According to the website About.com, retail shrinkage is a reduction in inventory due to shoplifting, employee theft, paperwork errors, and supplier fraud. A business owner can be proactive in reducing shrinkage by having loss prevention policies and strategies implemented within their store.
Shrink costs retailers an estimated $31 billion a year, according to the National Retail Security Survey report on retail theft. Retail shrinkage is an unfortunate part of operating a business, but it does not have to be tolerated. A business owner can help reduce his or her losses significantly in a variety of different ways.
A business needs to have loss prevention procedures in place in order to have consistency when trying to control retail shrinkage. The advice of a professional loss prevention organization is often beneficial in helping a business set up these policies and procedures. All current and new employees must then be taught about theft, shoplifting, and the policies that are in place to reduce these losses.
Businesses often do not recognize that employee theft costs retailers more every year than external (customer) theft. A business owner and managers must be alert to the signs of employee theft within their business. Register shortages, unaccounted for merchandise and empty packages in “employee only” locations can all point to an employee theft issue. Controls such as locked back doors with limited access, accountability with keys to locked cases such as a key log, and CCTV for random video research of employees are all important to help prevent retail shrinkage, and to perform an investigation if there is an employee choosing to steal.
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