5 Security Threats in the Retail Business

When owning and operating a retail business, various risks can be expected and are sometimes inevitable. Some of the risks involved can include theft, digital theft, or an accidental injury of a customer can all negatively impact a retail store’s production, efficiency, and ability to create a viable profit. While no retail business can be completely protected from the risks, there are ways to reduce these threats by initially identifying the risks that could harm a company and what precautions can be taken.

This article includes the five security threats in the retail business and how they can be minimized.

Data breaches

As online shopping becomes increasingly popular, so is data breaching and online thievery. Targeting online retailers can occur in several ways, making these schemes more nefarious and complex than physical theft at a store. Some scammers use a type of convincing to persuade retail employees and customers to give them their credit card information. A distributed denial of service attack can dismantle any retail business’s servers, which can disallow customers from making any purchases. Online thieves can also breach a brick-and-mortar business’s data by utilizing hacking methods on a physical retail point of sale (PoS) system, preventing retail purchases, sales, and profits.

Retail businesses can do the work to avoid these cyberattacks by hiring cybersecurity specialists to audit software and by updating their PoS systems if it is outdated. Owners of retail businesses also can purchase cyber liability insurance that will cover any damages brought on by a data breach.

Theft of inventory

Shoplifting can cause a loss of significant inventory of a store and, as a result, a loss of inventory and profit and revenue. Shoplifting can cause particular problems for small retail stores and businesses owned by small-town locals. Shoplifting often occurs without anyone’s knowledge and will often reoccur by the same offenders subtly and quickly. Shoplifting can be a problem easily handled through preemptive measures by employees and security methods that business owners can purchase. Business owners can invest in hiring security guard services to protect their stores. They can also take action by installing security cameras around certain areas within the business, placing items that are valuable or most likely to be stolen in locked display cases, and installing an alert sound to go off when a customer leaves or enters the store.

Retail management should train new employees on how to reduce shoppers’ abilities to steal inventory through personal approaches and effective communication between coworkers. To further deter shoplifters from stealing from a retail store, signs stating they will be prosecuted can be placed around the store. Another effective method is to train employees on how to identify common signs of shoplifting, like apparent attempts to distract employees or switched pricetags.

Gift card hacking

Unbeknownst to many, gift card hacking is becoming a trend in retail theft that can significantly impact a business’s gift card system and reduce potential profits. This type of theft happens when a hacker steals unloaded gift cards from any store that carries them. Through these stolen cards, they can eventually identify a pattern within the identification numbers on the cards. The hacker can then use a retailer balance-checking website and will use forceful number combinations until a card with significant value shows up. With this information, online purchases of varying expenses can be made.

This type of theft can be avoided by using better online security and hiring or installing store security.

Refund fraud

Refund fraud happens when someone curates a fake receipt and persuades a retail employee to provide a refund for an item that was never bought in the first place. With online shopping now on the ever-climbing rise, some may make the false claim that they made an online order that never arrived and will receive a refund for an item that was never ordered. Theft by refund fraud can also happen when someone purchases an item using a stolen credit card and requests the refund be processed on their own credit card.

Refund fraud can be reduced by training retail and call centre employees to become more acclimated to these overt schemes. Properly training employees to identify refund fraud can minimize this type of profit loss.

Attack on supply chains

Technological advancements in shipping have done wonders for both retail suppliers and consumers, but it has also increased the risk of data breaches, particularly in the areas of supply chains. Hackers can now break into third-party companies to access valuable data. These types of data breaches can cause outages for suppliers of retail stores, causing logistics interruptions at transport companies that can impact the shipping and receiving of necessary store inventory.

Luckily, there are various ways for business owners to assess and manage these risks using various online tools that can easily be purchased.