Loss prevention is key to running any successful retail establishment, especially during trying economic times. There are many ways that your store can experience inventory shrinkage, and some are unavoidable. Circumstances such as vendor fraud or error, damage, or administrative mistakes can contribute to inventory shrinkage. The goal, however, is to minimize these losses to a degree that doesn’t harm profits.
Inventory Shrinkage Causes
Inventory loss is equivalent to money lost. Funds are used to acquire products that disappear and cannot be sold to gain back profit. According to ShipBob.com, the leading causes of inventory loss are:
- Employee theft 42.7%
- Shoplifting/outside theft 35.6%
- Administrative error 15.4%
- Vendor fraud/error 3.7%
- Unknown/other 3.9%
If these losses get out of hand the fiscal impact on the business can be detrimental and can harm the bottom line. Taking appropriate precautions and implementing security measures is crucial for the vitality of your C-Store.
How Quantum Services Helps to Prevent Theft
Any inventory service company can count your stock, however, only Quantum Services has developed proprietary systems and reporting with proven processes that guarantee accuracy, instill confidence, build rapport, provide impartial insights into operations, and support a long-term partnership. We know c-store managers will only act if they trust the accuracy of an audit. And action is what is needed to reduce losses and increase profits.
Our thorough quality control measures are tailored to the c-store industry and its distinct inventory needs. During audits, a store is broken down into small sections to help us identify concerns and recount if needed. We check audit accuracy keystroke by keystroke, so errors are detected, and auditing behavior is tracked, helping to prevent theft or further loss. From category comparisons and exception reports to retail comparative analysis and special item comparative analysis, our reports highlight areas of concern so action can be taken swiftly.
There is an 83% correlation between shrink and how well-managed a store is. Our inventory auditors not only count merchandise but also conduct a thorough, unbiased assessment of your store operations.
Internal Controls to Reduce Inventory Shrinkage
Some additional precautions can be taken internally to help reduce shrinkage and prevent theft:
- Divide responsibilities among employees to ensure processes (ordering, recording, reconciling, etc.) are not controlled by one individual employee.
- Educate Employees on inventory shrinkage and prevention tactics
- Install and monitor video surveillance and CCTV signage in your stores
- Keep your store properly organized and place products strategically in your stores for optimal surveillance
Outsourcing your Inventory audits is a smart and effective way to track and reduce inventory shrinkage. Our trusted team of inventory managers and auditors will work with you to identify your store’s needs, areas of concern, and provide detailed and accurate data to help you secure your store and boost your profits. Visit our website to learn more about our processes and contact us to start a conversation.