To Pad Or Not To Pad, This Is The Question In Inventory Loss

I heard a store manager once say that creating some “pad” to cover his inventory loss is a good thing. It covers losses like shoplifting, employee theft, vendor fraud, paperwork errors and the like. I remember looking at him and saying “Wouldn’t it be easier to just run your store properly?” This person was in charge of a multi-million dollar operation. His “old school” way of doing things was to cover up losses, get his bonus and not worry about the company’s profits. We terminated him shortly after he made these statements, which occurred during an inventory and inventory shrinkage investigation. All of that padding he had done came out in a physical inventory that he was not allowed to control.

Inventory shrinkage control is not rocket science. It is very simple. If you have a theft problem such as shoplifting or employee theft FIX the problem, don’t bury it to come out later. To prevent theft is much simpler and cost effective. Take shoplifting for example. Employees should be trained to keep an eye on what inventory loss they are seeing in their normal duties. If a particular item is suspected of being a high theft problem start with doing cycle counts. Count that item on a scheduled basis. This could be daily, weekly or monthly. If it is found to be causing inventory shrinkage then take action.

This could mean moving the item to a spot more visible to store staff. Or the items may need to be tagged with your Checkpoint EAS inventory control tags. Of course you always want to consider the normal store environment issues such as is there enough lighting (shoplifters love dark areas), are your shelving units stacked so high that store staff cannot see well, are there dark hidden corners and so on.

The point is treat the illness not the symptoms! And don’t wait; controlling inventory loss is not a part time endeavor. It has to be an ongoing process.

For more information: inventory loss or call 1.866.914.2567

Posted September 8th, 2010 by Staff Writer and filed in prevent theft

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