Retail shrinkage is a massive problem for Canadian retailers. Losses cause approximately $10 million in lost revenue; this adds up to a total of nearly $4 billion dollars that Canadian retailers lose every year. Facing this staggering total, it makes perfect sense for retailers to prioritize preventing retail shrinkage and losses.
Preventing shrinkage in retail has been made easier with technological advancements. Now there are many solutions available that can increase your security and protect your business. So why does shrinkage remain such a big challenge? Protecting your business takes an initial investment, but it’s one of with a great ROI. By investing in your cash management procedure you can boost the productivity, efficiency, and profitability of your business, all while preventing shrinkage. Here’s why preventing shrinkage in retail should be your #1 priority.
Retail Shrinkage: Preventing Internal Losses
Believe it or not, internal theft is one of the biggest problems that businesses face when it comes to retail shrinkage. Over 33% of theft-related incidents in retail can be attributed to internal employees. Staff members can take advantage of having easy access to your cash and merchandise. Internal theft has negative effects on the profitability of your business while also negatively affecting employer-employee relationships and the overall workplace environment.
One of the best ways to reduce the rate of internal theft for your business is by boosting your employee accountability. Employees are more likely to be accountable for their work when there are clear expectations and guidelines for conduct and procedures. Creating and implementing policies and procedures for your cash management process will give your business the chance to boost accountability.
All policies should be clearly outlined and all of your staff should receive proper training to ensure that they are aware of how each policy should be implemented. Following up with employees after they have received training to ensure that they understand and to enforce your new guidelines is also vital to creating a culture of accountability within your business.
Preventing External Theft
While improving employee accountability can reduce internal theft, external theft can be difficult to pin down. External theft can be attributed to a number of different factors that result in loss of merchandise or cash. Cash related incidents might be from theft or the distribution of counterfeit currency. Regardless of how external theft affects your business, the underlying action step is to increase your security.
When it comes to cash, it’s important to ensure that you are making use of effective cash management techniques throughout your company. It’s also a best practice to make an investment in automated cash management technology. Currency recycling machines and smart safes are designed to protect your money from theft by providing physical and technological safeguards. Both machines involve a system of barriers that separate your cash from your customers.
Making an investment in counterfeit detectors allows you to accurately identify any counterfeit currency so that your business does not fall prey to fraud.
Here’s What You Can Do
Preventing shrinkage in retail is a team effort. All staff members from management to front-line workers must work together to develop a culture of loss prevention. Only by working collaboratively will the $4 billion dollar loss shrink for Canadian retailers.
Introducing cash management technology into your business gives you reliable and effective support to thwart both internal and external theft. Protect your business’s cash by investing in machines that guarantee you security, accuracy, and efficiency. Start by evaluating how shrinkage affects your business in particular and then find the best solutions for you. There are countless options available so that your business can become safe and profitable.