Unfortunately, even the most carefully monitored businesses can experience incidents of shoplifting or shrinkage. And in the retail and restaurant industries, even minor losses can significantly impact your bottom line. Fortunately, retail loss prevention software can protect your business. Learn more about loss prevention strategies and the benefits of investing in video software.

What Is Loss Prevention?

Most stores and restaurants have practices in place to prevent theft, whether it’s a set of security cameras or rules for cash handling. Loss prevention is simply the complete set of policies and procedures that a business uses to protect and maximize its profits.

A preventable loss is any reduction in profits or inventory caused by an employee, customer, or vendor. Preventable losses include both internal and external theft:

• External theft: This type of theft includes break-ins, robberies, and shoplifting. Individuals can also commit external theft through fraudulent behavior, such as using a stolen credit card number or attempting to exchange stolen merchandise for cash.
• Internal theft: This type of theft, committed by employees, may be intentional or unintentional. Workers may take merchandise without asking, so that missing inventory is unaccounted for, a problem known as shrinkage in the retail industry. Employees may also give unauthorized discounts to family or friends or commit “time theft” by taking extended unapproved breaks.

Implementing a Loss Prevention Strategy

A comprehensive loss prevention strategy should seek to minimize internal and external theft while ensuring a positive experience for customers. Loss prevention tools include:

• Security cameras: Video monitoring discourages crime, but it can also help spot issues with the store layout and catch staff errors before they become bad habits.
• Analytics: Smart camera systems can pair with video software for loss prevention. This software will recognize and send alerts if specific events occur, such as an unsecured cash drawer.
• Staff training: Onsite employees can discourage shoplifting and fraud by greeting customers, actively monitoring the store, and following best practices for cash handling

Benefits of Using Video Software for Loss Prevention

Video software helps a business owner effectively monitor their store or restaurant. With strategically placed security cameras, you can monitor high-traffic areas, cash registers, business entrances, and parking lots. If a theft does occur, recordings can provide a physical description of the offender or capture their license plate number.

However, surveillance software can also be a tool for taking proactive measures to prevent theft. With video loss prevention software, you can monitor staff and customer behavior.

Monitor Unstaffed Areas

Self-checkout terminals are becoming increasingly popular at retail stores and fast-casual restaurants. Retail Dive reports that the number of stores offering self-checkout is expected to triple in the next five years.

While this innovation can reduce labor costs, it also allows bad actors to shoplift products or commit fraud. Smart camera systems can identify and reduce theft in unstaffed areas like self-checkout kiosks. They can also monitor employees who might be working on their own in a back room or storage area.

Identify Irregular Transactions

Loss prevention software can also help reduce internal theft through a process known as exception-based reporting. Most restaurants and stores use a point-of-sale (POS) platform to process customer transactions. Exception-based reporting is a type of analysis that reviews a string of transactions and flags outliers.

With exception-based reporting loss prevention software, managers and owners can catch employee errors: they may be inputting orders incorrectly or giving unapproved discounts. Conversely, a worker may be intentionally committing theft, such as voiding a transaction and pocketing the money. This reporting tool can flag unusual activity, so managers don’t need to waste time manually reviewing transactions.

Partner with DTiQ Today

If your company is looking for retail or restaurant loss prevention software, DTiQ is here to help. We’ve implemented custom solutions for more than 45,000 major corporations and franchisees.

DTiQ’s business intelligence platform integrates intelligent video systems with powerful analytics to detect suspicious activity, prevent theft, and identify staff training needs. We provide 24/7 customer support and offer an integrated mobile app, so you can monitor your business from anywhere.

Our pricing is based on a subscription model so you always have the most up-to-date tools to protect your business – without major capital expenditures. DTiQ integrates with a wide range of leading POS platforms, like Square, Toast, and Revel. To get started, book a demo today.

Loss prevention is the set of strategies a business uses to reduce and prevent waste, fraud, and abuse. A good loss prevention policy is helpful in any type of business, but it’s especially important in the fast food industry. As a franchisee owner, having cameras in your restaurant can help with customer experience, speed of service, and inventory management, including food waste and fraud

According to a report from Indeed, the average quick-service restaurant has a profit margin between 6% and 9%. That means that internal or external theft can significantly impact your financial position.

A Real Example of Restaurant Theft

A manager from Dunkin Donuts in Cambria County, PA was suspected of stealing from the company. The regional manager was unable to locate missing bank deposits, which led to further suspicion.

By using DTiQ’s 360iQ, a remote management tool and intelligent surveillance system which provides owners and managers with complete visibility into their businesses, the regional manager was able to compile videos that proved the manager was stealing from the store.

That manager is now facing more than 12 charges after stealing from the business and being made to pay back the stolen money. That’s just one example. There are plenty of other types of theft to be aware of for restaurant loss prevention.

Types of Restaurant Theft

Unfortunately, both patrons and employees can commit theft at restaurants. External theft is committed by customers, while internal theft on the staff side.

Internal Theft

Also known as employee theft. Sometimes servers and cashiers make honest mistakes that can lead to accounting discrepancies. But other times, employees intentionally “skim off the top.” This is internal theft and can include practices like:

• Giving customers extra discounts or complimentary items to get a bigger tip
• Giving free food or drinks to friends or family without supervisor authorization
• Stealing tips from a tip jar or another server
• Undercharging a customer and stealing the difference – a practice that is known as “short ringing”

External Theft

If you own or manage a restaurant, you’ve probably had a customer or two dine and dash. But patrons can commit external theft in other ways, such as lying to get items comped, or a customer may claim they never received a delivery order to get a refund.

External theft can also be committed by other parties – for example. Upon the initial review of the video, the attorney saw a wet floor sign in the area and used that as evidence to support the claim that the floor was wet and not properly dried and filed for $300,000 dollars in damages. Using DTiQ’s 360iQ system, the McDonald’s legal team was able to do a deep dive and found the video from a different camera angle which showed the napkin falling off the tray, and her fall was caused by her slipping on that napkin. The McDonald’s team won, and the claim was thrown out, covering their own attorney costs.

Loss Prevention Techniques

With restaurant industry sales down significantly from pre-pandemic levels, loss prevention is more important than ever. Simple steps can make a big difference in loss prevention at restaurants:

• Utilize restaurant security cameras: Video monitoring can record videos and help managers improve site security and identify suspicious staff behavior like improper cash handling. You can utilize surveillance cameras both in the dining area and parking lot for video footage.
• Invest in analytics: A restaurant camera system is even more helpful when you have accompanying analytics for your security and POS system. For example, intelligent video can send a real-time alert for a specified event, such as an employee coming onsite after hours or a worker performing inventory.
• Conduct thorough staff training: Some losses, such as undercharging customers or incorrectly applying discounts, are simply unintentional errors. Make sure everyone on your team is properly trained on how to use your point of sale system.

Improve Restaurant Loss Prevention with DTiQ

Learn more about how DTiQ helped has helped quick service restaurants like Dunkin Donuts, Subway, Domino’s Pizza, Wendy’s, and more with our loss prevention case studies.

If you need help to make sure your restaurant loss prevention program is protecting your assets, DTiQ is the answer. We offer an unparalleled combination of intelligent video systems, integrated analytics, and customer support for loss prevention programs.

To learn more about our protecting your assets for the restaurant industry, view our loss prevention solutions and book a demo today.

You may think of a fraudulent delivery chargeback here, and there is no cause for concern. But over time, chargeback fraud can hurt your profits and potentially affect your restaurant’s reputation. Some chargebacks are simply misunderstandings, but others are a form of intentional theft. Learn more about the various types of delivery chargeback fraud and how to prevent and address delivery chargeback fraud in this guide from DTiQ.

What is chargeback fraud?

When a customer makes an online purchase, they typically use a credit card, and the payment is routed to a merchant through the customer’s bank. A chargeback occurs when a payment is reversed by the customer’s bank, meaning the merchant loses the money.

Chargebacks are legitimate if a customer never received the product they purchased. However, some bad actors commit chargeback fraud by requesting a refund even though they received their items. There are three types of false chargebacks:

• Friendly fraud is when a customer files for a chargeback from their bank on a legitimate transaction instead of trying to obtain a refund from the merchant. A friendly fraud chargeback may be deliberate or unintentional, as a customer may receive a credit card statement and genuinely believe a fraudulent transaction took place.
• Criminal fraud occurs when an individual steals credit card information to purchase goods and services fraudulently.
• Merchant errors are types of errors that can occur because of operational mistakes. For example, a customer might be charged for a subscription that has already been canceled, or the merchant may accidentally issue a duplicate charge.

When a customer disputes a charge that appears on their credit card account, the bank can reverse the charge, meaning the merchant loses the money – even if they’ve already issued goods or services to the purchaser.

Delivery Chargeback Fraud in the Restaurant Industry

Food delivery services have grown exponentially in recent years. While restaurants used to handle food delivery directly, there are now several major third-party applications for online ordering, such as DoorDash, Grubhub, and Uber Eats. McKinsey & Company estimates that the food delivery sector is worth over $150 billion worldwide.

Unfortunately, the proliferation of online ordering has also led to an increase in chargebacks in the restaurant industry. An individual might order a meal online, claim it was never delivered – even if it was – and request a false chargeback. With limited staff and resources, it’s difficult for restaurant owners to dispute chargebacks.

How to Prevent Delivery Chargeback Fraud

Every restaurant deals with disgruntled customers from time to time, so it may not be possible to eliminate chargebacks completely. Taking steps to prevent fraudulent chargebacks is an important part of a comprehensive loss prevention solution. Restaurant owners should implement these strategies to avoid chargeback scams:

Make it easy for customers to contact you

Your restaurant’s contact information should be prominently displayed on your website, customer receipts, and email messages. You want to encourage patrons to contact you directly if they have an issue rather than resorting to their bank. This can help reduce accidental and friendly fraud incidences and provide an opportunity to build customer loyalty.

Concentrate on staff training

Merchant error can result in lost revenue and frustrate your customers. Make sure you’ve provided your staff with thorough training on your point-of-sale (POS) software so they know how to process delivery orders correctly. Always confirm with delivery drivers that the customer received orders. Some delivery services will even take a photo of a curbside drop-off to serve as proof in case of disputes.

Invest in fraud prevention technology

It’s estimated that up to 30% of chargebacks are the result of fraudulent credit card use. Partner with reputable delivery services and use a smart surveillance system that integrates with your POS system and can alert you to suspicious activity.

Implement Loss Prevention Solutions with DTiQ

Because restaurants run on narrow margins, a pattern of delivery chargeback fraud can have a real impact on your bottom line. To protect your business, DTiQ offers sophisticated solutions for restaurants and retail, drawing on intelligent video and advanced analytics.

With mystery shopping and audits, you can improve customer satisfaction and identify areas for employee training and support. To get started with DTiQ, book a demo today.