Retail shrinkage is defined as a reduction in inventory due to shoplifting, employee theft, paperwork errors and supplier fraud. These contributing factors increase exponentially when your place of business happens to be in a high risk area. What is a high risk area? Depending on where you live it may simply be a popular mall or busy part of town with enough foot traffic that a would-be shoplifter can easily blend in. More often it is a store located in a somewhat undesirable part of town; some place where the socio-economic status of the surrounding community lends itself to an increased crime rate.
Over time I have worked in a number of these types of places attempting to reduce the retail shrinkage in particular stores. As a result I’ve become acquainted with a number of drug addicts and boosters.
I consider these to be your 2 biggest problems in this type of area. Drug addicts steal either to maintain their high or to eat (any money they do make legitimately goes to drugs). They are often impaired at the time of the theft so they may or may not remember even being apprehended, arrested, etc. This is a problem because they may be back the very next day, unaware of what happened previously.
The real enemy of retail shrinkage is the booster. Unlike the drug addict they are fully aware of what they’re doing and normally consider it a business. Like any good businessman they make it a point to perfect their craft, know the industry, your limitations, etc. and exploit them in any way they can. In poorer neighborhoods boosters can regularly sell your merchandise for half of the price that you do. After all, they stole it so whatever they make is all profit to them. Your retail loss is their retail gain.
If you’re going to operate a business in a high risk area you need to make yourself aware of the causes of retail shrinkage in these areas. Do not let retail loss make your year of poor profits
For more information about retail loss contact us at Retail Shrinkage or call 1.866.914.2567 – Atlanta Georgia