Retail loss can come in many forms. Most of the time we attribute this loss to either external theft (shoplifting) or internal theft (employees stealing merchandise, taking cash from the registers, etc.) However, shrinkage is defined as a reduction or loss in inventory due to shoplifting, employee theft, paperwork errors and supplier fraud. It is often assumed that when we purchase a product or products from a vendor or supplier that they will send exactly what we asked for. After all, we’re providing them with business and paying them for it. This is a terrible assumption.
You must always be aware that there are some organizations that have some rather unscrupulous practices, and in nearly every organization there exist one or two unscrupulous employees. Therefore, it would behoove you to keep a close eye on your receiving processes and perform regular audits every time you receive a shipment to manage any retail loss. Why? I had a case a few years back where a store’s jewelry department was seeing some extreme inventory losses. Of course we explored the usual suspects but the department was locked down tighter than Fort Knox, making shoplifting virtually impossible. The young lady who ran the department did so with an unrivaled zeal that made the idea of employee theft quite unlikely.
So, we examined their receiving processes and found that on many different occasions, dating back nearly 2 years they had been shorted on shipments; just an item here or there at first but the shortages had progressed to an enormous level. We coordinated with the vendor and law enforcement and found that an employee in the vendor’s organization had nickel and dimed several stores out of nearly $200,000 worth of jewelry in the previous years. If any of those stores had done proper and continuous receiving audits they would have been able to stop this retail loss much sooner.
For more information about retail shrinkage contact us at Retail Loss or call 1.866.914.2567 – Atlanta Georgia