Shrinkage haunts retailers everywhere. Specialty retailers face the constant challenge of keeping inventory up-to-date and as recorded. Theft may be the number one concern, but errors at the cash register and during shipping can also affect final counts. One of the best ways to help control losses due to inventory shrinkage is an all-in-one point of sale (POS) system. With the right POS system, inbuilt security features, real-time inventory tracking and easy reporting for reconciliation and analysis business owners can take control of shrinkage and push losses on a downward trend.
One of the leading causes of inventory shrinkage is employee theft. Theft in a brick and mortar store does not always mean people physically carrying products out of the store. Scams can happen at the register, during a time of customer service and in the warehouse. Some of the most common types include:
The right POS system can help minimize or eliminate some of these issues. While shoplifting is still responsible for the bulk of inventory shrinkage at 38 percent, employee theft comes in a close second at 34.5 percent, according to the National Retail Security Survey of 2015. Another study puts employee theft ahead of shoplifting at a massive 42.9 percent in the United States. Setting security permissions within a POS can make many of the most common theft opportunities vanish. Adding a secondary verification step for voids, discounts, coupons and returns, is another simple way to make stealing easier to catch.
The faster businesses notice a missing product, the easier it is to determine the cause of its absence. Reconciling counts at the end of each day does not have to be a nightmare. For example, a clothing inventory POS should have all style SKUs and a list of available sizes. When counts update in real time, management can use best practices for inventory control to catch missing stock. If the specialty retail sales and inventory system lists unavailable products as on hand, management can instantly begin tracking procedures.
An integrated POS system allows management to run reports during normal business operations. Rapid access to business intelligence reports for physical inventory enables regular reconciliation and inventory analysis. Purchasing fraud can be caught almost instantly with careful attention to product tallies and shipping and receiving reports. Purchasing fraud schemes come in several iterations, including:
Reconciling orders allows management to see what comes in versus outgoing payments. It can also catch fake sale orders. To kill kickbacks, a little comparison shopping will quickly show standard prices.
With better security, faster tracking and real-time retail inventory management and access to in-depth reports, retail stores can stop worrying about internal loss and focus efforts on dropping shrinkage from shoplifting. Product losses wracked up a $44 billion price tag in 2014. Specialty retail sales reported an average of 1.22 percent lost, which can add up to an impressive total by the end of the year. Installing a retail POS system with inventory tracking could cut that number by more than a third, making POS installation an easy equation.