Cutting Your Losses
Posted: September 06, 2013
One of the biggest problems retailers face when it comes to losing inventory and return on investment (ROI) is shoplifting or theft. It’s an insidious problem that can put a big dent in your bottom line.
Theft can occur through employees, customers and administrative and paperwork error. A University of Florida national retail survey showed that 43% of diminished inventory is due to employee theft. This accounts for $15.5 billion in annual inventory loss!
About 36% of inventory loss comes from shoplifting. Administrative/paperwork error accounts for another 15% loss. A big rise in organized retail crime also affects lower profits.
Employee theft can also take the form of shoplifting, stealing cash, allowing others to steal items, consuming company-owned food, and employing refund, credit card or check fraud.
Studies have shown that inventory loss is reduced when turnover among employees is reduced and top-quality workers are employed. A retail recruiting firm can not only provide a perfect match for retailers’ needs, but can gauge someone’s background, integrity, honesty and judgment through experienced interviewing and reference checks.
Having a trustworthy and attentive staff can go a long way in stemming customer shoplifting. Greeting a customer when they enter a store sends a signal that 1) you’ve established communication and eye contact; 2) that you’re paying attention; and 3) that they have been identified.
Alerting staff to these practices is a start to ensure not only theft deterrent, but also good customer service. It also helps to target staff to high-traffic areas in a store and eases the burden of just one person paying attention to a suspicious shopper.
Checking customers’ large bags and backpacks, giving receipts and trashing discarded receipts, and alerting fellow employees to suspicious activities all aid in dampening potential theft. Also, asking a suspicious shopper if they need help and reminding them you’re there to help them will indicate to them that they’re being watched and will lessen any motivation to steal. Paying attention to price-tag switching is another way to lessen shoplifting.
Surveillance systems and alarms at store entrances and exits, tagged merchandise with electronic sensors and a well-trained staff who are aware of how these operate and interact can reduce inventory loss by 50%.
A store’s layout can really aid in product loss: Making sure registers are close to the store’s exit, staffing register areas and blocking those unmanned check-out aisles signal you’re on the ball; keeping sales displays neat and organized allow for better monitoring against missing product. Locked cabinets housing more expensive items as well as locked dressing rooms help stave off theft as well. Signs around the store noting how seriously you take security and theft should be posted.
Procedures for hiring, training and supervision of staff and management, plus policies that are clearly defined and implemented, can greatly reduce employee and customer theft and improve a retailer’s profit.TAGS: loss prevention,