Shrinkage is generally caused by two key factors, theft and fraud. Two things that are hard to control and monitor due to the human element. This is why you need to be vigilant and monitor your store, looking at ways you can protect it and your business.
Some areas to focus on are keeping systems up-to-date, making sure your staff are trained correctly and have practices in place to monitor any ‘fishy’ behaviour.
To help you manage this risk, follow these tips:
- Watch out for these signs of shoplifting and make sure that your staff are properly trained in this area:
– anyone who avoids making direct eye contact
– anyone that keeps looking at staff or the cashier
– anyone that keeps returning to your store but never purchases
– anyone that wears bulky clothing, particularly during summer – anything that is out of place for the time of year
– large groups of people, as they can make it easy for someone to steal
- Have your staff always greet and welcome people into the store. This one thing can often deter people from shoplifting because it shows that your staff are available and ‘on to it’.
- Keep your store neat and tidy. If it’s organised, you’ll easily spot if something is missing. If possible, arrange items that are prone to theft in such a way that you can see the items at all times.
- Use your store analytics to monitor things. This is your video surveillance and your inventory and POS systems. They can tell you what’s going on in your store in terms of missing inventory and foot traffic through your store. Use what you have to it’s best advantage.
- With regards to return fraud, this can be tricky to manage, which is why ensuring your staff are properly trained to deal with these situations is key.
- Always request proof of purchase for any returns and ensure that your returns policy is clearly displayed within in your store, so that customers know that if they are returning goods, they need to provide their proof of purchase in the first instance.
- If you have a high return rate, create customer profiles and ask for identification when a person is returning goods. If it’s someone that is returning goods regularly, you’ll need to deal with this issue further.
- When it comes to employee theft, you should consider these tips to reduce this from happening:
– hire the right people; always complete thorough background checks
– make your workplace a happy one – staff won’t steal from employers they love
– perform regular and random audits on your financials, this will pick up any discrepancies
The bottom line is – you need to ensure that you have the right systems and practices in place to reduce shrinkage in your retail business. If you need help in setting up inventory management and POS systems that will help reduce shrinkage in your business, contact us today.