Retailers continue to employ strong governance practices when it comes to theft prevention with most having policies in place that define the consequences of shoplifting, internal theft, vendor or supplier fraud and the pirating of intellectual property. Similar to the findings of the 2007 survey, retailers also indicate a strong tendency towards prosecuting offenders caught in the act of stealing. Sixty per cent of respondents prosecute employees more than half of the time when an employee is caught stealing, while 79% prosecute customers more than half of the time in the same scenario.

"Going forward, retailers may be less apt to pursue costly legal action against employees and customers for theft as a result of budgetary pressures from the economic decline - particularly where they have proven that they can continually prevent or detect it," says Ian Booler, Director, Advisory Services at PwC. "Based on the combination of the responses related to policies and procedures and combined with the shrink levels, we know that when strong governance practices are combined with proven theft prevention methods, Canadian retailers can effectively monitor and control established theft risks. In addition, those retailers who have leveraged a good mix of technology, processes and people, are better positioned to identify and address new theft risks as they come into the Retail market."

Despite the fact that online retail sales account for an estimated 2% of total annual Canadian retail sales (statistic provided by RCC), the theft risks related to this sales avenue has caught the attention of management as a potential source of loss, 55% of respondents indicated that they run an online store and all respondents indicated they routinely monitor online transactions for fraud as part of their loss prevention procedures.

Losses related to fraud from returns, credit cards or gift cards remain areas of high concern and considerable sources of loss. However, the survey shows that alarm systems, closed circuit TV and armoured car pick-up services have become industry standard practice as measures to reduce losses and monitor theft risks. These are proven methods that apply equally to all different types of retail segments in the market.

"While retailers have resources dedicated to preventing losses, they are still heavily reliant on the staff working on the front-lines," says Bill Yetman, Chief Operating Officer for the Retail Council of Canada. "We also see that with tightening economic conditions, pressure is increasing to minimize losses and protect the bottom line. Every retailer is looking to do 'more with less' and staff on the front-line will be increasingly counted on in the coming year."

Survey results confirm that retailers in Canada make significant investments working on the front lines. For instance, store operations staff compensation contains a measure for 'shrink' or loss measure and theft prevention training done in person is by far the most common and indicated as the most effective way used by retailers to train employees on loss prevention. It is also now a common best practice to perform pre-employment screening before hiring new staff. In fact, over 75% of respondents perform pre-employment screening as a routine procedure. Some retailers go even further, just under 50% of retailers request new employees to pass a police background security check as part of the hiring process as a means of ensuring they are protected against internal theft.

"One way to identify areas of improvement within individual retail locations is through comprehensive site reviews and visits," says Yetman. "Ninety per cent of our respondents said they perform periodic security audits of their locations to ensure that all security elements are reviewed as compared to corporate policies and procedures. It is clear that, where possible, establishing security best practises should be a priority for Canadian retailers and the survey results indicate that it is."