10 Ways to Reduce Stock losses in your Business
All retailers have a faced huge challenges in the last twelve months with the outbreak of Covid 19, they have had to refocus on so many elements within the business in order to survive. Some business focused on providing a vital service ensuring their teams and customers remain safe, others have had to reinvent their business, to focus on their online market in order to get through these challenging times.
No matter what your business, now more than ever all retailers must ensure that Stock loss is kept to a minimum. There are many ways to reduce stock losses in your retail business.
We have compiled a list of 10 ways to reduce stock losses:
- Use an EPOS system
Your EPOS system is a great asset to your business, many businesses do not realise the full extent of what it can do. It is an expensive tool but is often used as a cash box rather than to manage stock and cash flow more efficiently. Use it to track transactions, restricting employees on what they have authorisation over. Set the system to only allow discount, refunds or voids to be carried out by a manager.
Link it so card payments are processed at the EPOS terminal, some of these are automated to read the total amount onto the card reader automatically. If the amount had to be keyed in manually by an employee it is not integrated. There are many reasons why these would not be integrated; usually due to costs.
- Figure out who is stealings
There are many potential culprits causing the decline in your stock. Your customers, employees or suppliers are all possible threats to your business.
Your Customers: Usually for personal use or to resale.
Your Employees: There are various reasons that employees steal from their companies from lowering prices for friends, dissatisfaction at work. A modern EPOS system can reduce this.
Your Suppliers: Suppliers and contractors might overcharge you, resulting in costs for services or products that you never actually received.
Incorrect pricing: pricing items incorrectly would both be examples of errors that will add up to significant losses.
Have security in place for both customers and employees
Install CCTV: Installing visible security cameras throughout the store and storeroom has been proven to deter thieves. Be conscious of having cameras visible to the public but also subtly remind your employees that the security cameras are working and monitored often. Review the cameras weekly, even if there are no clues of shrinkage.
Erect signs: Post anti-theft signs around the store, warning of penalties that may occur as a result of theft.
Placement: Near the entrance/exit of a store is the optimum position of the cash registers. If possible try and have your store, if not some of your store visible from the till. Valuable items should be placed as close to the till as possible for ease of surveillance. Shoplifters are less likely to act if they know surveillance is high.Secure stockroom: Ensure your stockroom isn’t easily accessible to everyone, even to all staff members in some cases. Having limited access allows you to choose who has contact with back room stock, cutting down on potential theft.
Educating your employees about retail theft – It is important to educate your employees about the effects of retail theft on your business.
• Encourage employees to monitor people closely and be aware of suspicious behaviour. If they see this behaviour that they know to ask if any assistance is needed, to let the customer know they are being watched.
• Train them to know what to do in the event of theft occurring.
• Give your staff a reason to focus in on these issues, praise their observation skills and reward them if possible.
• Make staff aware of any implications if they decide to use their position to take advantage of stealing of giving away products at reduced prices.
- Beware of scams
Make certain that your employees are aware of any scams that you hear about, there are always new tricks that appear which are hard to keep on top of. Try and stay aware of these and keep your staff in the loop also. Millions are lost every year due to scam artists.
- Use RF/RFID tags
RF (Radio Frequency) or RFID (Radio Frequency Identification) should be used in retail stores to combat theft. RF tags would be the more common used security tag used, but both set off security sensors if someone attempts to walk out of the shop with tags still attached to the merchandise.
RFID tags have chips embedded in them. These chips contain information about the product and allow you to track items using their stock control system. RFID enables merchants to locate items and ensure that products are in the right place, at the right time.
- Run a Live-stock system
Have a system in place which enables you to follow the movement of each item of stock at the click of a button. Having control over your stock from arrival to purchase will help eliminate discrepancies and allow them to be identified easily. The use of a Live-Stock system will allow this to run more smoothly.
- Use employee sign-ins
For access to scanners when processing orders or deliveries provide a username and password for each employee individually. Use this system for access to the till EPOS also. This locked system will allow you to see who exactly was involved in each transaction whether front-of-shop or back.
- Know what stock you have on hand
Your stock is your livelihood; it is essential you know exactly what stock you have on hand as there are so many deliveries and sales processed every day. Ensuring you carry out stocktakes as often as you need is essential. Some people chose to complete stocktake quarterly, others bi-annually and for some annually is enough. If you have any concern over stock, our advice is to limit the time between stocktakes, this makes it easier to identify where the problem may lie and what the root cause is.
- Investigate discrepancies
When it arises that there has been a discrepancy it must be looked into! Examine which products are causing issues through stocktaking or analysing a specific department. If these are due to breakages ensure they are recorded and not being accounted for.
The final note here is to remember that everybody in your store is accountable for items missing, stolen and broken. Employees knowing there is an onus on them to have responsibility for any discrepancies that occur under their watch will always be more careful.