How to Prevent Retail Shrinkage?

Retail shrinkage has been one of the monsters sapping into the profits of many businesses, including the retail stores.

No owner wants to run a business that reaps losses. Even though there are many reasons that a business can lose profits, retail shrinkage has been the real danger. It still affects retail stores today. Presently, inventory shrinkage has contributed to an annual loss of $100 billion for retail stores around the world. The most affected retailers are the fashion and accessories retailers.

With regard to this, many loss prevention devices for retail stores are recommended to help owners curb retail shrinkage. Regardless of the form in which it manifests in your store, you can make various adjustments and reduce its impacts on your sales. Retail shrinkage can happen in the form of shoplifting, return fraud, employee theft, or administrative errors. You cannot predict when the theft will hit your store or their frequency.  

There are simple techniques and loss prevention technology you can incorporate in your retail store to help you safeguard the merchandise and discourage fraudulent transactions.

Reduce Shoplifting  

Shoplifting is the most common practice contributing to a higher percent in annual loses. Low price and high-end merchandise can be carried out of the store unnoticed.  

To discourage this habit, you can install conspicuous surveillance like cameras. Use signage that clearly reminds them of the surveillance cameras and your seriousness to punish any shoplifters. Station your staff everywhere, including the fitting areas. Staff can show shoppers around and help them find anything they need. This will give the customers a sense of being watched and reduce the likelihood of shoplifting.

How you organize your store can also help you. Do not display goods in dark and unguarded corners. Place any small merchandise in locked glass cases for display.

Return Fraud

This practice mostly goes unnoticed, only until the annual audit and receipt assessing. Shoppers may return stolen merchandise or fraudulent receipts for exchange.  You can request such shoppers about their ID and track any frequent suspicious return transactions, require receipts for cash refunds for returned items. You should train your employees to be vigilant and spot any return frauds.

Employee Thefts

It is easy not to suspect your own employees. However, it is a big problem when you overlook their potential in causing your business pain and crippling the store. Some employees voluntarily steal merchandise, conduct fake transactions or take cash from cash drawers.

Create a good workplace culture to encourage trustworthy habits.  Also, use workers with integrity to help you identify and discourage the dishonest ones. Build the right team by training your employees to spot the retail shrinkage practices.

Administrative Errors

Losses do not always result from illegal activities. Administrative errors also account for bigger losses annually. Simple mistakes in your system like mislabeling items and accounting mistakes can cost you considerably.

To reduce such errors, implement right systems that accurately track inventory and sales. Monitor your point-of-sale and manage the inventory and ongoing transactions to reduce possible errors. Importantly, train the employees to audit the system, price items correctly and process returns.

Retail shrinkage effects on your sales can be minimized greatly. Just invest in the right systems and loss prevention devices for a retail store and you will retain your profits. Do not wait to hit your bottom line.