The holiday season is frequently referred to as the most profitable time of the year for retailers – unless you work in a store without loss prevention technology. Because as retail purchases soar, so do shrink and other forms of theft.
According to the 2016 Retail Holiday Season Global Forecast, retailers in the United States incur 37 percent of their annual shrink during the holidays; while retailers in the United Kingdom incur 38 percent of their yearly shrink. Interestingly enough, both U.S. and UK retailers take in roughly 34 percent of their annual sales during the same time.
In Germany, the report shows that the Christmas season brings 46 percent of a retailer’s annual shrink and 34 percent of its annual sales base, while in France, those numbers are 46 percent and 36 percent. These stats show that unethical shoppers’ fingers are indeed sticky this season, and it has nothing to do with Christmas pudding. Same goes for corrupt employees, too.
Here are some reasons behind the uptick in shrink and other forms of theft:
There’s no time like the holidays to take a look at your loss prevention and operational policies or even enforce them if you’ve been lax. For instance, do you require employees to attach security tags on items above a certain dollar amount; and if so, does a manager ensure this is consistently done? Does your workforce know what procedures to follow when a suspected shoplifter wanders around the store? How about your cash-handling processes? Are you sure your cash drawers are being counted at the end of each shift and if so, it this procedure consistent store to store? If the counts are manual, who verifies them?
It might be a good time to ask a third-party to review your daily practices. In fact, some companies offer a free consultation to help you address areas of concern.
Ideally, policies should address matters such as how much cash to keep in the register, what steps to take when overages or shortages occur, and consistently tagging items with anti-theft devices.
Investing in loss prevention technology, such as cash counters and intelligent cash drawers, drives adherence to easy-to-follow cash handling processes. Plus, cash management technology detects and often-times deters theft and other forms of shrink – whether internal or external.
Prime example: A large, multi-store retailer in the United Kingdom tested LiveDrawer during a six-week pilot at one of its problematic stores where employee theft was rampant. Prior to LiveDrawer implementation, the retailer’s cash handling process consisted of managers placing uncounted cash in a safe and waiting for a third-party vendor to pick up and count it every two weeks.
“Some of the employees knew that stealing was easy, so they stole,” said Mark Bernhardt, Group Products Manager for Tellermate. “Once our drawers were placed in the problem store, the theft completely stopped because staff knew it provided visibility for each and every transaction.”
LiveDrawer provides real-time cash counting, giving full visibility of the amount of money in the drawer at any time. It knows how much cash goes in or out of a drawer – down the last penny. It also tracks the time of each transaction and the cashier responsible. LiveDrawer is so smart that it sends an immediate alert when a process is not followed or when an overage or shortage occurs. In short, it makes stealing at the POS virtually impossible.
Viewing each drawer’s amount also allows managers and corporate offices to reduce the vulnerability of cash in the tills because it monitors when lifts and skims are needed. LiveDrawer also pinpoints which cashiers consistently make mistakes; and sends alerts when processes are not followed.
Which brings me back to higher amounts of shrink around the holidays and ways to help decrease it. Automating manual, back-office processes enables your staff to be on the shop floor longer – giving them time to spend with customers. And according to How to Prevent Loss During the Holidays and Beyond, published by specialtyretail.com, the most effective method for deterring theft is “aggressive customer service.” This is where an employee offers to help a customer and stays with that person until he or she leaves the store.
Even a simple “hello” alerts a would-be thief that employees are not too busy to pay attention to who enters the store. Periodic check-ins to see how the customer is doing further prevents shoplifting.
Customer awareness, employee training, consistently following procedures and of course retail automation can help make this Christmas period the most successful retail season yet.
Loss prevention doesn’t really have a season – it’s necessary year-round. There are numerous forms of cash management technology on the market, and deciding which one works best for your business can be tough. We’d like to help by introducing you to each of them: Download the Ebook, The Cash Management Jungle.