Three basic rules to reduce shrinkage

We get it. You’ve worked hard all year, only to find out that your profit is not where you expertly because somebody stole merchandise and you have to pay for it.

So without getting into too much complexity as to how that happened, and how to prevent it, let’s start with some basics.

You shrink for one of three reasons; (1) the paperwork is not in order, (2) customers are stealing, or (3) your employees are ripping you off.

Much of this website is devoted to the finer details of each of these categories, but let’s cover the basics

Administrative Errors

Paperwork errors can either hurt you or appear to hurt you but may not roll down to the booth line. If your shrink is above 1.8% of annual sales, you probably need to address policies and procedures. 

Make sure you document every step of the way from buying to moving to selling your wares.

When you do this, you expose risks and can address them. But better yet, when you do this, you educate employees and you create a potential audit process. Just check one of the steps to see if everybody is doing what they are supposed to be doing.

Customer Theft

Most people do not intend to steal, they simply find themselves in a situation where they consider it and there is not enough risk of exposure to convince them that it is a bad idea. So if that is the case, create a risk of exposure!

How?

Aggressive and subtle customer service. Greet them with a verbal introduction, or simply make eye contact. Just don’t let them walk around like they are anonymous…Customers will appreciate it, and bandits will leave your store.

Internal Theft

There is no silver bullet…but we do know what makes a difference. Highly engagement teams drive higher sales, enjoy higher profits, experience lower accidents, and have less shrink.

So engage your team. Many articles deal with how to do this.

So there you have it. Three easy steps; create diligent processes, greet your customers, and appreciate your employees! Try it  – it works!