of revenue is lost due to employee theft each year, costing employers up to $50 billion annually.
- Manual cash counting takes a lot of time and results in inaccurately reported register counts leading to reduced profit and customer satisfaction.
Why is Loss Prevention Important?
According to Indeed, the following points summarize why loss prevention is essential for US businesses:
- Loss prevention positively impacts a company’s bottom line.
- It helps prevent shoplifting and other types of theft that negatively affect the company.
- Helps improve customer experience and satisfaction by ensuring inventory levels are correct, with the correct amount displayed and available for purchase.
- Prevents inventory deterioration and damage (for example, when inventory spoils or wastes).
- Reduces employee theft.
- Helps promote employee ownership and responsibility, which leads to increased staff morale and engagement.
- May prevent supplier error or fraud.
- Reduces administrative errors such as incorrectly priced items and accounting errors.
How to Ensure Cash Loss Prevention
As the world’s leading producer and seller of global cash management solutions, naturally, we would suggest a Cashmaster device to either drive forward your existing loss prevention strategy or get you started on the right footing.
So, how do you prevent cash loss with a Cashmaster device?
Counting cash without automation technology is both laborious and time-consuming. The reality is this; extra hours are needed to ensure that money is counted at the end of shifts. With more hours comes increased labor costs, negatively impacting your bottom line. Let’s not forget the number of administrative errors that happen due to this time-consuming and manual task too, which leads to incorrect reporting and subsequent recounts.
Cashmaster One, with its integrated printer, can help provide an automated solution for in-store cash management and can significantly reduce, if not completely remove instances of employee register theft, all while increasing employee accountability and job satisfaction.
Here are just a few examples of how our Cashmaster devices can specifically help with Cash Loss Prevention:
- Capture traceability information, such as Cashier/Manager and Register IDs associated with every count
- Reduce the time required to complete counting tasks, whilst allowing them to be carried out more frequently thus enabling robust controls to be put in place for minimal overhead/resource
- Eliminate errors in records and data entry, preventing clerical errors and ensuring more time to focus on real losses
- Increase accessibility of cash count and audit data, reducing the time required to investigate discrepancies
- Allow tracking of compliance with company cash counting procedures
- Standardize cash-counting activities
- Promote accountability of staff
Streamlining your loss prevention strategy can decrease loss, reduce overheads, improve your bottom line, and can result in quick and impactful improvements for your business and team. In fact, most of our customers begin seeing an ROI after only a few weeks of using our easy-to-use solution.
If you want to find out more, or you want to view a demonstration of our loss prevention solution, get in touch with our Product Team!
We hope you found this article helpful and shed light upon the commonly misunderstood ‘what is loss prevention?’ question. Not ready to act quite yet? Why not check out how much you could save with a Cashmaster device using our online calculator or check out our other helpful articles for further reading?