Issue 10
Most CFOs think “loss prevention” means LP teams walking the floor with walkie-talkies.
They don’t see the organized rings running the same scam across three channels, or that returns, fraud, abuse, and shrink teams have no idea they’re all getting hit by the same people.
One retailer finally asked the obvious question: how many customers are showing up in our returns data, our shrink reports, AND our fraud alerts?
Turns out, quite a few. And those departments had never compared notes.
That’s the kind of intel you find when you stop optimizing departments and start connecting data.
Here’s how retail executives are repositioning loss prevention as margin protection, not security theater.
But first, your industry brain teaser of the week:
What percentage of returned inventory value do retailers lose on average due to restocking and resale markdowns?
Scroll to the bottom for the answer.
What's in stock
Here’s what we have in store for you this week:
- The Rundown: Bringing loss prevention back to the future
- Worth Your Time: Your next return might come from a bot, not a customer
- What We’re Up To: Roadshowing our way through NYC and Dallas
The Rundown
Most retailers organize loss prevention like it’s 1995.
Loss prevention handles in-store theft.
Digital commerce teams manage returns abuse.
Customer service owns chargebacks and claims.
Everyone reports their wins. Nobody sees the pattern.
We’re back with Pedro Ramos this week to bring loss prevention back to the present. He’s got three non-negotiables that separate the retailers protecting margins versus those bleeding cash:
- Unified data that actually talks: Walk into most retailers and ask which customers are exploiting multiple fraud vectors across channels. Prepare for awkward silence.It’s not that the data doesn’t exist. Returns teams spot abusive patterns. Shrink analysts see inventory discrepancies. Fraud teams flag suspicious activity.
But nobody’s connecting them to the same organized groups running coordinated attacks across systems that don’t share intelligence.
- Systems that stop fraud and abuse before it costs you: Traditional loss prevention is basically CSI for retail. You dig through last week’s transactions, spot the pattern, write the report, and by then the money’s gone.Modern setups decline the suspicious transaction in real-time, the same way your credit card company blocks that weird charge from three countries away before you even notice.
This also solves an unfair fight most retailers don’t talk about.
You hire someone to make customers happy, hand them a name tag, then expect them to interrogate professional criminals who do this for a living with rehearsed scripts and emotional manipulation tactics.
Let the system handle enforcement. Let your people handle hospitality.
- Finance owns the strategy: Here’s an easy tell, check the org chart.If loss prevention reports to operations, you’re optimizing for case counts and investigation metrics. If it reports to finance, you’re optimizing for margin protection and revenue impact.
CFOs care about three things: drive top-line growth, expand margins, don’t add headcount.
When loss prevention becomes a finance function, the conversation goes from how many bad guys did we catch to how much profit did we protect?
The sophisticated players figured this out years ago. They optimize business over departments.
The complete playbook walks through building this operating system, removing human bias from enforcement decisions, and repositioning the CFO conversation around margin expansion instead of security budgets.
Worth Your Time
We know time is money, so we won’t waste yours
- Retailers are drawing a hard line on agentic commerce, telling shoppers they own the returns their AI agents make on their behalf (Chain Store Age).
- Michaels’ new “Ask Mike” shopping assistant fielded almost 75,000 conversations in its first weeks live (Retail Dive).
- 68% of online shoppers say a fast refund makes them more likely to buy from a retailer again, and most still expect free returns (Chain Store Age).
What we're up to
Last week we brought a small group of retail leaders to The Ned in New York — apparel, footwear, sporting goods, department stores — and spent an afternoon doing something most teams never do: putting a real number on their loss exposure across returns and shrink.
The best conversation of the day was around building a CFO-worthy business case for returns. The most important point was proving to CX and ops that most customers never get touched by “warn” or “decline” decisions, which means the associate doesn’t have to be the bad guy at the counter. We also closed with a retailer who stopped chasing fraud and started optimizing for total loss — and found significant profit hiding in processing, abuse, and BORIS.
Next stop is Dallas on October 14. Save your spot.
