How to Prevent Retail Shrinkage at Your Retail Store

    Nov 17 2014

    Topics: retail shrinkage

    As a retail store business owner, you need to prevent your business from retail shrinkage. Many people think retail shrinkage is just another term for shoplifting, but it's much more than that. Retail shrinkage refers to any profit lost by the loss of goods and products. This extends beyond external theft. You might assume that retail shrinkage is an expected and unavoidable loss that comes with territory. It doesn't have to be. There are ways to protect your business against internal and external theft. Protect your business against retail shrinkage by following the steps outlined below.

    Causes of retail shrinkage:

    This might surprise you, but when it comes to retail shrinkage, employee theft is the number one cause. The second most common cause of retail shrink would be shoplifting. Other causes include paperwork errors, damage during shipping, vendor fraud, and inappropriate discounts.

    As a business owner, you don't want to have to think about your employees being dishonest. You can't imagine any of them stealing from you behind your back. While you'd like to think every employee you've hired is honest and loyal, it's important to acknowledge that internal theft is a serious problem and that there are ways for you to prevent it.

    How you can prevent retail shrinkage:

    * Maintain accurate inventory records.

    * Educate employees so they can help reduce shrinkage.

    * Put proper systems with built-in controls in place to reduce/eliminate shrinkage.

    * Implement cash management solutions to free up your managers time in the back counting money allowing them to better monitor the store, look for potential shoplifters and manager their staff.

    * Implement effective shoplifting prevention techniques. For example, an employee should always welcome customers directly when they enter the store. This could deter them from shoplifting.

    * Continue to follow and enforce policies and procedures that are put in place. Make sure employees are following all procedures properly and consistently.

    * Do not allow employees to complete their own purchases. The owner or a manager should always ring through employee purchases.

    * Do not allow cashiers to grant refunds and credits to customers. Managers must approve all refunds and credits.

    * Keep your store neat and tidy so salespeople can easily spot missing merchandise.

    * Eliminate blind spots on your sales floor. There shouldn't be any at all, but if there are, be aware of them and do your best to monitor these hidden spots.

    * Train your staff thoroughly. You can't always be at the store, so your employees are your best defense against shoplifting.

     You need to give shrinkage control top priority. Follow these steps to protect your business from retail shrinkage. You and your employees work hard to earn money for your business. Don't let those profits wind up in the wrong hands.

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    Andrea Lombardi

    Andrea Lombardi

    Andrea joined the CashTech team upon its inception in 2003. Learning the business from the ground up, she now utilizes her expertise in account management, planning, and negotiation while managing the daily operations of CashTech’s sales, marketing, and logistics departments. Andrea holds a bachelor’s degree from the University of Western Ontario. She enjoys travelling and has a passion for personal fitness, including obtaining her kettlebell certification. Andrea lives in Toronto with her husband and two young sons.

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    CashTech Currency Products Inc.
    1040 Cardiff Boulevard
    Mississauga ON, L5S 1P3

    905.696.0733