Shrinkage in a retail business reduces profits and is often a sign of shoplifting or employee theft.
The results of significant shrinkage in the retail industry lead to a reduction in the workforce, reduced hours and higher prices for customers.
When trying to figure out how to improve retail sales via shrinkage reduction, review expenditures first.
It may not be a simple case of retail theft; it could be an issue of procedural and systemic failure.
Security Alarm Systems
Security alarm systems help retail stores reduce inventory shrinkage.
Although it may just be one garment, it is still a loss that costs the store money.
A security alarm system that ties into either scanning barcodes as customers leave or by detecting electronic tags is a good place to start.
Automatic Inventory Counting Systems
Automatic inventory counting systems take items out of inventory as soon as the bar codes are scanned through the point of sale system.
What this does is helps with inventory control and will immediately reflect shrinkage from improper discounts, missing items and damaged items.
Damaged items can be sent back to the manufacturer for replacement or credit, reducing shrinkage.
Retail Loss Prevention Methods
Profit loss in the retail industry is very detrimental to a store.
The costs of running a store are rather high, from the cost of utilities, rent, merchandise, advertising, payroll and a variety of other expenses.
Retail loss prevention methods need to be put in place. This includes coded entry and exit doors, security cameras and scanning devices near the exits.
Reducing shrinkage is something that retail store owners need to take time to implement.
What retailers have to realize is that a small amount of shrinkage is going to happen and there are a variety of ways to help fix it.
For instance, a loss of £100 means that you will be forced to send each employee home one hour early for a day during a given week, reducing labor.
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In this fiercely competitive retail environment, the tiniest of things can make an enormous difference to your sales and profit margin.
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