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 2021 Retail Holiday Season Forecast, retailers will see the strongest growth in more than 20 years, rising 9.0% from last year to $1.147 trillion. But shrink is also at an all-time high. The 2020 National Retail Survey found that shrinkage is accounting for 1.62% of the average retailer’s bottom line. That’s costing the entire industry US$61.7 billion per year.
Usually retailer not only make the most during the holiday season, they also face the highest losses. 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.
This brings me back to the problem of 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. Customer service can also be a tool to deterrent theft. 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.