Having your own business isn’t easy, more so to keep it afloat. Uncontrolled retail/inventory shrinkage erodes profit, ruins annual budget (among others) to the point the business loses its viability. Employee theft, shoplifting, supplier fraud and paperwork audit errors are the primary causes of retail shrinkage. Having a loss prevention plan that will help your business cope with retail reduction.
This article focuses on some practical tips that you can implement in your shop to reduce retail loss.
Businesses lose a significant amount of money to shoplifters (£6 billion per year), so it’s imperative that shoplifters are stopped. Here are some simple tips to help curb the crime in your shop.
Meet and greet. Greeting every customer who walks into the store with a simple, “How can I help you?” lets the shoplifters know that workers are aware of who is in the store. This technique deters them.
Expand your views. Widen spaces between display counters, use short floor fixtures near entrances and exits, install mirrors throughout the store expanding your line of sight. Your view of customer activity will be less obstructed, and this will make potential shoplifters feel like they are visible.
Post warning signs. Signs are an excellent crime deterrent. Put up signs that warn about the consequences of shoplifting to discourage criminals. It can be as simple as, “Shoplifters will be prosecuted” – just to let them know that you have an iron fist when it comes to shoplifting.
Prevent Employee Theft
Employee theft is one of the biggest causes of retail loss – it can be as impudent as stealing cold cash from the vault or charging a customer a price, then ringing them for less and pocketing the difference. There may be different ways of stealing, but theft is theft. Here are some practical tips to reduce it.
Perform background checks. Are you hiring new staff? Make sure to perform a background check on the said job applicants. Gather references from previous employers, look for any criminal record (especially theft-related), false information, or a lack of job history.
Unscheduled inspections are key. Making unscheduled inspections or audits of inventory is prudent. Dishonest employees thrive in stores where the supervisor is relaxed – and procedures have loopholes that are all to easily circumvented.
Other Causes of Loss
Other causes of loss can be vendor error or fraud as mentioned earlier – and this mostly occurs when vendors do their stocking. Prevent this by doing truck/delivery audits, and keeping a close eye on the receiving end. This tactic will keep you from mistaking missing inventory for the stock that your store never carried.
Administrative errors account for about 12% of retail shrinkage – and they are often the result of simple pricing mistakes because of markups and markdowns. Auditing is an excellent solution to this problem, as well as rigorous employee training or professional development.
Shrinkage is a severe problem for retailers, but with careful hiring, vigilance, clear policy regarding shoplifting, and consistent audits and professional development, you can prevent loss on your small retail business.