Countering Retail Theft Without Sacrificing Customer Experience

A concerning trend has emerged in the evolving retail landscape over the past few years: the spike in retail theft. As examples, Los Angeles and Dallas experienced staggering increases of 109 percent and 73 percent, respectively, in shoplifting incidents from H1 2022 to H2 2023. As the problem intensifies, communities are left grappling with the repercussions, witnessing stores either fortify their defenses through increased loss prevention measures or succumb to closure in a dire turn of events.

Despite increased security measures, this problem shows no signs of abating; nearly one-third of Generation Z individuals admit to stealing from self-checkout kiosks. As a result, retailers are looking for specific strategies that are most effective in preventing losses and minimizing theft. These include hiring more seasonal staff to discourage shoplifting; enhancing training for employees; and leveraging new technology. They're also determining the best approach to balancing added security while maintaining a positive customer experience. Here are some strategies we will see retailers implement more in 2024 and beyond.

Upgrading From Clothing Security Tags to RFID

One strategy retailers are trying to combat shoplifting is the use of RFID tags, These present advantages over traditional clothing security tags, which typically only transmit alarms when people try to hide items while silently exiting the store. By contrast, RFID tags offer a radio-frequency tracking system to combat shoplifting, with 39 percent of retailers saying they're researching or testing this type of solution. These tags can help to maintain up-to-date in-store inventory records and identify and recover stolen products.

Bolster Staff, But Also Bolster Training

Retailers commonly hire extra holiday support staff during peak seasons to strengthen their presence on the store floor. These seasonal hires help deter theft and provide better customer service while simultaneously monitoring inventory. But with more people on the floor, retailers should continually train employees on what they can and cannot do in the event of a theft situation. The emphasis should be on ensuring the security and safety of employees and customers rather than loss prevention. Retailers should also take care in selecting the right theft prevention policies for each store location. Jurisdictions differ in their “theft points” — i.e., the level of shoplifting at which they will prosecute — and this inconsistency can present a hurdle for retailers trying to address theft. They should make sure they customize employee training for each location so those on the sales floor know the right steps to take in a shoplifting scenario.

Rethinking Dressing Room and Return Policies

Some stores have also opted to close their dressing rooms to both prevent theft and eliminate the need for employees to monitor the rooms. This has the added benefit of freeing up more employees to staff the store floor as a theft deterrent. Moreover, some stores have adjusted or extended their return policies so there isn’t as much of a need for dressing rooms. Customers have more time to try on items at home and return them if they don’t fit. Offering a more seamless return policy can provide both a better customer experience and an alternative to using dressing rooms, which in turn can help mitigate shoplifting.

Carefully Consider What to Keep Under Lock and Key

One measure retailers can consider to mitigate theft is to lock away high-dollar items and carry fewer goods on the floor. However, this can cause a severe disruption to the customer experience if executed incorrectly or across too many items in the store. A YouGov survey found that 44 percent of U.S. consumers see products being locked as making for a “worse shopping experience.” This makes it imperative for retailers to gain a solid understanding of their customers’ desires and habits when implementing store changes like these.

For example, what types of products will shoppers wait to choose (baby formula, razors) and how long will they wait while an employee unlocks a case? Depending on the shoplifting trends in the area, certain retail locations may opt to lock, but they should do so sparingly and have sufficient staff on hand to quickly obtain the products behind the glass that customers need.

It’s clear that dealing with the spike in retail theft is a shared challenge that demands innovative solutions, no matter where your stores are located. Retailers have been trying to address this the best way they can, but will need to evolve and customize their theft prevention solutions to truly be successful. The challenge lies in aligning these measures with consumer expectations to ensure that modifications enhance rather than disrupt the shopping experience. This will not only secure businesses against theft, but it will also foster resilient communities where retailers can thrive and shoppers can enjoy a safe and positive retail environment.

Raphy Soussan is a partner at Mazars, an international audit, tax and advisory firm.