Cures for Holiday Shrinkage
The amount of shrinkage that stores experience during the holiday shopping season is enough to make the most seasoned retailer green around the gills. Fortunately, there are some simple techniques that managers and executives can put into place immediately to combat shrink. Many of them cost little or nothing at all and require only a minimal amount of time.
1) Employee Hiring and Training:
Don't be tempted to pin a nametag onto the first warm body that fills out an employment application. The more desperate you are to hire workers, the higher the risk that you will be burned by bringing on dishonest ones. Take the time to do at least a basic criminal records check and phone three of the applicant's references. Also, have at least one other person interview the prospective employee. Two heads are better than one, and one manager might pick up clues that another one misses.
Invest an hour in instructing employees about shoplifting techniques and appropriate employee responses. Invite store security, mall security or local police to speak briefly about correct procedures for apprehending, detaining and questioning suspected shoplifters -- and the different rules that apply to adults and juveniles. Also, stress that excellent customer service and employee teamwork are the keys to thwarting shoplifters. Incentive bonuses are also a good idea.
Set a "zero-tolerance" policy, and make sure that every employee understands that any illegal shenanigans will lead to immediate termination and prosecution. Period. No exceptions.
2) Smart Layout:
Smaller retailers may have more freedom than chain stores to vary the layout of the stores, but the most successful managers are aggressive about following basic security policies.
Keep high-priced items locked up, and assign a proportionate number of employees to those areas so that sales aren't lost by customers leaving in frustration over not being able to access the products.
The cash registers belong in the front, near the doors, so that shoppers have to pass them in order to leave. Placing the registers in the back invites shoplifters to mosey out of the store with unpaid-for merchandise.
In many chain stores, the visual people trump the security force. If that is the case, pointing out the impact that increased shrink could have on everyone's job, salary and bonus is often enough to get the designers to make small changes that can have large effects. If visual displays are placed so that they could have a negative effect on shrinkage, such as when a designer insists on hanging a Santa Claus decoration where it blocks a CCTV camera, a little reason may lead to a compromise that is in everyone's best interest.
3) Anti-Shoplifting Tactics:
Employees are always the first line of defense against shoplifting. Train them well and insist that they provide excellent customer service.
If you don't have a CCTV system, now is the time to get a good one. If the store really can't afford to make the investment, put up fake cameras, or augment some real cameras with fake ones. But -- and this is a big but -- the fake cameras must look real, otherwise, they're worse than useless and may even serve as an invitation to thieves.
Increase the number of uniformed security guards as well as plainclothes floorwalkers who patrol the store. If you don't have any on staff, contract with an agency to provide them, but don't try to bargain for the absolute lowest rate, because you'll get what you pay for. Make sure that the guards who work in your store are presentable and well-trained, not unkempt superhero-wannabes who work cheap because this is the only job they could get.
Keeping the Rule of 33 in mind, it is clear that paying for security is actually a way to increase profits by decreasing shrink. (Consider the cost of one $100 item stolen per hour because of a lack of security personnel. Security officers cost much less than that.) Security is an investment that will pay off in higher returns, not an act of throwing money down a black hole.
Make it known through posters and by word-of-mouth that every shoplifter is prosecuted. Period. No exceptions.
Try a variation on the overseas technique of posting cardboard cutouts of security officers in different places in the store. Dress mannequins in uniform or post photos of police officers or security officers around the store. Change the location of these deterrents daily. Incredibly, people react to these images in the same way they would to the presence of real officers, as long as their locations are varied constantly.