How do I Create a Loss Prevention Program?

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  • Written By: Kristie Lorette
  • Edited By: O. Wallace
  • Last Modified Date: 03 October 2019
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A loss prevention program for a business is a program that is implemented to decrease the loss of inventory or products in a business. For example, retail loss prevention is the steps the business owner takes to prevent the loss of products in the retail store from theft by customers and the shop’s employees. Fortunately, there are several steps that can be taken to implement an effective loss prevention for a business from an internal and external vantage point.

The primary way to create an internal loss prevention program is to institute an employee pre-screening process. For example, on an employment application, include a disclaimer that alerts applicants that you will be conducting a background check. A background check allows employers to search criminal records, pull a credit report and check with previous employers of the applicant. Conducting research to this level helps identify employees that may be at a higher risk for stealing from the business.

Second, create a written policy for employees as part of your loss prevention program. For example, you may write into the policy that if theft occurs within the store — be it from the cash register or the merchandise on the floor — that you will conduct lie detector or polygraph tests. The policy you create may also indicate that you will press charges if a polygraph or video system detects theft or the aiding of theft on the part of the employee.


Finally, if your store deals with cash registers then you need to have a counting policy for the till. For example, a manager should be responsible for counting the till with the employee when the employee goes on and comes off the floor. This figure should be reconciled with the cash register receipts to ensure that the money on the receipts matches with the money in the till. Since there are several ways cashiers can steal cash and have their till still balance at the end of their shift, this is where having a video surveillance policy in place helps. Using this combination of steps, you can implement a loss prevention program to limit the amount of loss and theft in your business.


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