Ultimate guide: five methods of loss prevention in warehousing

At CDX Security Group, we’re experienced in advising our clients on the best security strategy for keeping their staff, their visitors, and their stock safe.

With experience of working across multiple industries including warehousing and logistics, construction, and retail, we draw on our team’s significant experience to develop bespoke security services that will respond to any key challenges and concerns.

One of our key service areas is loss prevention, working with our clients to understand their challenges in this area and developing an integrated service that will support them.

What is loss prevention?

Loss prevention is the term used when helping companies minimise losses to preserve profit by reducing so-called “preventable losses”, a business cost caused by either deliberate or accidental human actions.

Within retail, this could mean external theft through shoplifting or fraudulent returns. But loss prevention goes beyond what we might call the “traditional methods” of theft.

Internal theft is a significant contributor to profit loss across multiple industries, including retail and warehousing and occurs when dishonest employees abuse their position and cause substantial financial losses.

UK businesses lose around £190m every year due to employee theft, which means having a robust and effective security strategy should be a top priority to mitigate this risk and ensure your premises are secure.

Loss prevention is typically associated with retail environments, but it can also be prevalent in other industries, including:

  • Warehousing
  • Transportation
  • Manufacturing

Here, we’ve explored five methods of loss prevention to help keep your staff and your stock safe…

1.     Regular monitoring and CCTV

Having CCTV installed on-site brings with it a host of benefits, including:

  • Deterrent for criminal activity
  • Reduces insurance premiums
  • Provides peace of mind for employees and visitors

CCTV security systems are a cost-effective way of providing round the clock monitoring of your site or business premises. Cameras should be placed at regular intervals throughout the site and “hot spots” around higher value stock as well as in more secluded areas. CCTV will also be invaluable in cases where theft does occur, should you need to submit camera footage to the authorities for evidence.

Security cameras are very much your first line of defence when it comes to security services and their presence will also act as an efficient deterrent for potential thieves. Having security cameras on-site could also result in reductions in your insurance premiums and help you should you need to make a claim.

Monitoring your premises can go beyond installing CCTV. Regular, unscheduled site walks conducted by trained security guards are an effective deterrent and will be effective in loss prevention. Where necessary, in instances of previous theft or fraudulent activity, random searches could also be worth including in your security strategy.

2.     Have clear anti-theft policies

In industries like warehousing and logistics, which have high rates of internal theft, having clear anti-theft policies can be a good way of mitigating the risk of this.

There are some simple ways of laying out clear policies to discourage theft. Written policies can outline procedures for handling cash, stock, inventory, and any business property.

These policies should be clearly explained to employees and be regularly updated. Disciplinary action should cover the full scope of responses, depending on the severity of the infraction ranging from written and final warnings to termination of contract and in some cases, police action.

Screening potential employees will also help you mitigate a potential risk at the first hurdle. Checking out references and conducting background checks will help put your mind at risk.

For companies outsourcing their security services, partnering with a reputable and trusted third party is advisable to ensure their personnel are trustworthy.

3.     Stock control and audits

Regular stock control and audits will help you quickly identify potential red flags and escalate these as soon as possible. Ensuring you have a hierarchy of authorisation for approving stock counts will also help mitigate losses and hold more than one person accountable for potential issues.

Increased security for high-value stock items and assigning access to a limited number of employees should also help avoid theft and subsequent substantial losses.

Other suspicious activity to look out for when reviewing stock includes:

  • Stock is found near exits or loading bays
  • Hearsay that staff theft is going on
  • Stock and sales records don’t match up
  • Important documents, such as invoices, are being copied or going missing

Surprise audits are another way of keeping potentially dishonest employees on their toes and will also break up regular sales cycles, which will be predictable and give perpetrators time to cover their tracks.

4.     Consider your work environment

Creating an honest and open work culture could be the most impactful and inexpensive way of ensuring loss prevention. Making your employees care about where they work and who they work for could be a big step in discouraging thieves.

If you do suspect fraudulent activity and theft, it’s advisable to take precautionary measures with the individual/s in question. Rotating shift patterns to avoid alliances being formed is a good way to do this and will also help you align this with your stock audits.

Regular walkthroughs from the site manager, although a time-consuming task, will also communicate that someone in a position of authority is on-site at all times, monitoring activity, but also available for any questions or concerns.

5.     Partner with a trusted security firm

Working with a dedicated partner to implement a bespoke, integrated security system will pay dividends in the long run, ensuring loss prevention stays at the top of your agenda.

At CDX, we work across a range of industries but have significant experience in supporting our warehousing and logistics clients. Our on-site security officers provide an around the clock physical presence and can conduct regulated bag searches, monitor (and escalate) unusual behaviour and can also operate additional checks such as body scanners to detect hidden packages on entry or exit.

Here’s what one of our clients had to say:

“CDX support us with providing enhanced security at our warehouse. We process a large number of high-value goods on a daily basis, so having their trained officers on-site at all times provides us with the peace of mind that our stock is protected, and our staff feel safe coming to work every day.”

Head of Facilities at leading e-commerce retailer

Loss prevention is an important element of avoiding significant profit loss and can be successfully implemented through a series of simple, but impactful steps. Assessing the level of risk at your business premises will provide a good indication of what security services you should have on-site to protect both your staff and your stock.

Call CDX Security Group today on 0330 333 8080 or email us via support@cdxsec.com for more information.