Retail Loss Prevention: 7 Powerful Tools & Technologies to Help You Reduce Shrinkage

Loss prevention continues to be a major concern for retailers, and for good reason: losses due to employee theft, admin errors, and shoplifting cost you a lot of money. According to the NRF, the US retail economy lost $45.2 billion in 2015 due to shrinkage.

Clearly, retailers need to be more vigilant about loss prevention. To help you do that, we’ve put together a list of solutions for reducing shrink and improving store security.

From tools that you can install easily to technologies that require a bit of an investment, check out the items below and see if you can use them in your stores:

1. Signage

Installing security signs in your store is a low-cost way to deter shoplifters and shady characters. Anti-theft signs should be fitted close to the entrance and near your fitting rooms.

Here’s a tip. Walk into your store and ask yourself: If you were a shoplifter, where would you go? The answer to that should help you determine the best places to install your signs.

Shoplifters Beware

As for the content of your signage, you want to remind people that shoplifting isn’t tolerated and that there will be consequences. According to the San Diego Police Department, your anti-theft signs should “emphasize that you will prosecute” and that “the best way to discourage shoplifters and keep your business from being tagged as an easy mark is to take a get-tough attitude and prosecute on the first offense.”

2. Cameras

If you’re willing to invest a bit more in store security, consider installing surveillance cameras in your stores. Doing so will allow you to monitor store activities 24-7, and it’ll give you recordings that you can revisit if necessary.

Depending on your store and the security system you already have in place, you may be able to integrate your cameras with your POS, foot traffic solutions, and other loss prevention programs.

Consider what American Apparel did. The clothing retailer combined its foot traffic management and loss prevention tools in one system. The company used RetailNext’s searchable video solution to track how people moved around in their stores and combined that with foot traffic insights.

According to RetailNext, “American Apparel was able to interpret streams of digital video and recognize human beings moving through the stores, opening up broad capabilities for measuring shopper behavior inside its environment. This capability enabled American Apparel to measure not only the number of store visitors but also shoppers’ movements within the store — where they walked, where they stopped and how all these behaviors tied to actual sales at the register.”

Using those insights, the retailer was able to beef up its loss prevention efforts and ended up reducing theft by 16%.

3. Mirrors

Not too sure about using cameras in-store? Consider mirrors instead, which can serve as inexpensive yet effective tools for spotting shoplifting and other suspicious activities.

Do a quick walk-through of your store to see if there are any blind spots. If you spot some, then you may want to may want to install security mirrors to monitor those areas. Typical blind spots include corners that aren’t too visible from the cashier’s side, as well as areas which are blocked by fixtures or shelves.


And the good news is, it’s quite easy to purchase these mirrors. You’ll find a lot of them online or in the nearest office supplies stores, with price ranging from around $30 to $300.

4. POS system

Most modern point-of-sale systems allow you to set user permissions to enable or restrict certain tasks from being carried out. That’s why if you haven’t done so yet, check with your POS solution provider and see how you can update user permissions in your store.

Jordan Lewis, the inventory product manager at Vend, says that these permissions go a long way in preventing shrink.

According to him, it’s best if retailers set user roles based on the individual instead of the job title.

“I see a lot of companies applying the same user permissions for all managers or for all admins. But what merchants should do instead is assign permissions based on the tasks you want each employee to perform and restrict them from doing tasks outside their job description.” 

He adds that retailers should be especially vigilant with voided sales and who can perform them, as this is a very easy way to steal stock.

5. Inventory management tools

Staying on top of your inventory is critical to loss prevention. Poor stock control leads to more misplaced products and unchecked discrepancies, which is why it’s important to arm yourself with a robust inventory management system that’ll make it easy for you to track merchandise.

One thing to look for when choosing inventory management tools is the capability to conduct full and partial stock counts.


Are you a Vend user? Be sure to utilize Vend’s inventory counting features when implementing cycle counting at your store.

“Counting your stock more often allows you to notice discrepancies earlier and keeps your financial records up-to-date,” says Jordan. “Aim to conduct smaller counts regularly with the goal of covering all your inventory through multiple counts.”

Jordan furthers that retailers should “count proactively, not reactively.”

This will give you the best chance of correcting any discrepancies sooner rather than later. If you wait until you have to do a full inventory count, you’ll fail to catch issues early, and the damage would’ve already been done.

Once you’re done counting, you need to actually do something with the information, says Jordan. “Use inventory reports to identify high-risk signs or regions in your store, and make sure your staff understands where these areas are, and how to minimize stock loss.”

“It’s also beneficial to compare multiple completed inventory count reports with the aim of seeing patterns and discovering root causes of the discrepancies,” he adds.


If you want to learn more about using POS permissions and inventory management to reduce shrink, check out our previous webinar, How to Set Up Winning Inventory System for Your Retail Store.

7. Inventory counters

Speaking of inventory counts, you’ll want to have a reliable tool for conducting stock-takes. Avoid using a pen and paper when counting inventory. Arm yourself and your staff with a solution that enables you to count your products efficiently and accurately.

A perfect example? Scanner by Vend — a nifty mobile app that lets you conduct physical inventory counts using your iPhone, iPad or iPod Touch.

Just scan an item’s barcode using your phone’s camera and Scanner will automatically record the SKU for you. Scanner also syncs completed counts with your Vend account, so once you’re done counting, you can easily update your stock levels.

Not a Vend user? Scanner will create a CSV file that you can email to yourself or your staff.


RFID (Radio Frequency Identification) comes in the form of chips embedded in product tags or packages. These chips contain product information and enable retailers to track items using their stock control system, so merchants can gain real-time inventory visibility and accuracy.

When used correctly, RFID technology can help you prevent losses in various stages of the supply chain as well as combat theft and misplaced products in-store.

Retailers that affix these tags right after manufacturing can track products as they move from one stage of the supply chain to the next. This allows them to prevent losses during the distribution process.

When implemented in-store, RFID enables merchants to locate items and ensure that products are in the right place at the right time. The technology can also help retailers catch shoplifters. If someone attempts to walk out of the shop with RFID tags still attached to the merchandise, your store’s security sensors could go off and alert your staff.

Additionally, RFID makes counting much easier. Rather than handling items one by one, inventory counts with RFID can be done with a handheld reader while items are still in their boxes or shelves. Associates would simply have to walk to the display with their reader, and the software will display the necessary product information.

Recommended reading

Need more practical tips on loss prevention? Check out our article on reducing shrink and beefing up security in your store.


While the solutions above can definitely help in increasing store security and reducing shrink, don’t forget that the success of your anti-shrink initiatives lies not just in these tools, but in how you use them.

Before you jump into these tools or technologies, be sure to assess your needs and create a plan that you can implement.

Good luck!

What other shrink-prevention solutions are you using in your business? Tell us in the comments.


About Francesca Nicasio

Francesca Nicasio is Vend's Retail Expert and Content Strategist. She writes about trends, tips, and other cool things that enable retailers to increase sales, serve customers better, and be more awesome overall. She's also the author of Retail Survival of the Fittest, a free eBook to help retailers future-proof their stores. Connect with her on LinkedIn, Twitter, or Google+.

  • Gavin Bottrell

    “Count proactively, not reactively” is a good atitude to have to stay on top of your inventory. Thanks for sharing these useful tips.

    Gavin Bottrell
    Bottrell Business Consultants

  • Frank Yiu

    I have a friend who is famous as he lost one phone a year and this should help

  • Sahib Singh

    Exactly, as you said, “While the solutions above can definitely help in increasing store security and reducing shrink, don’t forget that the success of your anti-shrink initiatives lies not just in these tools, but in how you use them.”

    I would like to add more about security cameras that have always played a big role in preventing retail theft. Installation of cameras creates an environment for employees and customers that they are being watched regularly. However, if you are doing it in-house, you are likely going to miss out on some important details or events. This could be due to partial audits by internal staff, to prevent their friends or other close colleagues from being punished. Or a surveillance staff member could be a part of the internal theft, creating a non-repairable breach in the security system.

    For this, you have the option to outsource retail surveillance service to a professional like GizmoSupport, cutting down any personal contacts and partial audits. This further helps reduce inventory shrinkage as well as optimize store operations.

  • Victor Kimori Waweru

    Francesca, your article is very informative. As an under graduate in Security management I find this article very useful. More so as I am searching for info to enable me do my assignment in retail security. Keep up.

    • Glad you found it helpful, Victor! Good luck with your assignment.

  • Arbel Englander

    Really great article Francesca!
    We are a startup company that deals with exactly that, Loss prevention in SMB retailers. From our client base we hear a lot of cases where you have all the tools for loss prevention (cameras, RFIDs etc.) But as you said, it really depends on what you do with them. A great number of retailers just don’t have enough resources to keep up with everything. Again as you said, you need to create a plan that you can implement.

  • Gayathri VJ

    Great article ! You can also mention Hashmybag. Its a great app to communicate and promote store to your customers.