Asset Protection & Loss Prevention Flashcards
7 cards from real CPI practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Asset Protection & Loss Prevention flashcards as text
What is the primary objective of an asset protection program?
Answer: To minimize financial losses from theft, fraud, and operational errors
Asset protection programs are designed to minimize financial losses from theft, fraud, waste, and operational errors in order to protect a company's profitability.
In loss prevention, 'shrinkage' refers to:
Answer: The loss of inventory due to theft, damage, administrative error, or vendor fraud
Shrinkage is the inventory reduction caused by employee theft, shoplifting, administrative errors, and vendor fraud, typically measured as a percentage of sales.
Which loss prevention strategy focuses on designing physical environments to reduce criminal opportunity?
Answer: Crime Prevention Through Environmental Design (CPTED)
CPTED uses environmental design principles — natural surveillance, natural access control, and territorial reinforcement — to deter criminal activity before it occurs.
What does exception-based reporting (EBR) primarily help loss prevention professionals identify?
Answer: Anomalous transactions or behaviors that may indicate fraud or theft
EBR analyzes point-of-sale and other transaction data to flag unusual patterns that fall outside normal parameters, indicating potential employee theft or fraud.
Which of the following is an example of internal theft in asset protection?
Answer: An employee voiding legitimate transactions to steal cash
Internal theft involves employees stealing from their employer, such as manipulating the point-of-sale system to void legitimate transactions and pocket the cash.
What is 'civil recovery' in the context of retail loss prevention?
Answer: A legal mechanism allowing retailers to demand restitution from shoplifters without criminal prosecution
Civil recovery allows retailers to send demand letters to shoplifters requiring payment of a set restitution amount, separate from and in addition to any criminal proceedings.
The '1-10-100 rule' in loss prevention illustrates that:
Answer: Preventing a loss costs $1, detecting it after the fact costs $10, and recovering from it costs $100
The 1-10-100 rule demonstrates the escalating cost of losses: prevention costs $1, detection after the fact costs $10, and full recovery costs $100, emphasizing the value of proactive prevention.