Shrinkage in retail is the inventory loss occurring for many reasons, from administrative or internal errors to more darker reasons of shoplifting and employee theft. In 2011, the Global Retail Theft Barometer found that the Indian retail industry faced the highest loss from shrinkage in the world. Shrinkage can be one of the biggest contributors to the loss in profit. Whether shrinkage occurs due to criminal or non-criminal intent, every retailer should be able to quantify the losses they are facing, and learn about what steps can be taken to mitigate them.
Customers stealing items, or changing barcodes, and carry out other such fraudulent activities.
Employees can abuse discounts, transfer merchandise without authorization, and manipulate the cash in the register.
Incorrect pricing, inefficient record keeping, and other such errors can lead to considerable reduction in profits over the long run.
Shrinkage can mess up the entire supply chain, and it has the potential to be a major cog in the operations of any retailer. Fortunately, technology and automation have evolved and given methods using which shrinkage can be effectively monitored and controlled.
Tackling Customer Theft
The most straightforward way to reduce customer theft is by having CCTV cameras around the store and ensure that there is staff monitoring each part of the store. However, customers can still change or swap barcodes for items. Such activities can be caught at the POS terminal. For example, Retail Pro gives retailers the option to store upto 10 product images, so that the cashier at the checkout counter can verify if the barcode scanned matches the item being billed.
Tackling Employee Theft
Employee theft can, for the most part, be curbed by upgrading the POS system in use. Listed here are some features that Retail Pro provides to deter employee fraud -
Tackling Administrative Theft
Using a centralized repository for all information related to inventory, promotions, customers and employees can create a powerful audit trail for all transactions. Having such an system can itself reduce many administrative errors. It also reduces the churn occurring from information being split across multiple sources.
In 2018, it is important that you gain a clear picture of what is happening inside your retail outlet. To get a clear picture of all the products and sale, you need to invest in an effective inventory management system. Contact us to know more about how Retail Pro can help you.