Store Loss prevention: losses, errors, remedies

In brief
The concept of Store Loss Prevention is the basis of the control and remedies needed for shrinkage problems. Errors and inefficiencies in the supply chain are associated with supplier fraud, shoplifting and employee theft. The consequences weigh in at more than one percentage point of the distribution company's revenues.

The concept of store loss prevention is more than ever relevant and applicable today for all retail businesses.The activities that need to be controlled are many. In fact, losses are caused by errors and inefficiencies in the typical processes of the supply chain and of the point of sale: from administrative errors to supplier fraud, from shoplifting to employee theft.

In the latter case, therefore, to cashier-related losses, which over time can generate inventory shrinkage such as to significantly affect the company’s annual turnover.


The problem of inventory shrinkage, if not addressed and solved with the right means, can lead to huge losses, both in terms of goods and money, the recovery of which is difficult and expensive.

In Italy, as in many other European countries, the most affected sector is food distribution, followed by clothing and mobile phones. In this case, more specific data and examples mainly concern the large retail sector and are very useful for understanding the problem and the possible benefits of adopting loss prevention technologies.

Some research estimates the value of inventory shrinkage in Italy between 1.1% and 1.4% of the annual turnover of the sector companies. 42% of the cases occur at the point of sale, where close attention must be paid to the checkout phase, where half of the violations take place.

Although 45% of these losses are associated with shoplifting for which a different type of control is required, 23% are attributable to employee theft, often directly during the handling of cash by not following the checkout procedures or due to errors in performing the activities assigned.


The consumer purchase path must be improved and, at the same time, made safer. The different in-store improvement areas on which it is possible and advantageous to intervene concern all transactions.That is, payment procedures, in particular through electronic cards, handling of prizes and stamps, operations linked to the fidelity account and cashiers operations. Employees are often involved in illegal actions on returns and exchanges, and the substantial damage caused to the company by these operations cannot be underestimated.


The possible benefits obtained from technologies suitable to the need primarily concern sales, which can be managed with greater control, contributing to the reduction of costs generated by losses.

What is more, not only the checkout procedure, but also the management of the daily internal processes will be improved and monitored so as to ensure strict compliance with the procedures while identifying errors and anomalies, leading furthermore to greater awareness, reduction of incorrect behaviours and also a stronger sense of responsibility by the personnel.

An appropriate store loss prevention solution allows for cost reduction, more efficient management, increased sales, greater brand competitiveness and a better working environment.