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What is the Connection Between Loss Prevention and Security?

G. Wiesen
G. Wiesen

Loss prevention and security are often closely connected since increased security measures and protocols are frequently used as a form of loss prevention and a way to reduce shrink within a company. There are a number of other factors and measures used to reduce loss of earnings or product losses, including ensuring employee and customer happiness and eliminating opportunities for people to be injured at a workplace. Loss prevention and security often go hand-in-hand, however, as one of the best ways to reduce a loss of profits or earnings is through theft prevention.

The goal of loss prevention and security is typically to ensure that a company does not lose money due to theft, either from employees or outside sources. Theft is one of the major contributors to a loss of profits for a company, especially retail companies that heavily rely on incoming money for the products offered. When these products are stolen, the company loses money due to the actual loss of the product, but there is also a loss of money due to the fact that someone who may otherwise want to buy that product will then not be able to find it in the store. This is why loss prevention and security are often associated and used together in a workplace.

Security includes preventing loss through shoplifting.
Security includes preventing loss through shoplifting.

One of the most common ways in which loss prevention and security can be implemented together is through the use of anti-theft measures. These often involve the placement of cameras in a store or workplace, visual detection and physical deterrence of theft due to employee presence, and the use of physical devices to reduce theft. Such devices often include electronic tags placed on or in products, which must be deactivated before the product leaves a store or else an alarm sounds.

Loss prevention personnel may deal with cases of embezzlement.
Loss prevention personnel may deal with cases of embezzlement.

Loss prevention and security are also typically connected in reducing opportunities and occasions of internal theft from employees at a company. This is a risk in both retail workplaces and non-retail environments such as offices, from which employees can steal supplies, computer hardware, and trade secrets. Increased use of security in these workplaces can include running background checks on employees to prevent theft risks whenever possible and monitoring employees that handle money through video camera surveillance. Loss prevention and security are often both parts of the same department within a company, and funding to loss prevention in general is often used to provide funding for greater security.

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Discussion Comments


Both forms of theft are pretty major concerns for most companies. Employee theft can be quite serious, especially since it can go on for so long without anyone realizing it is happening. Outside theft is still a major problem, however, since alarm tags don't prevent someone from simply walking out with something in his pocket.

Even worse is when both come together, and an employee is helping someone else steal from a company.


Have you guys tried any of these security software packages out there for businesses? I have a business with several store locations and have been losing a lot due to theft and also employee errors. We don't have a very big management and it's not possible for me to track what is going at each store all the time.

I've heard a lot about software that somehow tracks what is going on in the business in regards to sales. I think it overviews how everything is going and informs management when something is out of the ordinary.

We actually haven't experienced much employee theft, but we have issues with employees not having the right amount of training and making errors during sales which cost us money. I want to try a security software to help me identify which stores and which employees need more training or need to be disciplined or let go if necessary.


When I was working for a retail store, one of the biggest issues was credit card processing and credit card fraud. The store had both a physical location and also a website that accepted orders. Online orders often caused problems and we couldn't find a way to prevent fraud.

When someone uses a credit card number fraudulently and buys something online, first the order is approved and the seller receives payment. Later, the real owner of the card disputes it with the bank and is refunded that amount. It has happened to me as well. Some people think that the bank pays that money. But no, the store is required the give back the amount they received for that sale, so the company pays for it. If this happens a lot, you can imagine how much loss the company will have.

My bosses always incurred losses because of this and even thought of shutting down the online store. They didn't though, because that would cut down significantly on their profits. I think this is really an industry wide problem and if it's going to be solved, it has to involve not just the merchants but also IT people and law enforcement.


I think most theft is actually done by employees and not customers. I think customer theft has been reduced to a great degree thanks to alarm tags and camera surveillance but it is harder to oversee employee theft because they have so much more access.

Employees with managerial access to data and products can probably work their way around the system if they want to steal. I think businesses are finding new security measures to take care of that as well though.

I read recently that many large companies can actually follow what is happening to their products at each stage of production and sale. This makes it easier for them to notice when something is going wrong, like if there is a lot of loss at a particular sale center. Then they can look into that center specifically to see what is going on. Hopefully losses will be reduced to a very minimum as new loss prevention systems go into place.

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    • Security includes preventing loss through shoplifting.
      By: Steve Lovegrove
      Security includes preventing loss through shoplifting.
    • Loss prevention personnel may deal with cases of embezzlement.
      By: s_kuzmin
      Loss prevention personnel may deal with cases of embezzlement.