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 

I recently interviewed an employee of a large retailer that had contributed quite readily to the inventory shrinkage of that store, in a short amount of time.  He had a friend of his that was a cashier give him an expensive gaming system by pretending to ring it up at the register.  When a week or so passed and they were never caught, he let his friends know.

His friends just had to go through his register when he was working, and they received gaming systems, movies, clothing, etc.  By the time I interviewed him the thefts had only been going on for about three weeks, and the total loss was estimated at over $1500.

This type of inventory shrinkage is common among retailers, and can be difficult to identify unless you have good procedures in place to track your inventory.  In this case, an alert electronics employee alerted asset protection that there were missing gaming systems that had not been sold.  The inventory loss was identified resulting in these thefts being stopped relatively quickly.

A business owner can prevent retail theft like this by keeping track of your inventory, especially high ticket and high theft items that are desirable to thieves.  By randomly checking these items as often as possible, and comparing the quantities on the books to sales and physical inventory, an  inventory loss can be identified quickly after it has occurred, minimizing the total loss experienced by the business.

Inventory shrinkage results in lost profit.  We are in business to make a profit, not to incur a loss through shrinkage.  Quickly identifying the cause of the inventory loss , such as a thieving employee, and eliminating it is the best way to stop this type of inventory shrinkage . 

Your aggressive business attitude is the first line of defense to prevent retail theft !

For more information about inventory shrinkage or inventory loss contact us at: prevent retail theft or call 1.866.914.256 – Atlanta Georgia

Every business owner who opens his doors to the public is concerned, or certainly should be, with how to prevent retail theft . It’s a two-edged sword – in order to make a profit in the retail business you need people to frequent your establishment; however, every person that steps into your store is a potential threat to that bottom line that is infinitely important. What do you do? Here are a few pointers that may help you keep a handle on things within your store.

Be vigilant in your pricing. Loosely controlled pricing procedures can leave you open to huge losses both internally and externally. Only certain individuals should be allowed to set prices and mark merchandise, and all pricing should be done by machine or controlled rubber stamp. Price switching is a common way that shoplifters will try to gouge you. The next thing you know an item that should have costs $100 just walked out the door for $19.99. Who eats that loss? You got it, you do!

Also, keep an eye out for fraudulent refunds. There are many cases where an individual comes in and buys a coat. The next week they come back in, select the very same coat from the rack and go up to the refund counter with what appears to be a valid receipt to get their money back. If you’re not careful you just gave away a free coat. Keep your refund counter near the entrance and train your associates to be aware of what an individual walks into the store carrying and what they pick up while inside.

It can be tricky to prevent retail theft . After all, the thief has nothing else to do with their time but try to figure out how to hustle you out of your money and merchandise. You, on the other hand, have a business to run and legitimate customers to support and supply. However, employing just a few of these tips at the onset can save you a great deal of heartache and even more greenbacks. Spread the word, it’s everyone’s job to prevent retail theft 

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

Retailers face  inventory loss / inventory shrinkage every day and battle with how to reduce it.  There are several ways to reduce inventory loss / inventory shrinkage which include a balance of both installed technology and written company loss prevention procedures implemented by personnel.

A simple “hello and welcome” to every shopper while looking them in the eye will reuduce shoplifting.  Ameteur and impulsive shooplifters will not steal according to studies when they feel they have been recognized.  The two magic words that reduce shoplifting / inventory loss / inventory shrinkage are “customer service”.  Shoplifters hate customer service and will leave empty handed, and will not likely return.

Installing cameras are thought to be a way to control inventory loss / inventory shrinkage however it is a passive solution.  Only the recorded event will be helpful if you know when/ where to look for it to be used as evidence in prosecuting thieves or employees stealing.

Installing a EAS system, electronic article surveilence system will reduce sholifting losses by as much as 70% as proven recently by Price Waterhouse Coopers study of a major supermarket chain.  Checkpoint systems is the leader in EAS systems.

The University of Florida’s Retail Security Survey reported that the average value of a shoplifting incident is $256.  At a 2% net marging the retailer would have to sell $12,800 to generate $256 of profit to replace the stolen goods.  Stop that theft from happening and all that money hits the bottom line net profit margin.

For more info visit inventory loss / inventory shrinkage 

There are a number of ways to prevent theft within your organization and with a little common sense and ingenuity I promise you’ll be able to reduce your company’s inventory shrinkage . Let’s start at the beginning with employee background checks. Everyone from your Director of Operations to the guy/ girl who takes out the trash at night should undergo and extensive screening of their criminal and labor history. Credit checks are also a good way of determining a person’s level of personal responsibility. After all, if I can’t take care of my own money I’m probably not going to do a very good job at taking care of yours. 

Next is my personal favorite: cameras. Install an effective and operational CCTV system in your place of business. Place cameras in plain sight. True, nobody likes to know that “big brother” is watching their every move, but they enjoy the prospect of being taken out in handcuffs even less. Say what you want to but fear is a great deterrent. EAS, or Electronic Article Surveillance, is another excellent way to prevent theft in your company. Audit everything from your receiving processes to the way merchandise gets moved to the sales floor to the way its handle at the point of sale. If your company has a process there’s a way to check it to make sure it’s being handled properly. Do so, and do it regularly and vigilantly.

Lastly, there’s no reason for everyone and their Aunt Gretchen to have the combination to your safe. Limit access and keep an up to date log of everyone who has that access. If someone happens to quit or be terminated, change the combination immediately and update your log accordingly. These are just a few tips and strategies that I’ve found useful over the years. Take heed and they will help you prevent theft within your organization.

Do not let your inventory shrinkage put YOU out of business!

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

The fact is that even when we know it’s going on it’s still rather difficult to prevent theft in the workplace for multiple reasons. One of the main reasons I’ve found is that often times employees don’t fully understand what constitutes theft. Sometimes they feel as if they’re just borrowing the merchandise, or delaying payment for it. Other times they feel that the item is so small or insignificant that you, the employer, “won’t miss it”. 

The other day I approached a cashier. We’ll call her Jane (simply because that’s not her name). Jane’s eyes got as big as saucers when she saw me coming and she struggled to swallow down something she was chewing. I asked, in a semi-joking fashion, “Did you bring enough to share with the class?” She immediately responded, “Oh, it was just a candy bar. I was gonna pay for it when I went on break.” It took me 15 minutes to explain to Jane that even though she may have intended to pay for the candy, the fact that she had consumed it before actually rendering payment constituted theft. Jane was flabbergasted. 

I’ve actually seen employees go into the register, take out $40 bucks on Thursday and replace it on Friday after they get paid. They thought nothing of this practice because their intent was not to steal. The problem is they, like Jane, never really understood what constituted theft. It’s your job as an employer to establish easily understood rules and guidelines and to enforce those rules vigorously. Do this and you’ll be able to prevent theft in your workplace much easier.

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

The best way to battle inventory shrinkage or inventory loss is to prevent theft. All businesses experience loss or “shrink” of some kind, retailers are especially prone to this plague since they battle not only employee theft but also theft due to shoplifting and organized retail crime.

Let’s look at some tips to help prevent theft from occurring in the first place.  Firstly there should be written policies and procedures that are designed to control losses and prevent them.  For example in a retail environment; retailers who are good at controlling shoplifting will always greet customers when they enter the store and be sure to get eye contact.  This eye contact is proven to stop shoplifting in the impulsive and amateur shoplifters because they feel they have been identified.  This also sends a message that you are paying attention.  Apparel and accessory retailers will also pay attention to what the shopper is wearing on the way in and be sure that is what they are wearing on the way out.  One way to do a good job of this is to zone the staff in areas to help reduce the amount of traffic any particular employee has to track.

Another way to prevent theft is to install technology that will deter shoplifters and reduce inventory shrinkage.  Such as Checkpoint Systems electronic article surveillance (EAS) systems.  These systems involve antennas installed at entry and exit doors that pick up sensors placed on merchandise.  If the tagged merchandise gets to the antennas an alarm will sound and lights will flash alerting staff to the act.  Staff that are well trained in how to maximize the use of Checkpoint Systems technology have been proven to cut inventory loss by over 50%.

For more info visit: prevent theft or call Loss Prevention Systems, Inc. at 1-866-914-2567

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

To prevent theft is a main staple of the loss prevention world. Yes there are other areas of inventory loss such as paperwork errors and they are important. However, it is the threat of theft that has to be foremost on a business professionals mind. What good is it to have sales and loose all the profits to theft? You can have robust sales and be loosing money if it is being stolen out from under you.

Think of it this way, if you have a 2% profit margin and $100 is stolen from you are you simply out $100? NO, you have lost $5000.00 ($100/.02). That means you will have to sell an additional $5000 to BREAK EVEN on a $100 loss. Depending on your business that could be the total sales for an hour, day or a week. Also, keep in mind that you will not survive long in business with these kinds of losses.

So let’s prevent theft. It’s cheaper and there is a return on investment (ROI). If you are a retail store and you do not have a particular item in stock because they are stolen frequently then your legitimate customers can’t buy them so they go down the street to someone else who has them. Oh, and that same customer also purchases everything else they need at your competitor simply because it is easier. After a while they stop coming into your store. Always look at theft prevention as an ROI.

If you have a wholesale or warehouse environment the same thing applies. If you do not have the goods to ship then your customers will go elsewhere. Prevent theft to begin with and your profits will climb. The great thing about this is that it does not involve adding any new customers. You are simply keeping the money you should be earning on the bottom line.

One other thing to keep in mind. If you don’t think you have a theft problem, “it can’t happen to me”, “my people wouldn’t do that to me” or any other thought like this then you probably have a bigger problem than most since you are ignoring it.

For more information: prevent theft or call 1.866.914.2567