1. Why Loss Prevention
• According to figures released by Euromonitor
International, the overall retail sector – both online
and in-store – in the Middle East is projected to grow
from approximately $996 billion in 2015 to nearly
$1.05 trillion in 2016.
• Although it is very difficult to get correct shrinkage
data in this region, it is estimated to be around
1.71% i.e $ 17 billions.
This directly goes from your profit

2. Retail Loss Prevention

3. LOSS PREVENTION= INCREASE PROFITS
Retail Loss has direct relationship with the profitability of an organization.
Quite often Retail Loss is associated with Shrinkage and with measures to
arrest shrinkage. And, to me, this is erroneous idea to start with. The
organization must recognize that the Retail loss does impact profitability
and the customer satisfaction. A merchandise not reaching customer is in
fact loss of revenue, profitability and the loss of customers.

4. What do we understand by retail loss?
What should we take into account?
According to loss prevention studies, there are four types of loss that we should
account for:
• Known loss is loss which can be identified, quantified and explained at the
time the loss occurs. Examples include: damage, distress, out of date,
customer returns, markdowns, etc.
• Unknown loss is loss that cannot be specifically identified. Examples:
Employee theft, shoplifting, etc.
• Loss of cash is when a company makes less than they plan on making due to
internal or external factors.
• Supply chain loss is when there is a disruption in the distribution of one of the
supplies on the supply chain, making the company lose those profits.

5. Types of Retail Loss
Broadly speaking Retail loss could be divided into:
Internal: Internal theft is referred to as employee
theft. It happens within the company. According to
2014-2015 Global Retail Theft Barometer Study,
employee theft was estimated to be responsible for
39% of store inventory shrinkage.
External: External theft is the stealing of merchandise,
cash, goods, or fraud resulting in loss by shoplifters.
According to 2014-2015 Global Retail Theft Barometer
Study, external theft accounts for 38% of inventory
shrinkage.

6. Share of Retail loss/Shrinkage
Retail Loss on Global Level
According to 2014-2015 Global Retail
Theft Barometer Study:
• US$ 123.4 billion is the total value of
the Retail Shrinkage.
• Average cost of Retail Crime per
person stands at $335.00
39%
38%
16%
7%
Employees Customers Acctg.& Admin. Suppliers

7. Internal Theft: Employees theft
Employee Theft: Much of the employees theft happens at the Cash counter/POS counter.
Employees reported to have stolen cash and goods from their work place. Some of the
common loss making examples are:
1) Most common being selling to friends and relative at discounted price.
2) Or entering zero amount transactions else punching lower price than /switching bar
codes.
3) Out right theft: store back room and the warehouse are two prone areas where
most outright theft happens.
4) Lost en-route: merchandise being diverted/pilferage en-route from warehouse to
shops.
Then there are “return fraud”:
5)False return: issuing return to friends /relatives without actually making any return.
6) Returning stolen merchandise that has never been purchased.
7) No receipt return: for a legitimate customer and later issuing the receipt to issue a
second return.
8) Ghost employees, non existed working hours: claim salary /wages for employees that
never existed or claiming hours more than worked. This happens wherever contracted staffs
are employed.

8. External Theft: Customers and service providers
External theft: External theft is the stealing of merchandise, cash, goods, or
fraud resulting in loss by shoplifters. According to the most recent survey done
by National Retail Security, external theft accounts for 30% of inventory
shrinkage.
1) Customers stealing merchandise mostly from the fitting rooms
2) Switching bar codes
3) Retuning merchandise without receipt
4) Discounted purchase “return” at full price
5) Shop Lifting
6) Pilferage while in transit
7) Loss the count of parcel in collusion with staff
8) Real Accident /damage in transit
9) Delayed shipment/arrival of merchandise
10) Short/ Excess/Damage merchandise

9. Mapping of all variables of potential loss
Supply chain mapping for the flow of goods/service, fund and information

10. Supply Chain disruption/suboptimal performance
1) Replenishment fall short of demand
2) Delayed merchandise
3) Late season/product launch
4) Inconsistent Forecasting
5) Quality issues
6) Not conforming to markets’ statutory
requirement: conformity certificates
7) Loss in transit

11. Most Stolen merchandise
Products easy to conceal, wide public appeal and
which could be easily resold:
• Footwear
• Batteries
• Mobile and Mobile accessories
• Razor
• Foods/drink items

12. Identify Common Shoplifting Methods and Traits
Shoplifters are often never alone. They usually try to have
someone else there in order to distract the employees. The
shoppers have to be able to hide the merchandise and here is
how they usually hide it.
• Clothing
• Handbags
• Strollers
• Umbrellas
• Purchased merchandise

13. The End of Retail Loss
Picture from: Loss Prevention Media

14. How to fix Internal Shrinkage/Theft
EAS
Fixtures
Manual Screening
Employees Training
Optimize Supply Chain practices
Data analytics and benchmarking
Background check of employees before hiring

15. External Shrinkage or Theft
Insurance
Source Tagging
Secure the premise
Secured Fitting/Trial Room
Disseminate information of measure taken
by retailers for the safety and security

16. The future of Loss Prevention
E-commerce theft
and fraud
Seven Types:
• Identity theft
• Friendly fraud
• Clean fraud
• Affiliate fraud
• Triangulation
fraud
• Merchant
fraud
• International
fraud
Identity theft
Counterfeit and
Grey market
• Also a type of e-
commerce theft
and fraud
• Stolen identity in
order to commit
fraud
• Types of Identity
Theft:
– Child ID theft
– Tax ID theft
– Medical ID theft
– Senior ID theft
– Social ID theft
• Legal but unintended sale
by the manufacturer
• Sale of imported goods
which would otherwise
be either more expensive
or unavailable in the
country to which they are
being imported.
• Example: Apple products
which are not sold in
South Korea, being sold
to those in South Korea
with manufacturer
knowledge

17. Questions?

18. Thank you