Archive for the ‘inventory shrinkage’ Category

Top three sources of retail inventory shrinkage

The top three sources of retail shrinkage according to the holy grail of the studies (The annual University of Florida’s National Retail Security Survey) are, in order greatest to least, employee theft, shoplifting and administrative and paperwork error.

Most smaller to mid sized retailers, usually ten locations or less, typically would say they believe shoplifting to be their number one source of inventory shrinkage.  They initially respond with “I trust my people, they’ve been with me for …” in defense of their people.  The UF survey shows that 43% of all retail shrinkage is due to employee theft.  This accounts for $15.5 billion in annual inventory loss.  This makes employee theft the single largest form of larceny in the US, no other form of larceny costs Americans more money.

The second largest form of retail inventory shrinkage is through shoplifting.  Shoplifting accounts for 36% of total retail inventory loss totally $13 billion in a single year.  There is a staggering rise in organized retail crime (ORC) that is potentially underestimated and can involve employee collusion.

Thirdly administrative and paperwork errors account for 15% of annual retail inventory shrinkage.  Topping this list is the furniture group at 45% of all  inventory loss due to paperwork and administrative error with the shoes group at the bottom of the list at 7.5%.

The best way to solve these problems is to prevent theft from occurring.  Identifying best practices of operation and incorporating installed loss prevention security will prevent theft and inventory shrinkage and boost bottom line profits.

To learn more visit: inventory shrinkage solutions

Posted September 29th, 2010 by Staff Writer and filed in inventory shrinkage, prevent theft