In part 1 I discussed the way Sensormatic systems can assist store owners in reducing operational shortage. We have also looked at how they can curb or reduce vendor related merchandise shrinkage. As we finish out this series I want to discuss a few other operational issues that contribute to shortage. It is important to remember that operational shortage is a separate concern from efforts to stop shoplifting and internal theft. These are errors and mistakes in processing and handling merchandise that can be just as costly as theft but may not get the same level of attention as theft does. The reason for this series is that in the past week I have encountered each situation. I have also had to deal with the resulting customer service issues brought about by each problem.
This past week I was assisting a customer in finding tabbed dividers for his child who was preparing for school. The customer found a package he wanted and as he started to place it in his shopping cart I noted that the packaging looked a bit unusual. I asked if I could look at it more closely and he permitted me to do so. It turned out it was a multi-pack of the dividers still in the clear, shipping cellophane wrap. There were approximately 8-10 individual packs still wrapped and could have been unintentionally rung up as a single unit if I had not caught it. In other words rather than selling 8 or 10 packages at roughly $3.00 each (a total of $24-$30) we could have theoretically sold all 8 or 10 units for $3.00. That would have been bad enough. To make matters worse, there were about 10 such packages that had not been properly processed when the merchandise was stocked. Assuming there were 10 units in a package multiplied by 10 packages, the shortage could have been almost $270! Some people are thinking that this would not have happened and the error would have been caught quickly before all of the packages could have been sold. That is not necessarily so. There are people who look for stocking errors and purposely take advantage of them. My customer was not entirely happy about the catch I made but he said he understood. No, it is not the same as trying to stop shoplifting but not addressing these problems can be just as costly if not more so.
Since we are on the topic of operational issues that cannot be prevented by a Sensormatic system let’s discuss compactor security. Does your store have a compactor? If not, how about an outside dumpster? Who is responsible for tossing trash in your business? Do employees throw out their own boxes, packaging, etc.? Does your store keep a lock on the compactor if you have one? If it is locked, do you limit who throws away the garbage and does anyone inspect what is being tossed? As a former Loss Prevention Manager I was actively involved in the operational integrity of the store. I ensured our managers were in compliance with company policies regarding compactor security because the risk of shortage due to carelessness was that great. I would conduct audits of boxes and trash that were waiting to be tossed and I would find merchandise that was overlooked during the freight flow process. There were times I would find merchandise that was to be thrown out for vendor credits and some items had not been processed through reverse logistics. I was reminded of this source of shortage when my daughter, an area manager for another retailer was telling me how an employee had left several boxes of shoes in a box by their compactor waiting for a manager to throw it out. Had she not been careful about what she was throwing in they would have incurred shortage in shoes. It also would have made the store short of that shoe size and affected potential sales had a customer wanted them and they weren’t available. Managers don’t need to stop shoplifting in order to save shortage from happening.
A Sensormatic system can make a huge difference in shortage for store owners willing to invest in them. They are a serious deterrent to shoplifters and dishonest employees and they will identify attempted efforts to steal. They can also curb some operational shortage, though not all of it. That is why it is important to contact Loss Prevention Systems, Inc. for a consultation on how to prevent theft, fraud and shortage for a thorough review of your shrink risks. You will be surprised at how much you can save by spending on Loss Prevention.
Sensormatic systems are important and we can help you with it. Call 1.770.426.0547 and let’s talk.