The loss of inventory – especially due to retail theft – happens to be a fairly huge problem for retailers across East Africa.
Theft in your retail store can be extremely damaging to your bottom line. Think about it: if you have a 10% margin on each sale you make, you would need to sell an additional $1000 worth of products to compensate for a loss from a $100 theft. That’s a big deal!
Further, every year, retailers small and big lose huge parts of their inventory to retail stock theft, Shs 5 billion to be precise, to shrinkage. Retail theft can happen at any point from the time the consignment arrives at your warehouse. It may be whisked away from the consignment itself, written off as damage even though it is in perfect working condition, or pilfered one product at a time over many days.
If you’re a serious retail business, you simply cannot ignore stock theft.
Major sources of Retail Stock Theft
The first step in tackling retail stock theft is to identify the source. Some of the common sources that lead to the loss of retail stock because of theft include:
- Shoplifting by customers
- Employee Theft – for their personal use, reselling products to make extra cash
“A local study of retail theft found that employees who steal from retailer’s average Ksh 15,800 in theft, while the average shoplifter will only take about Ksh 550.”
- Administrative and paperwork errors – while counting stock, pricing items (marking up and marketing down prices) or discounting newly stocked items
- Vendor fraud or error – by either providing fewer inventory units than you invoiced or by stealing other products.
- Unknown Loss
Measures retail stores can put in place to avoid pilferage and protect the merchandise
Combining technology with a smart anti-theft strategy, you can catch thieves red-handed, make your store theft-resistant, and reduce losses.
1.Train Your Employees to be alert to key indicators of potential theft such as
- Pay extra attention to customers who have bulky handbags and strollers.
- Keep an eye out for customers who spend a lot of time watching the staff.
2.Optimize Your Store’s Design and Layout for Theft Prevention
- Place your checkout so that customers must pass it while exiting. Given that most consumers turn right upon entering, place your checkout prominent on the left-hand side. Also, make sure to never leave your register unlocked or unattended
- Install security mirrors in the secluded parts of your store while ensuring there’s adequate lighting.
- Keep small or expensive items in locked cabinets
- Keep dressing rooms locked and limit the number of items taken in by each customer
- Anti-Theft Signage at appropriate points in your store
- Place a sign at or near your front door as it’s often the first place shoppers look. On the inside place them up high where shoplifters will most likely check for surveillance cameras
- Consider signs featuring eyes, which research has proven to double the likelihood of compliance
- Set up security cameras/ software – to monitor store activity at all times and view video recordings to check for retail theft when you need to.
- Electronic Article Surveillance (EAS) Detection Systems like tags, labels, antennas, spider tags and more from CompuLynx.
- By attaching security tags to your products, retailers can trigger off an alarm if a shoplifter walks out with a product with the tag still on through the electronic sensors at the exit gates.
- Use Radio frequency identification tags, or RFID tags- to track the position of the item at every stage of the supply chain.
- Set up user permissions at the POS systems – to control employees access to confidential data and tasks or functions that can result in stock theft
- Manage your inventory right – A powerful end-to-end inventory management software can help you with this by keeping track of your retail stock in real time and allowing you to fix any discrepancies at the earliest.
In conclusion, retailers can identify Stock Theft by frequent counting of inventory to identify discrepancies in your book and actual inventory values as quickly as possible. Adopting an inventory management software like NEXX Retail ERP Inventory to complement stock reconciliation; ensures accuracy for a long time to come. This would mean counting all your inventory just once before you start using the software.
By Dorcas Kinyua,
Marketing Manager at CompuLynx