Shrinkage is a stylish word for theft.  In convenience stores, the primary shrinkage is generally attributed to shoplifting and dishonest employees with limited losses by holdups and burglaries.

To reduce exposure from shoplifters, the franchise owners should adopt the goal of preventing or minimizing losses, as opposed to catching thieves.  The owner's objective in business is to earn maximum profits.  It is a more economical and efficient policy to deter a potential shoplifter than to apprehend and prosecute one caught in the act.

A logical physical layout of the store is the first step in deterring.  Stores which place small desirable items of relatively high cost near the entrance normally suffer excessive losses.  Low cost bulk food items such as bread are often seen in reasonably secure areas, while displays of film, sunglasses, lipstick, makeup and other easily concealable items are place in vulnerable areas by the entrance.  Stores such as these can reduce exposure by relocating merchandise by priorities.  Primarily shrinkage items (determined by past inventories) give the owner a guide to designating priorities.

Employee awareness is another deterrent.  Conscientious personnel who keep a close eye on suspicious persons and prohibit loitering in the store tend to encourage the potential thief to seek easier hunting grounds.

Statistically, over 70% of shoplifters apprehended during one recent year were operating between noon and 9:00 P.M.  Thus it would seem warranted to schedule the most conscientious clerks to work during this period.

Again, statistically, shoplifting occurs at approximately the same rate each day of the week and December is the only month where it appears convenience stores suffer appreciably increased losses.  The twelve to seventeen-year-old age group is statistically the most active shoplifting group in relationship to its size, followed by the eighteen to twenty-nine age group.  Persons over fifty years of age are least likely to shoplift.

Security guards at a convenience store are generally cost-prohibitive, but may be necessary in some areas. In some situations armed guards may be warranted to cover parking lots.  However, in no circumstances should an armed guard work inside a convenience store, or for that matter, any retail store.  Armed guards in retail stores are not assets, but are serious liabilities.

If guards are required, the franchise owner should not look for a bargain rate.  The owner should seek a quality service which will pay the guards assigned to the store a reasonable wage.  (Obviously, the rate to the store owner will be higher than from a service providing untrained, minimum wage watchmen.)

Prior to contracting with a guard service, the franchise owner should be provided with a proof of the contract service's liability insurance.  One million dollars liability coverage (with errors and omissions and other applicable riders) and statutory workers compensation coverage should be considered a minimum requirement.

Should shrinkage warrant consideration of physical security controls or systems, the most effective and economical approach appears to be a video system placed where it is obvious to customers and advertised on the entrance other strategic locations.  "Fake" for replica cameras are often quickly exposed as fakes, while a clandestine system provides no deterrent as it's presence is unknown.

A quality CCTV system including a videotape recorder and monitors (at least one of which is visible to the public) is a proven deterrent with related benefits.  When thefts do occur, prosecution is simplified.  Flint franchise holder and president of the Northern Association, George Tanner, recently reported a number of tapes being held by Flint police as evidence in shoplifting cases.

Related benefits of the CCTV system include protection from employee theft.  A well advertised visible system also acts as a holdup deterrent.

Even a decade ago, the National Institute of Justice estimated the U. S. retailer suffered losses in excess of $4 billion annually through employee thefts.