Reviewing your stock shrinkage now?


In reviewing your stock shrinkage, first, consider the four major categories. In order from highest to lowest, they are:

Employee/internal theft
There are bad people everywhere. No one knows your control systems better than your staff, and some take advantage of you. Dishonest staff will sell goods without being recorded. If I bet with you that one of my clients this month would call us about a bad employee, I would probably win. 

Some shoppers do steal. This is particularly true of small items.

Sales errors, administrative and paperwork errors
Unfortunately, errors do occur. People do enter the wrong figures as they get careless and make mistakes. With computers, one error in a system often remains for all time. A special discount wrongly entered can result in customers getting a bigger discount than they should.

Vendor fraud or error
Unfortunately, it happens. The supplier, either on purpose or in error, makes mistakes. It does not seem to matter whether they are big or small; it happens with all. Again once it gets into your system, there will be problems. This is getting worse as we move from manual to electronic systems problems; we lose the extra layer of security in manual entry. Today if a supplier makes an error, it can get imported into your system without review. 

Your first prevention strategy for stock shrinkage is to review locations.

This is very easy to do in our POS system, almost trivial once you have done a stocktake. 

Go to the stock-taking section.

Now, look at the variances. 

Now review the places in the shop that have high values. 

A helpful practise here is to go to the area:

Now run through the stocklifting categories above. If it is in an area where only staff can go, warning bells should sound. 

Now imagine that you are a shoplifter. The fact is most shoplifters plan so:

*How would you do it? 
*Why pick this area? 
*Why were these goods picked? 

One client of ours had a relative come to the shop and act out being a shoplifter. It proved quite a useful idea.

Now consider moving items from there; moving mirrors, cameras, and shoplifting signs should be considered. 

Often minimal changes at no cost can result in dramatic reductions in stock losses.

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