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Reducing Shrink

Written by: Will Atkinson

Article Overview: Inventory Shrink represents a major cost to retailers, and it takes a combination of resources and business practices to properly combat it.

Reducing Shrink

We all know that shrink is a reality in retail, but what can be done about it?

Obviously shrink through outright theft, sweethearting, swiping, and other methods reduces profits and causes headaches with inventory. It can be hard to get an exact picture of how much it is costing you without some rigorous inventory control methods, but the cost can be significant. Besides the dollar amount of the losses, your staff have to spend additional hours every week looking for items and counting inventory, and then you have to restock those items.

The most obvious way to combat shrink is with a loss prevention system involving tagging each item with a sensor and then having reader gates at the exit. This will prevent most casual shoplifting, but is very expensive and intrusive. It also slows down the checkout process and there are inevitably mistakes that cause false alarms, annoying the shopper and causing extra work for employees, not to mention the irritating alarm sound.

Another way is to combine a good point of sale and inventory control system with a robust video security system. This combination will allow you to easily track your inventory, while the cameras provide a strong deterrent to shoplifters. If your clerks know they are being watched, and that it's easy for you to audit their transactions using the system, then they will be less likely to engage in sweethearting and other checkout scams.

Ultimately it's up to each retailer to decide how much of a problem shrink is, and that will help determine the appropriate course of action, but a good inventory control system pays dividends elsewhere and can be a big help in combating shrink as well.

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Article Tags: cameras, checkout, clerks, dividends, false alarms, gates, headaches, inventory control methods, inventory control system, loss prevention, losses, nbsp, outright theft, point of sale, prevention system, profits, scams, shoplifting, video security system



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