SPECIAL REPORT

What Is Loss Prevention?

Retail Loss Prevention Tips from the Experts

R
etail loss prevention refers to the collective
measures taken by a retail company to mitigate
losses and protect profitability. Some retailers
may also refer to this practice as asset protection
and while subtle differences exist between the two
terms based upon specific responsibilities and
organizational approach, they are often used
interchangeably throughout the industry.
While each retail company approaches the
mission and purpose of their loss prevention
programs based upon the unique needs, structure and
culture of the organization, at its core the role of loss
prevention is to enhance the profitability of the
company just like every other role in retail.
Primarily, that role focuses on the reduction of
shrink. We look at all of the various issues that can
potentially lead to losses, devise strategies to
minimize those pitfalls within the business, and
implement strategies that are practical, actionable,
and consistent with the goals of the business.
From a global perspective, the role of loss
prevention and its importance to an individual
organization must reflect intrinsic business value. A
consistent role definition that transcends industries
will increase shareholder and investor understanding
of our impact on the bottom line, states Suni K.
Shamapande, a seasoned industry veteran, in a recent
article in LP Magazine. If investors view companies
with strong asset protection or loss prevention
programs as more secure and better monitored, with
enhanced checks and balances, then we increase the
business value.
Often, retail loss prevention departments are
recognized as the compliance monitors of company
policies and procedures as well as the team
responsible for protecting the organization's assets
whether those assets are considered more tangible
such as merchandise/physical inventories, cash, or
facilities; or other valued assets such as the
companys customers and employees, consumer
records, or the company brand.
Additional responsibilities may include
compliance auditing, training & awareness programs,
internal & external investigations, safety & risk
management, inventory management, physical
security standards, security system design &
integration, business continuity & disaster recovery
planning, and ethics enforcement.
While retail loss prevention presumes activities
associated with retail commerce, there are many
similarities between security-, loss prevention-, and
asset protection-related functions in other industries
including but not limited to the food service,
hospitality, and other service-based industries.
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While no two retail companies or loss prevention
departments operate in the same manner, with the
same structure, or the same philosophies, there are
enough similarities that exist as to define the mission
of retail loss prevention across the entire industry.
The heart of a true loss prevention culture focuses on
the concept of managing incidents before they
happen; instilling a mindset of responsibility,
organization and control as a means of supporting the
business, mitigating losses and enhancing profits.
History
For decades, retailers employed security
personnel to help protect the investments that they
had in their stores and provide a visual deterrent to
would-be shoplifters. Uniformed officers would
monitor the stores, providing the perception of a
secure shopping environment where shoplifting and
other criminal offenses would not be tolerated. This
highly visible security posture offered an image of
authority and enforcement to curtail potential threats
to the business. Often perceived as a necessary, but
unattractive and largely unwanted cost of doing
business, the value of such defense was contrasted by
the extent of its potentially negative impact.
Over time, retailers came to recognize that losses
extended well beyond the limits of petty shoplifting.
The complexity of the thief progressed with the
development of the retail industry; escalating both the
threat and the financial consequences. With theft,
fraud, and other criminal acts cutting deep into
company profits, retailers were forced to modify their
approach to protect their investments and their
business.
In response, retailers began to develop teams of
employees to protect the stores from the various
elements that threatened the business. While still in
its infancy, these teams generally became known as
Store Security, or the Loss prevention team. Plain-
clothed Store Detectives complemented or replaced
the uniformed security officers; responding to
potential issues, known threats, or specific loss
incidents.
There was a learning curve as the groundwork
for an industry was established. In the early years of
the profession, attention focused on catching the
crook. Success was measured based on the number
of dishonest employees and shoplifters that were
apprehended each year, with improvement
measured by catching more perpetrators than the year
before. Many retailers began to utilize additional
anti-theft devices to help in this endeavor. Two-way
mirrors became more prominent. Hidden observation
towers were devised to help monitor activity on the
selling floor. Lanyards and locking cases were used
to secure more valuable merchandise. Radios were
used to improve communication. Alarm systems
became more sophisticated and more specialized to
improve control and detection.
As incidents mounted and newer and better
technology became available, closed-circuit
television/camera systems (CCTV) became
commonplace in many larger department stores. With
CCTV, stores had the ability to build surveillance
systems capable of overseeing large areas of the sales
floor as a means to detect shoplifting and other
criminal activity. Covert (or hidden) camera systems
were crafted that could monitor employee activities
and identify internal issues. Systems were eventually
developed that could capture suspicious activity to
video and utilized as evidence when necessary and
appropriate.
With these systems available to complement the
security teams, shoplifter apprehensions and other
security efforts were taken to another level. However,
as the business of retail continued to evolve, so too
did the sophistication of the criminal element.
Investigations became more complicated, as did the
approach to the investigative process. Theft, fraud,
and other criminal incidents can impact anywhere
from the time that it is ordered by the retailer to the
time that it is delivered to the customer. Supply chain
incidents, online shopping concerns, counterfeiting,
brand protection, and all types of Organized Retail
Crime issues demand the attention of loss prevention
departments as the challenges continue to strike from
within the employee base as well as through outside
influences. In response, loss prevention teams have
become better prepared, better trained, and more
inclusive in their perspective and approach to the
responsibilities of the department.
While highly effective at identifying and
thwarting many criminal incidents within the stores, a
reactionary approach to business concerns is not
conducive to true retail success. Companies came to
realize that profit management required a
commitment to controlling losses, with greater focus
placed on preventing incidents before they occur.
Programs had to develop a more proactive approach
that complemented the business without detracting
from the customer experience. The scope and mission
of loss prevention departments had to become more
global to support profit enhancement while
mitigating company losses.
Theft deterrence through training and education
became more prominent. Awareness programs were
created to better engage the sales force and support
loss prevention management. Audit programs were
designed to strengthen operational compliance and
improve store controls. Electronic Article
Surveillance (EAS) systems were developed to
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enhance product protection while maintaining
product access. Exception reporting systems were
established to better monitor and investigate point-of-
sale activity in the storesEvery program and
strategy proactively designed to prevent and detect
losses while supporting the culture, mission and
vision of the retail business.
Based on the business needs, many loss
prevention departments also became involved in
safety programs, incident response, emergency
management, documenting and/or investigating
workers compensation claims, customer accidents,
and other general/premises liability claims. As the
needs of the retail organization continued to expand,
the scope of departmental responsibilities broadened
and the skill sets of the team were strengthened
accordingly,
Today, loss prevention departments are
considered an integral component of a successful
business model, requiring global approaches and
flexible strategies to meet the dynamic needs of the
retail environment. The loss prevention professional
must embrace the role of a business partner; sharing
perspective and cooperation while accepting the
challenges of our evolving responsibilities.
Gone are the days of LP professionals living
their professional lives as crime stoppers. Retail
crime remains a significant risk that will require our
ongoing attention. But, today there is much more to
retail LP than fighting crime. Thanks in part to
corporate reorgs and budget constraints, LP
professionals have been forced to diversify.
Individuals hired years ago to catch shoplifters have
taken on additional roles, like safety manager,
hazmat specialist, HR investigator, and auditor.
Lisa LaBruno
Vice President of Loss Prevention & Legal Affairs
Retail Industry Leaders Association
Modern Loss Prevention Strategies
As with any department or division within any
company, loss prevention teams are built to add value
to the organization. While value can be measured in a
variety of different ways, primarily that value is
measured in terms of the reduction of key financial
metrics such as shrinkage reduction and/or safety
performance.
Shrinkage can best be described as the amount of
merchandise physically available in a location versus
the amount of inventory that location is supposed to
have according to its inventory records. In simple
terms, it is missing product. There are various issues
that can contribute to inventory shrinkage beyond
incidents of theftoperational errors, miscounts,
inaccurate vendor shipments, poor receiving
practices just to name a few. All inevitably impact
the profitability of the organization and must be
considered as part of a comprehensive loss
prevention initiative. Modern loss prevention
departments tend to focus on the root causes of these
losses and employ strategies designed to lessen the
impact on the companys bottom line.
The Retail Industry Leaders Association (RILA)
has focused on Root Cause Analysis as a means of
driving improved shrink results. This process-driven
initiative is aimed at:
Identifying the origin of problems or events to
determine what actions, behaviors or conditions
need to be modified to prevent recurrence of
similar outcomes;
Ascertaining the lessons that should be learned as a
result; and
Establishing a course of action that leads to
improved performance.
According to Lisa LaBruno, This important
industry initiative focuses on the key role operational
breakdowns play in explaining the root causes of
shrink and the development of sustainable methods
for retailers and product manufacturers to collaborate
in creating effective shrinkage control practices.
Academic research and practical application of
available data also play an important role in todays
strategies. In an effort to document the effects of
shrinkage in the retail industry and to allow
companies to benchmark themselves against peers
and emerging trends, the University of Florida
annually publishes the National Retail Security
Survey (NRSS). The NRSS is a voluntary collection
of data from over 140 retailers throughout the United
States. Dr. Richard Hollinger, Professor of
Criminology at the University of Florida, leads the
annual NRSS project and solicits collaborative
feedback and data from with various industry groups
including the National Retail Federation, the Food
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Marketing Institute, Retail Leaders Industry
Association, and the Loss Prevention Research
Council.
The National Retail Security Survey reveals that
U.S. retailers lost approximately $37.14 billion to
inventory shrinkage in 2011, accounting for nearly
1.58% of gross sales. By comparison, retailers lost
approximately $35.28 billion or nearly 1.486% of
their annual sales in 2010.
Increased shoplifting and shrink rates mirror
what retailers are seeing with professional and
organized crime ringsRetailers are continuing to
put resources in place to fight these self-serving and
unethical criminals who walk out with billions of
dollars in unpaid merchandise every year.
Joe LaRocca
Senior Asset Protection Adviser
National Retail Federation
The NRSS further breaks down these $37.14
billion in losses by suspected causation as reported
by retailers and industry partners. These losses are
further broken down by categories of loss:
Employee/Internal Theft: $16.2 billion, or 43.7%
of total losses.
Shoplifting/External Theft: $12.1 billion, or 32.6%
of total losses.
Administrative Errors: $4.8 billion, or 12.9% of
total losses.
Vendor Fraud: $2 billion, or 5.4% of total losses.
Unknown: $2.04 billion, or 5.49% of total losses.
Note: An average of 18.7% of internal cases involved
collusion with an external source.
The modern loss prevention mission is much less
about undercover investigations and more about
proactive measures designed to prevent losses. For
example, one of the more important components of a
quality loss prevention program is the concept of
empowering associates and the value that they add to
the program by simply being vigilant in their day to
day responsibilities. Customer service is the
cornerstone of every successful loss prevention
program. Greeting every customer, being available
for assistance, and paying attention to customer needs
drive sales while providing an exceptional customer
experience. It instills customer loyalty, and propels
company performance. But those same attributes
deter theft and dissuade other forms of shrinkage.
Organization, control, attentiveness, service and
customer courtesy are the greatest weapons against
theft and shrinkage.
Risk vs. reward is an important aspect of many
loss prevention initiatives. There must be a balance
between the needs of the business, the service and
convenience provided to our customers, and the
protection of company assets.
For example, many department store retailers
have both a fine jewelry department as well as an
assortment of fashion jewelry and accessories. Fine
jewelry is often protected by glass cases, audible
alarms, and CCTV coverage while accessories &
fashion jewelry can typically be handled openly by
any passing customer. Looking at cost vs. reward, it
simply wouldnt be feasible or cost-effective to
attempt to protect fashion jewelry in locked cases.
Not only would the cost of the cases cost far
outweigh any anticipated losses, but the retailer
would need to dedicate staff to lock/unlock cases as
each customer wanted to view merchandise. Lacking
the ability to handle the product, many customers
would simply move on, and a sale would be lost. By
the same respect, locked cases are critical to
protecting fine jewelry. The cases serve to safeguard
the product, while the dedicated sales team provides
the service and attention necessary to enhance sales
performance. Balancing protection, service and sales
performance is a critical aspect of effective loss
prevention strategies.
Todays loss prevention departments need a
comprehensive plan. Programs must effectively
protect company assets while complementing the
overall mission and purpose of the business. Business
perspective must be a driving force in program
development. It will help decide the overall mission
and purpose of the department. It will help determine
what resources are needed to be successful. It will
establish what authority the department holds, and
how the program will be perceived throughout the
organization.
External Threats
Perhaps the most common external threat for
retailers is shoplifting. Shoplifting goes by many
different names; however, at its most elementary,
shoplifting is the theft of goods from a retail
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establishment. Shoplifters come in all shapes and
sizes, but initially, they can be defined as either
amateur or professional shoplifters.
The amateur shoplifter is typically the
inexperienced and often the tentative or indecisive
shoplifter. Amateur shoplifters frequently steal out of
need to service a personal desire; like the teenager,
for example, whose parents will not allow him to buy
the new clothes that all of his friends are wearing. Or
even the parent, wanting to indulge in the newest
fashion, but has other bills to pay instead. While
certain items are more likely to be stolen, shoplifters
are only bound by their desires and imagination.
Some steal out of perceived need, however many
have enough money on their person to have
purchased the items taken. About 1 in 3 shoplifters
are believed to be at risk of committing future acts
of shoplifting.
Professional shoplifters earn their living by
stealing merchandise, and then selling or fencing the
items. For these folks, shoplifting is a business. Often
they travel in teams, and frequently they are part of
an Organized Retail Crime network. When they steal,
they do not usually attempt to steal one or two small
items. Its usually multiple items; or even whole
racks of merchandise at a time.
Organized Retail Crime involves the association
of two or more persons engaged in illegally obtaining
retail merchandise through both theft and fraud as
part of an unlawful commercial enterprise. The
primary objective of these professional crime rings is
to steal from retail organizations for the purpose of
turning products into financial gain, rather than for
personal use.
According to the National Retail Federations
2014 Organized Retail Crime survey, of the 76 senior
retail LP executives that participated, 88.2% stated
that they had been the victims of Organized Retail
Crime in the past year. ORC operations can range
from simple to extremely complex, with most
strategically coordinated and well-planned. Groups
are highly motivated and exceedingly mobile. They
will typically cover a wide geographic area, and can
operate on a local, regional, national or international
scale.
The partnership between the private sector loss
prevention community and law enforcement agencies
is critical, and establishing viable relationships and
information sharing is seen as a cornerstone of any
successful program. In response, the Law
Enforcement Retail Partnership Network
(LERPnet2.0) was established. LERPnet2.0 is a
nationwide program that provides both retailers and
law enforcement with real-time theft and incident
data so that investigators, public and private, can
build more effective relationships, collaborate on loss
investigations, and resolve retail crimes at a higher
and more productive level.
LERPnet2.0 provides an industry data sharing
platform for retailers to report, share and analyze
their retail theft and critical incident data. It is
designed to be the national standard for sharing
retail crime information in a secure and confidential
manner. Incident details may be shared with law
enforcement while retailers take advantage the many
system tools including: automated alerts and recent
activity notifications; intelligent link-analysis;
investigation collaboration tools; full text search
capability; and advanced system reporting. With
LERPnet2.0, retailers and law enforcement will be
able to fight back against illegal activity including
organized retail crime, burglaries, robberies,
counterfeiting, and online auction fraud.
www.lerpnet2.com
Other External Threats
Bad checks: Bad check losses cost retailers
0.03% of their annual sales.
Cash Losses: Cash losses cost retailers 0.91% of
their annual sales.
Credit Card Losses: Credit card losses account
for 0.49% of a retailers annual sales losses. (For
more information about what the credit card industry
is doing to protect cardholders and companies who
transact credit card transactions, see the Payment
Card Industrys Security Standards website at
www.pcisecurity.org.
Refund Fraud: Fraudulent refund practices
account for 0.09% of a retailers annual sales losses.
Internet Fraud Orders: Internet fraud orders
account for 0.01% of a retailers annual sales losses.
Internal Threats
The investigative process is fundamental to
determining the causes of internal losses no matter
where we believe the source of that loss may
originate, or where the results of an investigation
might take us. Often, the source of the loss is
dishonesty, but there are other potential causes of loss
that can have tremendous impact on the success of
the business and are no less important for us to
investigate.
While a global and balanced perspective is
absolutely essential to building a successful loss
prevention career, the ability to investigate remains a
skill that sets us apart. The passion to solve a
problem, methodically and objectively gathering the
pieces and separating fact from conjecture; the
analytical process of finding substance in the core of
uncertainty; and the intuition to find answers when
others can only see questions is initially what draws
many into the loss prevention field. However, in
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retail loss prevention investigations shouldnt simply
produce results; they should promote action.
If we are truly looking to serve the best interests
of the business, solutions should reach beyond
correction, and influence improvement.
Investigations are often considered reactionary, as
they typically occur after a certain event (usually a
negative episode) has taken place. However, the
results of our investigations can also be used as a
proactive means to deter similar issues. Once we
have determined the root cause of a particular issue,
the results of our investigation can be useful in
determining additional controls and corrective
measures in order to deter the same type of issues
from happening again.
In the retail environment, the majority of internal
investigations involve acts of theft. Internal theft, or
simply theft involving company employees, causes
the most damage to retailers on an annual basis;
responsible for the greatest financial loss and a
substantial impact on the business. Because
employees have greater access to more systems, more
products and more areas of the store than customers,
internal theft can affect a business much more
quickly and to a significantly greater extent than most
external theft incidents.
As varied and diverse as individuals can be, so
too are the types of theft that employees can become
involved in. People have different agendas. Each has
their own circumstances, and may have access to
merchandise, cash or company property in different
ways, different environments and be presented with
different opportunities. While businesses may have
particular types of internal theft that are more
common based on their specific business model, we
should never underestimate the creativity that some
individuals may possess. The diversity of the
incidents that we may become involved with are only
bound by the limits of our imagination and the
shortfalls of human integrity. Billions of dollars are
lost every year as a direct result of internal theft.
Why do employees steal? According to
American criminologist Donald Cressey, three
distinct factors exist in nearly every fraud:
Motivation: The driving force behind the desire to
commit the fraud/theft
Rationalization: The self-justification that helps to
validate why it is permissible / acceptable to
commit the fraud/theft
Opportunity: The situation that is created or the
ability that exists which allows the act to be
possible
Every aspect of the investigative process is
important, and requires our attention and due
diligence. Frequently, this requires that our skill sets
reach out beyond the numbers, and we look to build
and support our facts through additional means. In
order to successfully close an internal case it is often
necessary to obtain a confession from the dishonest
associate. Being able to conduct an adequate
interview and bring it to a successful conclusion is
one of the hallmarks of those who excel in loss
prevention.
The effective use of interviewing and
interrogation is one of the most productive
components of the investigative process. Carefully
conducted interviews form the backbone of many
investigations. Interviews may have a variety of
purposes, but each is designed to obtain or confirm
information relating to the investigation. However,
the dynamics of a successful interview require
specific training and skill development. Most retailers
require specialized training in interview and
interrogation techniques before permitting their loss
prevention team members to conduct interviews.
Safety & Risk Management
Many companies consider safety management a
key component of their loss prevention programs.
Safety is a very broad topic that covers a wide range
of issues, each vital to the overall protection of
customers and associates, and each important to the
successful operation of the business. Typically, this
responsibility is shared with other corporate
departments, including but not limited to Risk
Management or Human Resources. Many companies
have dedicated safety officers responsible for
developing programs and strategies at the corporate
level.
In the retail setting there are many factors that
require our focused consideration. Diverse
environments and competitional modifications keep
our stores and our entire organization in a state of
constant transition. We must consider all of the
different scenarios that can possibly come into play,
and then we must add a key variable that sets the
retail environment apart from many other workplace
settings the retail customer. We then must assume
the responsibility to promote a safe shopping
environment as well as a safe working environment,
eliminating hazards and minimizing risks proactively
while providing a quality shopping experience.
Loss prevention professionals can become
involved in many different aspects of safety and risk
management; and are often the first to respond to an
accident scene or emergency situation. Other
responsibilities may include completing
investigations related to employees workers
compensation claims, general liability claims
(customer accidents & claims), and damage claims
involving emergencies, natural disasters (fires,
weather, etc.), or other crisis situations. All related
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workplace safety programs are monitored by the
Occupational Safety & Health Administration
(OSHA), a division of the U.S. Department of Labor.
OSHA is responsible for overseeing compliance and
conducting investigations related to unsafe working
conditions. Many states also have their own safety
administrations as well.
The National Institute for Occupational Safety
and Health (NIOSH), which is a division of The
Centers for Disease Control and Prevention, provides
extensive research and training materials designed to
prevent workplace illnesses and injuries. Where
OSHA focuses more extensively on compliance,
program management and the legal aspects of a safe
work environment, NIOSH focuses its efforts on
providing informational and educational resources
that can help businesses make better and more
informed decisions regarding health and safety
practices.
Based on statistics compiled by NIOSH, the
Wholesale & Retail Trade sector had a combined
workforce of just over 21 million employees in 2008,
with 751,300 reported employee injuries while
performing their job responsibilities. Of those
reported injuries, approximately 55% required time
off work or injury-related restrictions to their
assigned duties.
For loss prevention professionals, the driving
force behind any safety management program is to
provide a safe and healthy working and shopping
environment. While no setting is ever truly 100% free
from risk, programs are designed to mitigate risk,
prevent incidents and ensure that responsible parties
respond appropriately to any accidents or related
emergencies that may occur.
Awareness and training programs are vital to the
success of any safety management program. Most
retail facilities have safety committees comprised of a
diverse selection of associates. The safety committee
(or safety team) is often tasked with driving the
safety culture within their local environment.
Additionally, auditing programs may be conducted
by members of loss prevention, store operations,
store management, and/or the safety team to regularly
check for unsafe conditions and compliance with
company standards as well as state and federal
regulations.
Business Continuity Planning
and Disaster Response
Business continuity planning and disaster
response protocols are designed to provide a step-by-
step response to imminent dangers or situations that
may affect a stores ability to conduct business. The
most common involve power outages, severe
weather, or natural disasters; but can involve a wide
spectrum of potential issues. Typically, these
programs are corporate-based, providing the
framework for crisis response as well as how the
organization will resume normal business activities
post-disaster.
Store personnel are trained how to respond to
various situations based upon the severity of the
incident. First, store management, often in
conjunction with loss prevention personnel, will take
actions designed to protect both employees and
customers in an emergency. Second, measures would
be taken to secure and protect the property,
merchandise, and any other physical assets from
damage. Lastly, if business is interrupted, the plan
would focus on getting the business back up and
running, even if alternative methods of operation are
utilized on a short-term basis.
For more information on how businesses can
prepare for disasters and recovery, visit the Federal
Emergency Management Agencys website
(www.ready.gov) or the NIOSH website on
Emergency Preparedness & Response
(www.cdc.gov/niosh/topics/emergency.html).
Loss Prevention as a Career
Todays loss prevention professional is expected
to be multi-dimensional, open-minded, global
thinking, enterprising and intelligent. The face of
retail has changed, and all of the different aspects of
the business including loss prevention, have had to
change with it.
Todays opportunities in loss prevention can
build the foundation for a great career. Offering many
exciting career options, loss prevention is emerging
as an industry stocked with quality professionals and
diverse opportunities. There are many paths to
becoming a loss prevention professional, and within
the loss prevention profession itself, there are many
different career avenues available to choose from.
Todays loss prevention professionals come from a
wide array of backgrounds with diverse skill sets.
There is no single career or educational path
necessary for joining the ranks of the loss prevention
community. There is much to offer for those with
ambition, energy and intelligence.
The Loss Prevention Foundation
The Loss Prevention Foundation is a
professional 501 c(6) not-for-profit organization
founded by industry leading professionals to serve
the retail loss prevention and asset protection
industries. As the preeminent authority on the
development of loss prevention talent for the
industry, the mission of The Loss Prevention
Foundation is to advance the loss prevention
profession by providing relevant, convenient and
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challenging educational resources. This mission is
supported through two certification programs,
LPQualified and LPCertified; online educational
resources; and a professional membership program.
The Loss Prevention Foundation is governed by
a Board of Directors primarily composed of senior
level leaders from throughout the retail loss
prevention industry. The board is responsible for
reviewing all strategic initiatives, budgets, and
business plans. In addition to assisting current loss
prevention professionals grow and develop in their
careers, there is also significant focus on driving
more talent to the industry from colleges and
universities, law enforcement and the military.
Through the support of industry leadership and
the Loss Prevention Foundation, many are finding
entry easier than in years past. Participation and
completion of the industry certification programs (see
below) has assisted many retail loss prevention
professionals by engaging in personal and career
development programs that seek to develop and
retain talent for the industry.
Assisting our Veterans
In support of our veterans, the Loss Prevention
Foundation in conjunction with the Military Officers
Association of America has developed the Hire a
Vet program. The Hire a Vet Program assists
honorably discharged veterans, military personnel
soon to be separated from active duty, members of
the National Guard, and members of the Reserve in
gaining employment in the loss prevention/asset
protection field. Military candidates make ideal
applicants for the thousands of supervision/
management positions found in the retail loss
prevention industry.
Industry Certifications
The Loss Prevention Foundation has created two
unique and independently accredited certification
programs: LPQualified (LPQ) and LPCertified
(LPC). Specifically designed and recognized as
college level courseware, the LPQ and LPC
certification programs provide an educational
benchmark for those who wish to advance their
opportunities in retail loss prevention.
Over 300 loss prevention leaders and subject
matter experts representing more than 130 retailers
and business solution providers worked in
partnership with the Loss Prevention Foundation to
develop, challenge, and review the educational
material and exam questions for the certification
programs. Professors and other academic leaders
from several prominent colleges and universities
were also involved in the review and development
process.
 The certification exams were developed in
association with and under the guidance and direction
of Knapp & Associates as well as Wonderlic, Inc.;
both of which are widely recognized authorities on
professional certification standards. While the LPQ
and LPC programs were designed based upon the
best practice, strategies, and philosophies of leading
organizations within the United States, the Loss
Prevention Foundation has also announced its
partnership with the Retail Council of Canada (RCC)
and now offers certification throughout Canada as
well as the United States.
Additionally, the Loss Prevention Foundation
has partnered with various colleges and universities
across the United States in order to offer
academically accepted credits that apply towards
graduation for successful completion of the LPQ(3
credits) and LPC (6 credits) certification programs.
LPQ. Loss Prevention Qualified
The LPQ certification program is designed to
provide a benchmark education for entry-level loss
prevention professionals such as loss prevention
supervisors & managers, retail store managers,
college students, military personnel, law enforcement
officers, and select non-exempt professionals who
desire a career in retail loss prevention.
The LPQ coursework consists of twenty-five
subject areas based upon three core modules: The
Retail Environment, Becoming a Successful Business
Person, and Loss Prevention Basics & Tools.
LPC. Loss Prevention Certified
The LPC certification program is designed for
veteran loss prevention professionals who are
interested in furthering their loss prevention career in
a senior management or executive capacity. This
program is designed for aspiring or current district-
or regional-level loss prevention managers, directors
of loss prevention, or anyone who aspires to attain
such a position and has 3+ years of loss prevention
experience or a degree from an institution exam
coupled with the LPQ certification.
The LPC coursework consists of thirty-one
subject areas based upon six core modules:
Leadership Principles, Business Principles, Loss
Prevention Operations, Safety & Risk Management,
Crisis Management, and Supply Chain Security.
Other Certifications
CFI. The Certified Forensic Interviewer
The CFI certification is available through the
Center for Interviewer Standards & Assessment, Ltd.
(CISA).
The Certified Forensic Interviewer is a
professional with the expertise to conduct a
9 | L o s s P r e v e n t i o n S p e c i a l R e p o r t
variety of investigative interviews, witnesses,
suspects or other sources to determine the facts
regarding suspicions, allegations or specific
incidents in either public or private sector
settings. The objective of this certification
program is to create comprehensive, universally
accepted professional standards combined with
an objective measure of an interviewer's
knowledge of those standards. The ultimate goal
is that every person and every organization with
a stake in interviewing will benefit from the
program, as will the reputation and effectiveness
of the entire profession.
www.certifiedinterviewer.com
CPP. Certified Protection Professional
PCI. Professional Certified Investigator
PSP Physical Security Professional
ASIS International offers three certifications for
the security professional.
ASIS International has set the standards for
certification in security for more than 25 years.
Certification plays an important role in the security
industry by identifying high professional standards.
As an indicator of qualifications, certification is
documented evidence of expertise and experience. It
is an objective means of distinguishing highly
competent security practitioners from their less
experienced peers. Events of the past decade have
lead to a fundamental shift in the security landscape,
resulting in an ever-increasing demand for
heightened security to protect people, facilities,
assets and data on a global scale. Today, more than
ever before, organizations place a high degree of
importance on hiring, contracting with, and
promoting credentialed security practitioners. The
independent Professional Certification Board (PCB)
oversees ASIS certifications.
www.asisonline.org
The Certified Protection Professional (CPP)
certification designates individuals who have
demonstrated competency in all areas constituting
security management.
The Professional Certified Investigator (PCI)
certification designates those who have demonstrated
education and/or experience in the fields of case
management, evidence collection, and case
presentation.
The Physical Security Professional (PSP) is the
certification for those whose primary responsibility is
to conduct threat surveys, design integrated security
systems that include equipment, procedures and
people, or install, operate and maintain those
systems.
 CFE. Certified Fraud Examiner
The Certified Fraud Examiner is available
through the Association of Certified Fraud Examiners
(ACFE).
Taking the steps to become a Certified Fraud
Examiner (CFE) will position you as a leader in the
anti-fraud community and a specialist in the
prevention and detection of fraud. Becoming a CFE
requires specific qualifications and is achieved by
passing the CFE Exam.
www.acfe.com
Possible Career Paths
There are many paths available within the loss
prevention profession. Below is a listing of some of
those career paths:
Retail Loss Prevention
Supply Chain Loss Prevention
Organized Retail Crime Investigations
Corporate Loss Prevention
E-commerce & Financial Frauds
Brand Protection
Risk Management
Safety
Ethics & Compliance
Internal Audit
Corporate Investigations
Despite the challenges of the economy, the
pressures of the business and the fierce competition
within the retail climate, this multi-trillion dollar
industry continues to evolve, innovate, and grow. As
a result, the loss prevention industry must keep pace
with creative minds and innovative solutions in order
to keep businesses profitable and successful. This
will only continue to create career opportunities in
the loss prevention industry for years to come.
The Evolution of the LP Professional
The recent past has seen a massive wave of
growth, changes, and challenges in the retail industry.
Yet the common assessment is that this is merely a
glimpse of what lies ahead. Retail is rapidly evolving.
The way that we shop, the products we buy, and even
the way that we pay for goods and services is
changing in ways that we never would have expected
just a few short years ago.
As the gap broadens between where we were and
where were headed, our role will definitely continue
to evolve as well. But how will it change, and to what
extent? What, if anything, will be different? What
steps can we take to lead the parade, rather than
watching it pass us by?
To help us find the answers, LP Magazine
canvassed a large number of loss prevention
executives, solution providers, and other thought
leaders to garner their insights and opinions on the
10 | L o s s P r e v e n t i o n S p e c i a l R e p o r t
subject. We compiled those responses to provide both
general consensus and specific views on the ways
that they see the role of loss prevention evolving,
some of the hurdles that we will face in the process,
the skills and resources necessary to power the
transference, and how that will drive the future of the
industry.
The Impact of Technology
Technology is changing society, and society is
changing retail. While there were many significant
examples identified, in general the rapid changes in
technology were seen as the primary driver impacting
the role of the loss prevention in the years to come.
This includes both preventing the exposures that new
technology may afford as well as how to best
leverage technology to combat shrink and loss from
all sources.
But the tools alone werent at the pinnacle in the
minds of most respondents. Rather, it was our ability
to adapt to technology that will have the greatest
influence on our role. According to one retail leader,
The most significant changes will center on business
intelligent tools and, more importantly, how loss
prevention executives embrace and utilize them to
impact additional parts of the business.
As these complex tools become more
commonplace, LP practitioners must adjust, adapt,
and develop to understand the utilization of these
tools and the overall impact on the enterprise.
Awareness isnt enough, and legitimate efforts must
be supported by training and education. This will
allow LP executives to become even more actively
engaged in impacting the profitability of their
organizations. The capacity for an LP professional
to adapt to technology trends will define their career.
Early adaptors will increase their value while
laggards will struggle, says another retail executive.
The impact of technology will lead to
reassessments of a variety of business functions.
Technology will drive trends in areas such as mobile
POS, emerging selling concepts, and business
analytics. Intelligent CCTV systems with analytics
technology will continue to have a bearing on how
LP performs in the stores, but will take on additional
value as part of other retail applications. Use of data
and predictive indicators, cloud computing, and
business intelligence will enhance processes as well
as investigations.
Many also believe that RFID will finally take on
a bigger role in effectively managing inventories,
from original purchase or manufacture until it ends
up in a customers hands. This may also expand the
role of LP into areas that until now were considered
non-traditional, such as energy savings, SKU
rationalization, accident reduction, and business
continuity.
Omni-Channel Retailing
The emergence of Omni-channel retailing as a
growth-driver will have a substantial impact on the
role of loss prevention. As described by one industry
leader, As the retail industry continues to
consolidate, increase in complexity, and expand
Omni-channel solutions, the role of LP will change
significantly. Omni-channel retailing will enable
customers to purchase what they want, when they
want it, how they want to pay for it, and how they
want it delivered.
There are some retailers who are thriving
because they have been able to seamlessly offer an
Omni-channel shopping experience. However, the
move toward the infinite store is also creating new
areas that need to be secured, such as networks and
customer data. LP professionals are increasingly
being asked to bring their specific skills into areas
where they never participated before, causing a shift
in responsibilities.
As an industry, it is critical that we understand
how these strategies are being developed. Many new
supportive processes lack the backend systemic
controls that prevent fraud. And the evolution of new
applications and equipment can have a significant
impact if not properly managed. Retailers are going
to continue to find creative ways to conduct business
and sell to customers. Loss prevention will need to
stay very close to these creative methods and
retailing channels to ensure LP practices are
appropriately woven into the strategies that our
merchants and operators develop, claims one retail
leader.
A Wealth of Information
When it comes to retail, data volume will
become massive, and the speed at which data
becomes available will increase exponentially and be
instantaneous, suggests a solution provider.
Success will be measured by how it is used by
retailers for competitive advantage and higher store
performance metrics of all kinds.
The dual role of increased data and analytics will
create a shift in thinking that will change many roles
in retail, including LP. The capability to access data
and use it to build analytical solutions will drive
higher performance for those retailers who manage it
with the greatest skill.
We are becoming a real-time world with less and
less privacy. Everything we do in publicand even
many of the things that we believe may be outside the
reach of the public eye has the potential of going
viral and putting companies in the spotlight. This
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impacts policies and procedures related to customer
service, store design, training initiatives, product
protection, and other critical business functions. Any
and all of these factors can directly impact the brand
and influence the business.
While IT has been the primary business owner in
most retail companies, participants strongly believe
that loss prevention must take on an expanded, more
proactive leadership role to ensure data is secured
and properly managed.
Breach avoidance and protection of consumer
and company proprietary information will continue to
be a focal point for retailers for many years to come,
says one retailer. Data breaches are costing
companies in many ways beyond the immediate
financial losses, to include litigation, brand protection
issues, and additional sales impact.
According to another industry leader, Having
the LP organization partnered with the IT security
organization will be the most effective way to
improve security of both the actual data and the
physical devices that collect and manage the data.
This includes coordinating investigative approaches
and law enforcement relationships in the event of a
breach.
Store Controls and Product Management
I believe that there will be a significant
evolution of the bricks-and-mortar stores that will
lead to redesign of every aspect of a physical store. It
is already happening in many places, projects one
retail executive. With product moving through
different channels, the protection approach,
resources, and technology will need to adapt quickly.
This will cause a migration of the LP program to one
that is more holistic in its general approach.
Mobile POS can change shopping patterns,
impact sales management, alter register areas, and
cause a number of LP concerns. The ability to order
product in the store may alter stock levels and
physical product carried in the building. All of these
developments will require a more versatile and
strategic approach in managing risk and loss.
Also, the continued migration of shopping from
brick-and-mortar stores to virtual shopping channels
will continue to have an impact on traditional retail
LP roles, requiring us to broaden our view to include
more non-traditional or non-retail environments. As
companies design the store of the future, LP
protection strategies will need to evolve with it.
New and Expanded Responsibilities
As the retail landscape continues to change, LP
roles will likely evolve in other ways to meet the
needs of the business. With Omni-channel retailing
continuing to expand the types of fraud will continue
to widen; and LP will need to adapt to better
understand the entire supply chain operation, from
systems to processes.
Prevention and response to violent acts in retail
unfortunately continues to be a growing issue.
Whether it is workplace violence or concerns with
potential domestic or international terrorist acts, these
issues continue to be at the forefront.
I see the profession changing into a risk
management role; not in the way risk management is
thought of today [managing insurance claims], but
identifying potential risks to the business, then
deploying countermeasures to minimize those same
risks, suggest another retailer.
One solution provider agreed, stating, Our
research findings continue to indicate that there is
significant traction available for all-hazards risk
management in the leadership space. Many corporate
risk mitigation elements, including asset protection,
business continuity, compliance, crisis, critical
incident, LP, risk, and security have grown
organically. We are now witnessing a trend to align
strategic initiatives.
Skills Needed to Meet these Changes
The training and education curriculum of the
future LP professional is going to be broader
business-based. LP leaders will need to be strategic
thinkers as opposed to tactical thinkers. There is a
greater need to understand the broader context of the
overall organization to identify the risks that affect
the company. This includes the ability to hold a
conversation with anyone in the organization about
basic business principles, including sales, finance,
inventory management, and technology. As one LP
leader suggests, Education will be key, whether
through industry-based educational materials or
through formal education and advanced learning
programs.
Greater competition in the job market from more
streamlined departments could also lead to
increasingly visible skill gaps, suggesting that LP
professionals must become more well-rounded
business leaders. LP practitioners must get ahead of
this change through increased education and skill
sets. Overall business acumen is a talent set that the
LP community needs to increasingly emphasize. We
have seen a significant shift in the business acumen
of LP leadership over recent years, but this will be far
more critical as the pace of change in the business
increases.
By the same respect, with technology developing
at such a rapid pace, strong and effective training
programs are just as critical as formal education
programs. This would include sensitivity training,
negotiation and communication skills, social media
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skills, and may include other skill sets that we have
largely downplayed in the past, such as active shooter
programs and other initiatives. Businesses are
increasingly looking for more value from their
people. Knowledge is at a premium, and now more
than ever before we need to learn as it happens.
This also requires a diverse team throughout the
LP organization that can infuse different ideas and
different solutions will make any team stronger and
more productive. Traditional LP talent will become
less marketable and in demand, while analytical
capabilities, business acumen, technical skills, and
problem-solving at a strategic level will be highly
sought after capabilities and backgrounds. A very
selective process with regard to the personality and
talent make-up of the LP team along with a diverse
group of LP personnel that can bridge the digital and
physical linkage will be essential.
New Positions that Support Change
Technologically savvy team members have
become vital to successful LP programs for many
years, primarily with respect to exception-reporting,
case management, CCTV, alarm, EAS, and the
variety of other resources and systems that we use.
But as the retail landscape evolves, the LP
practitioner must further leverage technology in order
to adapt. Industry leaders anticipate that IT liaisons,
cyber-security resources, IT experts, data analysis
experts, video analytics, data security, and other
technical support positions are likely to be a growing
part of LP departments moving forward. States one
practitioner, The future of LP is heavily immersed in
technology on multiple levels. Tomorrows, and quite
frankly todays, LP organization should have those
on the team who fully understand and have a working
knowledge of that technology.
By the same respect, hiring specialized subject-
matter experts is not enough. There will be a growing
expectation that all LP team members embrace
technology and quickly adapt to the needs of the
business. We need to have people who understand e-
commerce and todays technology from a cultural
standpoint. Our teams must embrace and exploit the
latest tools, such as smartphones, apps, tablets, and
similar resources.
Centralization of Responsibilities
Some predict that we will move closer to
centralization of responsibilities. For example, the
creation of corporate command centers that enable
content experts, such as loss prevention, business
continuity, information technology, corporate safety,
and field operations, centrally designed to monitor
the company. Nontraditional roles may also be
included, including meteorologists, sensitivity
officers, communications specialists, and social
media experts to name a few.
This command center could combine a multitude
of functions and company resources to increase
efficiencies, improve productivity, and save
expenses. Many also believe that we will see an
increase in the chief security officer (CSO) or
equivalent role in retail, which would fit into this
type of model.
The Leadership Approach
Participants in the survey agreed that a different
leadership approach shouldnt be necessary for one
primary reason. As summarized by one retailer,
Simply said, leaders who arent currently modifying
their approach based on new information and new
technologies arent leading. Great leaders arent
managing change, theyre leading it.
Leaders must possess the ability to work cross-
functionally in harmony with the overall business
plan. LP executives should be constantly looking for
ways to add value. New roles essential to drive
business will set the stage for diverse leadership
approaches. The days of being the expert in
everything will fade along with the legacy silos
that have long been the norm in many companies,
giving way to matrix-style organizations with leaders
who have a broader scope of expertise and
experience.
Everything starts with leadership. We must
always be looking for ways to have a seat at the
table in discussions involving multiple areas of the
business. This same thought process really is
applicable at all levels of LP leadership. LP directors
and vice presidents need to take a strong look at their
current LP team, identifying their next generation of
leaders. As underscored by one LP leader, If were
not interested in learning more about how our team
can help drive the business, how can we expect
others to see us as leaders?
Advances in Tools and Technology
There will be some incredible advances that
will cause us to rethink how we operate in LP. I
believe that fundamentally, technology will be the
foundation of almost everything we face going
forward, reflects a retail leader.
These technological advancements should
support a proactive approach to the industry as a
whole. The volume and accessibility to data is largely
believed to be a factor that will revolutionize the
decision-making processes and strategies of the LP
professional. Data will provide fact-based analysis
needed to impact the business and mitigate business
losses.
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Facial recognition and smart cameras could also
be a game changer. All of these advancements will
allow us to look at the entire process in an integrated
fashion. LP can then lead the transition so we are
ultimately protecting all of the assets of the new
company.
The migration away from brick-and-mortar to
cyber-shopping will dramatically impact traditional
LP roles. Look at the growth of online shopping in
the past ten years, and imagine it 10 years from now.
Will some type of drone delivery be reality and
perhaps criminals intercepting drones be a new mode
for shoplifting and theft? asks one retailer.
Strong Enough to Bend
By the same respect, the rapid pace of these
changes also means that the development-to-
implementation time is getting shorter every day. As
a result, its important that we make decisions that
are fluent and flexible. Our approach should include
living strategies that can be modified as necessary
and do not become obsolete as the evolution
continues. We can no longer rely on the way it has
always been done to successfully achieve our
objectives.
For example, this means that when the company
decides to implement mobile POS, we must work
together to identify how to provide protection from
the vulnerabilities that we face rather than resisting or
opposing the change. We also need to focus on how
to better use our LP technology to make the entire
company more effective and efficient, such as
through the use of our CCTV equipment to enhance
customer analytics. Productivity and efficiency are
critical as resources continue to be challenged, and
we are in a much better place if were leading the
way.
Partnering with Solution Providers
Collaborative thought leadership that helps us to
better understand the tools that are changing retail is
an essential aspect of future development. As stressed
by one LP professional, Solution providers are
critical to assisting practitioners on emerging trends.
Those that proactively adapt to these trends will lead
the industry, drive innovation, and add value. Retail
leaders believe that those providers who see the
landscape and forecast where retail is headed will be
the ones who will have the greatest long-term
success.
With the transition to more involvement in the IT
aspects of the business, all current and emerging LP
products should all be considered part of a technical
suite of solutions. As a result, the ability to have
solution providers who can help the LP practitioner
to best use these resources, educate teams, and
facilitate communicate with IT departments will be at
a premium.
As solution providers, we need to be experts in
next-generation technologies, as well as experts in
next-generation loss prevention. We need to apply
this expertise and continue to meet and anticipate the
needs of our clients by providing them with tools that
are cutting edge, and continually evolving, advises
one vendor executive.
Bridging the Gap
Unfortunately, many industry leaders still
believe that there is a substantial gap between what
retailers need, as opposed to what the solution
providers believe they want. This was a common
theme echoed by the retail practitioners.
I am continuously amazed at how little solution
providers know about our business and the
complexity of what loss prevention professionals deal
with every day, says one.
Solution providers are in general still trying to
sell old technology and not spending enough time on
integrating technologies to impact future trends,
offers another.
We are often presented with solutions that dont
fit the current issues we face, states still another
retailer.
These comments represent a significant area of
opportunity. Regardless of whether a solution
provider believes that these comments are accurate,
these are a common perception that was shared by the
respondents. It suggests that LP leadership is looking
for true partners are good educators and advisors, as
well as students of loss prevention.
As one might expect, there is another side to the
discussion. Many of the solution providers surveyed
feel that there needs to be progress made on both
sides of the table in the development of collaborative
partnerships. Like any relationship, it takes effort by
both parties.
We choose how we approach relationships,
says one solution provider. We should look at
everyone with a sense of value. Treating providers as
partners [versus simply sales people] is the most
important step.
If retail LP teams and technology buyers are
more open, then their problems may get solved faster
and more creatively. Collaboration is a much
healthier approach, suggests another.
Both retail leaders and solution providers must
be willing to take the steps to broaden their
understanding of this tidal shift in retail. But just as
important is the need for everyone to be willing to
reach across the table to work together and take
action.
14 | L o s s P r e v e n t i o n S p e c i a l R e p o r t
Have we truly taken the opportunity to fully
understand and appreciate the other side of our
partnerships? Taking the time to both share and listen
will help complement the technology with effective
protection strategies and better working relationships.
This is critical for retailers in order to get the results
that they are looking for. This is also paramount for
solution providers in order to tailor their products and
service offerings based on whats truly needed to
help take the next steps.
For those already taking the necessary steps to
set themselves apart, this should provide ample
reinforcement that they are on the right track. For
those who are struggling in these relationships, it
should provide a strong suggestion as to why the
difficulty persists.
Our Biggest Hurdle
As we step forward into a new age of loss
prevention, embracing change was easily identified
as the biggest hurdle for industry leaders to
overcome. Our ability to adjust and adapt during this
revolution of retail and determining how loss
prevention best fits into the company strategy will
help us ascertain how we can deliver the most value.
We have to be willing to step out of our comfort
zone, expanding our education, experience, and
leadership roles. We have to be able to stay in front
of the business, driving core processes and
developing new tools while continuing to support the
company strategy.
Being relevant is no longer good enough. The
role of loss prevention is essential to enhancing the
profitability of our companies. Today and heading
into tomorrow, the industry must become much more
ingrained in every aspect of the business. With new
technologies will come new threats. Keeping pace
with change will help make us part of the solutions.
Budgets and limited resources will always be a
challenge, but should not be an excuse. As margins
and competition tightens, our need to show our
versatility, creativity, and value to the organization
must continue to expand. As it holds true in every
area of the business, we must continue to reinvent
ourselves. That is simply the nature of retail. The
difference today and in the near future is how rapidly
that change must occur.