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Minimalize your inventory loss. Tips to help you reduce stock shrinkage

Cristina Avatar By: Cristina | Last updated February 14, 2019

woman stealing red sweater POS stock

Inventory loss is one of the worst nightmares of any retailer. Dozens of millions of dollars are lost due to inventory shrinkage in the US retail business every year. The main culprits are shoplifting, coming either from outside or inside (through employee theft) and various administration errors. Stock losses have bad consequences for everyone involved. Business owners experience a decrease in profits, while employees are being punished by having their paycheck cut or losing their bonuses and benefits.

There are however some things you can change in order to mitigate inventory shrinkage.

The first thing you should do is ‘know your enemy’; learn how shoplifters operate, in order to know how to combat them. One of the things you should be aware of is that most often, shoplifters don’t stand out from the crowd. They strive to look and behave just like normal customers, which makes it even harder to identify them. There are some common techniques that they use and you should pay attention to them: they usually work in teams, having at least one accomplice. They also pretend to be focused on a certain item, while slipping another product into their pocket. Although, some of them don’t put the item directly into their coat or bag. They might initially place the item into the shopping cart and only then move it and heading towards the exit of the store.

Be careful how you arrange your merchandise. The placement of your products is very important. Try to place the more expensive, valuable items in the back of the store. You can also put those type of items in locked cases.

Install signs and security cameras in as many areas of the store as possible. Not only will they discourage potential shoplifters, but they will also help you identify thieves and even convict them based on clear evidence. A cheaper alternative are mirrors, which should be installed in the blind spots of your store.

While bigger items are easier to protect and lock and harder to steal, you shouldn’t forget about smaller products either. Secure those too with magnetic clips or special seals. Cash should also be deposited in special cash drawers that are secured.

Hire someone to monitor your store. Designate someone just for this task alone and don’t burden him with other duties, so that he can focus on doing the best possible job.

Train your staff to know how to prevent shoplifting. This way you’re  not only teaching them what has to be done, but you’re also showing them that you’re paying attention to this problem so they won’t try any schemes themselves.

Invest in professional inventory management software and POS systems. This way you’ll talk numbers and know exactly what goes in and out of your store. Always confront your software results with manual counts, to reveal any discrepancies. A good thing about modern POS systems is that they let you set specific user permissions and restrictions, so that way you can choose who is allowed to perform what tasks.