Sources of inventory shrinkage and what to do about it

There are five primary categories or sources of  inventory shrinkage  as tracked by the number one resource on the subject “National Retail Security Survey” by the University of Florida.  Those sources are from least to greatest, vendor fraud, unknown, administrative, shoplifting and number one hitting at 43% of all  inventory shrinkage is employee theft.

Obviously the different sources require different solutions, although some solutions do work in multiple areas.  For example most businesses start with installing a CCTV system (camera system) which they believe will deter theft.  CCTV systems will deter the impulsive shoplifter who would not normally steal but has an impulsive desire to take something.  The camera in their mind is like a person watching over their shoulder.

In the loss prevention industry, CCTV is considered a passive solution since technically for the most part it is recording events and not actively stopping anything from happening.  Unless you review all the recorded data you will not know if and or when anything happened..

In the retail world EAS, or electronic article security systems are very popular and considered active systems.  These are the systems that incorporate some sort of hard tag that is pinned to the product or label that is applied top the product that will set off an alarm at the door if attempted to take out without going through checkout. 

For more info on what solutions exist, go here: inventory shrinkage or call Loss Prevention systems at 1-866-914-2567


Posted August 11th, 2010 by Staff Writer and filed in prevent theft

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