Pull Loss Prevention Out of the Shadows, Offer a Seat at the Table

Why It Matters

Embedding LP and AP in enterprise decision‑making can recoup millions, safeguard margins, and make retailers more resilient to fraud and returns abuse.

Key Takeaways

• 2025 retail loss hit $796 billion, driven largely by returns.
• Returns abuse accounts for 12% of $706 billion in returns.
• Centralized transaction data enables AI to detect loss patterns.
• Mis‑coding damaged items can erode profits by millions.
• Early LP involvement shifts loss management to a strategic priority.

Pulse Analysis

The scale of retail loss is staggering: $796 billion in 2025, with returns alone swallowing $706 billion. While some of that loss is inevitable, a sizable slice—12% of returns—is linked to deliberate abuse, from fraudulent exchanges to associate collusion. These figures underscore a growing pressure on margins and highlight why traditional asset‑protection tactics, often hidden in departmental silos, no longer suffice. Retail executives must recognize loss as a systemic risk that demands a holistic, data‑centric response.

A cross‑functional data platform is the linchpin of that response. By aggregating point‑of‑sale, e‑commerce, call‑center and supply‑chain transactions into a single repository, finance, marketing, IT and LP teams gain a shared view of every interaction. Advanced analytics and AI can then surface anomalies—such as a sudden spike in “damaged” returns during a promotion—allowing rapid investigation before profit erosion compounds. Real‑time dashboards replace static reports, turning loss detection into a proactive, rather than reactive, capability.

Culturally, the shift requires LP and AP leaders to sit at the strategic table alongside CFOs and CMO‑type roles. When loss metrics become part of the core KPI set, organizations can align incentives, standardize definitions and embed loss‑prevention controls into campaign planning, inventory management and customer service workflows. The payoff is twofold: immediate cost recovery from mis‑coded items and a longer‑term reduction in fraud exposure. Retailers that institutionalize this collaborative model will not only protect their bottom line but also build a more resilient, data‑driven operating model for the omnichannel era.