Prevent Theft

One of the truly unfortunate truths of business is that you’re going to have  inventory shrinkage ; the trick is controlling it and keeping it at a manageable level. Well, you can’t control what you don’t understand. Therefore I’ve compiled a short tutorial to show you how to calculate your inventory shrinkage . Hopefully this will allow you to get a better grasp on what you need to do to keep that shrink monster in the closet.

First, check your company’s records to determine the value of inventory that you should have in stock based on prior inventory totals and the value of goods sold. This number is known as the book value.

Next, total the actual value of inventory that you have in stock. This number will most likely be different than the book value because of losses, damaged goods or theft.

Now subtract the actual amount of inventory from the amount that you should have according to your own financial records. (You should be keeping an eye on your inventory shrinkage by logging your known losses, damages and theft throughout the year).

Divide the difference by the amount you should have to calculate the shrinkage rate. Multiply the shrinkage rate by 100 to convert to a percentage. This percentage is the amount of your inventory that has disappeared through theft, damage or paperwork errors. Depending on how you keep your books this number may be a little disheartening. However, there’s hope. This number is simply a starting point for you to examine your processes by and find out where and why your inventory shrinkage is at that level… and fix it.

For more information about inventory loss or inventory loss prevention or inventory shrinkage contact us: prevent retail theft or call 1.866.914.2567 – Atlanta Georgia

There are multiple areas to consider when developing an inventory loss prevention plan. And it does start with developing a plan.  Policies and procedures for inventory loss prevention will guide employees on how to manage operations in a way that ensures best practices are followed and investments into systems and technology designed to prevent retail theft or losses for any type business will pay off.

The first area people mention to me when in this conversation is their “security system”, which is technically a burglary alert system.  These systems will alert authorities in the event there is an intrusion into your facility when the system is armed / when no one is there.  This needs to be part of the plan but the limitations need to be understood.

Next would be installing a CCTV / camera system.  This area is probably where companies spend the most money and yet use the systems the least.  They often are “set it and forget it” systems.  Now that DVRs will store 30 days and write over recorded information first in first out automatically, it is easy to forget the system is there.  Use the system as a management tool.  Choose a recorded segment of an employee doing a good job, sit them down to watch the footage and tell them you would like to thank them for a job well done.  This makes the system more active and will help curb employee theft issues, which are more devastating than shoplifting problems.

Another area to be sure you have regular processes in place to prevent retail theft is cycle counting high theft items.  Some retailers do this daily, some weekly to watch what is going on with these targeted items.

Use a Checkpoint Systems inventory loss prevention system. These systems will deter thieves from even entering a retail store and are shown to prevent retail theft.

Consider hiring a professionalk to perform an operational audit.  This will identify areas where you are vulnerable to loss and they will write your inventory loss prevention plan for you and all you need to do is stick to the plan.  You can hire these pros to quarterly make surprise visits to check on progress.

For more info visit: inventory loss prevention