Retail Shrinkage Management Practice -Inventory Control, Employee Theft, Shop Lifting

April 6, 2012 - PRLog -- Retailers are facing increased pressure on their profits from the high cost associated with shrink, which cost them $107.3 billion globally* in 2010. Not only does shrink erode retailers’ profits margins by as much as nearly 40%, it also wreaks havoc on shelf availability and inventory accuracy. And as industry research has shown, if customers can’t find the product they’re seeking at one store, they often buy it at a competitor's store or web site.

Sources of loss/shrink

The objective is to maximize profits through reducing inventory shrinkage, essentially the value of missing inventory. According to the 2006 National Retail Security Survey, retail operations suffered an average annual inventory shrinkage percentage of 1.57% in 2006.[1] According to the survey, shrink is divided into 5 categories:
a.   46.8% from employee theft,
b.   31.6% from shoplifting
c.   14.4% from administrative error
d.   3.75% from vendor error
e.   2.86% from unknown error
Although most retailers experience a shrink percentage of less than 2%, some smaller retailers often experience monthly and annual average shrinkage percentages as high as 20%

As you can see from the chart, there are 2 major retail shrinkage categories, internal fraud and customer fraud.

Customer driven shrinkage can be reduced by having EAS (electronic article surveillance). You can easily see the EAS antenna at retail store gateway.
Internal shrinkage can be controlled by Point of Sale systems (inventory control system) and Robust System’s Keykode TransKeeper will pick up suspicious POS activities which is triggered by user defined security filters and put them on operator’s desk with video, audio and POS activities for verification. (http://robustsystem.com/14-Keykode-Transkeeper.aspx)

1.   EAS(Electronic Article Surveillance)
a.   Today’s top retailers understand that a key element in the battle against shrink is a robust, accurate Electronic Article Surveillance (EAS) system – powerful enough to deter shoplifters and organized thieves, but simple enough for store employees to use effectively.
b.   Why Checkpoint? Two reasons: experience and dedication. Checkpoint has 40 years of experience in RF technology; our RF-EAS systems are powerful and precise in the fight against shrink, and our advanced, energy-saving ECO electronicscan add significantly to our customers' bottom lines. We are also the only company dedicated exclusively to the retail loss prevention industry, and our EAS solutions work in concert with our other products and services to provide a holistic approach to shrink management.

2.   Microsoft Retail Management System

From the start, Microsoft Dynamics RMS Store Operations delivers tools that retail blockbusters use—customer purchase histories, electronic receipts, gift certificate tracking, and more. And as your business grows, you can add new lanes or stores with minimal disruptions to retail service—your solution offers a common point-of-sale platform that spans single or multiple store locations. Start with basic point-of-sale functionality, then tap into a broad set of retail management tools, or add the Microsoft Dynamics RMS Headquarters module as you add new locations and move to centralized operations.

3.   Keykode TransKeeper

a.   Business  operator  wants to know every single transaction happening at the register. However it is almost impossible to go over POS activities and recorded CCTV surveillance. If they still want to do it, it could take one or more employees’ full time job.
b.   TransKeeper  verifies  every transaction with User Defined Security Flag and put those suspicious transactions on your desk. For your convenience, TransKeeper presents POS activities, Video and Audio on one screen.
c.   After your verification, you can report each transaction as FRAUD, DISCARD, MISTAKE with detail note (you can also add or modify report type)
d.   Features of TransKeeper
i.   Unlimitted number of User Defined Security Flag
ii.   Real-time register fraud detection (Live monitoring)
iii.   Reduce pos auditing process time
iv.   Video, audio and POS activities can be used for employee training purpose
v.   Fight Back credit card fraud
vi.   Centralized Loss Prevention Operation through TransKeeper HQ
vii.   SMS & Email alerts
viii.   Audio alerts for multi tasking
ix.   Compatible with Microsoft RMS

for more information visit (http://robustsystem.com/14-Keykode-Transkeeper.aspx)

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