When is the juice worth the squeeze? In simple terms, that’s the dilemma facing operators. What is the right amount of investment that reduces shrink, fraud and overall loss without creating cumbersome overhead? 

More investment makes good business sense. That was a refrain at the NACS Loss Prevention and Safety Symposium that took place in December, with speakers highlighting how enhanced loss prevention is a net positive to organizations. 

A few key reasons shared from the stage: 

• Retailers often don’t realize the scope of their loss. Step one is to wrap your arms around the problem. “What’s the size of the prize?” asked Mark Stinde, vice president of asset protection, Casey’s General Stores.
• Controlling shrink can extend beyond employee theft. Stinde and Mike Suppe, director of asset protection, Casey’s, shared how the retailer has adopted a total loss framework that looks at all sources of loss, including foodservice waste and expired product, as well as losses within the supply chain.
• A well-oiled loss prevention team, far from being a silo, works collaboratively across the entire organization, unearthing unexpected opportunities. A simple example: A computer vision system that’s installed primarily for loss prevention can flag when an employee isn’t in uniform or is missing a name tag. “What I’ll say to the loss prevention professionals in the room is we hold the key to the future of AI in our organizations,” said Wes Pate, vice president, loss prevention and risk management, Refuel Operating Company. “We have our camera systems in our stores, we use a lot of other technology. If you’re not partnering with your IT folks, with your merchants, your operators, you’re probably behind.”
• Costs for technology innovations like AI-powered computer vision that may have been prohibitive in the past are dropping. Operators of all sizes can relook at their loss prevention toolkit and what investments make sense.

Think Big: Total Loss

Adrian Beck, a professor at the University of Leicester, is credited with creating the concept of Total Retail Loss. As Beck explained it, the concept was a response to “the growing breadth and complexity of the retail landscape … putting stress on the applicability of traditional shrinkage definitions.” 

For a traditional mom-and-pop corner store, total loss and traditional shrink could mean the same thing. But for a modern retailer, in Beck’s view, a different approach is needed—one that goes far beyond seeing loss prevention as catching bad guys. Two simple examples: Total loss could include the loss associated with selling an item at a reduced price because it’s damaged in transit or the loss of a sale when an item is out of stock. 

Casey’s is using the total loss framework with impressive results. The retailer quickly found opportunities to apply a loss prevention mindset to foodservice, particularly spoilage. Overall, Casey’s divides total loss into four buckets: store, e-commerce, corporate and supply chain. Each of these is then broken into malicious and non-malicious categories. For example, in its total loss framework, bad debt isn’t just an accounting function. Instead it lies under the corporate/non-malicious category. 

According to Stinde and Suppe, broadening the scope of loss prevention is a process of earning wins, communicating the wins and gaining trust across the organization. 

AI: The Loss Prevention Game Changer

Brian Gray, managing director, Accenture, listed specific areas where AI is changing loss prevention. Even if they aren’t practical now, they soon might be.

• AI surveillance and computer vision: Using existing cameras, AI can spot everything from safety violations to shoplifting to potential spill-and-slips in real time and send alerts immediately. (In the next section, read how Loop Neighborhood Market is using AI-enabled CCTV.)
• Real-time alerting and predictive analytics: Real-time alerting can be applied to everything from unusual flow rates on the forecourt to fuel-delivery-driver fatigue (i.e., a driver wears a device that identifies when he/she is sleepy). When it comes to predictive analytics, too much data and too few insights is a familiar problem but one that AI promises to ease. This is true in loss prevention and other areas of the operation.
• Biometrics and facial recognition: The technology isn’t perfect in retail applications yet … but check back soon. While privacy concerns are real, “We’re starting to see a little bit of a pendulum swing,” Gray said. “I think a lot of people now are starting to come around to the fact this might make us all safer.”
• Voice analytics: Among the many applications for voice analytics, employee safety is one of them. These tools can identify when conversations turn hostile or aggressive, with remote monitoring automatically turned on.
• Physical AI and security: With agentic AI (“autonomous” AI agents that can accomplish specific goals, like finding and purchasing an airline ticket) already stealing some of generative AI’s thunder, what’s next? Physical AI could eventually mean human-like robots, and autonomous security robots are already in production.  

AI in Action Today

Matthew Makarem, director of loss prevention and employee development, Loop Neighborhood Market, shared how the California-based retailer is already using AI and other technology in a transformative way. 

“AI isn’t in the future. AI is already here. And it’s here to stay,” Makarem said, while acknowledging that AI applications within c-stores are still not perfect. 

Makarem encouraged attendees to investigate whether an AI-enabled CCTV surveillance system would work for their operation. Among the recommendations he had for a system: point-of-sale integration; the ability to capture audio, if permitted by your state; talk up/talk down capability; facial recognition capability; and the ability to store months of data.

He shared some successes Loop has had with its system:

• Credit card fraud detection: AI is fantastic at identifying patterns. “The days of manually scanning through transactions to uncover patterns of misuse are over,” Makarem said. Loop’s system flags suspicious patterns such as voids, refunds or “frequently seen credit cards used for potential employee or even customer fraud,” Makarem said. This allows investigators to quickly zero in on the highest priorities. 
• Flagging transactions with no customer present: According to Makarem, these transactions carry the highest risk of fraud. “This is an amazing tool,” he said. “If a refund is made, for example, without a customer present, the system automatically flags it and generates a report and a clip.” The entire process is speedy and streamlined. 
• People detection: This capability “completely transforms our existing camera into an intelligent intrusion detection system,” Makarem said. The system detects people in the store when no one should be present or can be used to guard certain areas of the store (like a back door). A retailer can customize the details, but the system combines automatic elements—a flashing light, for example—and human elements, with someone at the store operations center or a store manager notified in real time to watch the feed and either escalating the response, including potentially contacting the police, or turning the alarm off. 
• Panic buttons: Loop’s panic buttons, when pressed, instantly map to the nearest camera, giving the monitoring agent a real-time view as they potentially call law enforcement.  
• An incident management system: The system automatically creates incidents when suspicious activity occurs and sends notifications to the proper people in the organization. All communication stays in the system—no emails. Having all the information in one place makes it easier to find patterns and see what problems recur where.

Communicate, Communicate, Communicate

A consistent theme from loss prevention professionals at the event: They are communicators. 

Communication extends from the CEO to the frontline worker. The goal is to be heard but also to be strategic: For loss control to really become part of a company’s culture, it has to be something store teams want to do. Bob Wright, loss control manager, Kwik Trip, shared that he’s proud when people on his team are in the field and store leaders are excited to see them. 

A key part of communication is being a cheerleader for loss prevention. Celebrate wins, celebrate them in a way that others can see, and always be prepared to tell your story—with data.

Wright shared steps for how he built internal alignment around growing and refocusing Kwik Trip’s loss control team:

• Self-scout: Take a 1,000-foot view of your current approach. “We would find external shrink and investigate it. We would find internal shrink and investigate it,” Wright said. The team challenged itself to break out of that pattern and find a new way to help the company. Among the goals was finding ways to take burdens off other departments.
• Create the plan: Wright’s advice: Focus on ROI and understand that it might take several attempts. Incorporate all the feedback that you get. Ultimately, loss prevention is a team project across the entire company.
• Hire the right people and show wins: “You’d better have the right people, otherwise you’re going to sink fast,” Wright said. “We were lucky enough to get a lot of great applicants,” he said. The team started in areas that had higher shrink and new stores, meaning there was low-hanging fruit in terms of immediate successes that boosted the case for further investment.
• Measure: Data-driven results are a critical piece of achieving success and then storytelling around that success. 

At the store level, Casey’s keeps loss prevention top of mind by making it a prominent part of how managers are evaluated. Data is also easily accessible to anyone at HQ through a Power BI dashboard. At the team member level, Casey’s gives challenge coins to frontline workers who have gone above and beyond when it comes to loss prevention. The team members are also recognized on LinkedIn.

Tim Hall, director of asset protection, 7-Eleven Inc., shared that the retailer focuses on short, animated videos for sales associates that are accessed through QR codes on posters at the store. The retailer tracks how many people are accessing the two-to-three-minute videos, and if anything is falling short. 

Wright of Kwik Trip also emphasizes recognition, even if it’s just praising someone at a store meeting or giving them a small swag gift. If a store does particularly well, Wright’s team will roll up their sleeves and work shifts at the store, taking on tasks like cleaning the cooler. It’s all part of spreading a loss prevention mindset throughout the company.