Shrinkage is an issue that every retailer seems to face. Losses of inventory and cash can occur as a result of theft, shoplifting, admin mistakes, and vendor fraud. While it may seem overwhelming to try and avoid theft and fraud there are several ways to reduce shrinkage in retail.
What is your business doing right now to prevent shrinkage? Answering that question will allow you to identify the areas where you need to increase your security, visibility, and efficiency.
After identifying problem areas, you can take action by maintaining proper cash and inventory management. It’s best to be proactive in your loss prevention program so you’re able to increase your profitability. Here we have established five ways to reduce shrinkage in retail; read on to discover how you can better protect your business.
1. Monitor Transactions Every Day
When your business has a high volume of transactions each day, it can be tricky to keep on top of monitoring transactions. It’s easy for fraud and/or theft to slip under the radar through voided or cancelled sales.
Let your staff know you’ll be checking the transactions each day to avoid instances of internal theft, and follow through to protect your business from costly shrinkage.
2.Train Staff and Increase Employee Accountability
High rates of employee turnover are common in retail environments; this can make it difficult to establish a consistent presence of employee accountability. If your employees are knowledgeable and well-acquainted with your company policies and procedures, they are more likely to feel a sense of accountability for their work and are also more likely to stay long term. Investing time in training your staff will reduce your rate of internal theft. Being a visible leader in your business will also help to establish that you are both available for help and monitoring your employees’ working habits to ensure they are following policies and procedures.
When training staff, it’s helpful to give a crash course on store security and how to prevent shoplifting. Give your staff simple tips like talking to each customer who enters the store and monitoring customers as they move through the store. This will get them on board with protecting your business from theft or fraud.
3. Make the Investment in Inventory Management
Inventory loss is another struggle that retailers face, both internally and externally. Making use of an inventory management system can help you keep track of your inventory as it moves from your supplier to your business and as it is sold. Tracking your inventory will alert you to any discrepancies so you can reduce your shrinkage.
4. Engage Your Staff in Loss Prevention
When your employees make loss prevention a goal, it is much easier to stay on top of it, which is why this is one of the top ways to reduce shrinkage in retail. Group efforts make loss prevention much more effective and also builds a culture of company pride. Make sure you establish clear guidelines so your staff knows how to report suspected theft or fraud safely and with confidence.
5. Make the Investment in Automated Cash Management Technology
Investing in automated cash management technology is an effective way to increase the security of your business and protect against shrinkage. Cash management technology takes over many of the tasks that your staff would traditionally be required to do by hand.
By reducing the contact your staff has with cash, your potential for cash management mistakes and theft are also reduced. Automated cash management will improve your bottom line and protect your cash from internal and external theft while giving you the chance to get the better of retail shrinkage.
