Shrink Your Shrinkage

After a notable rise in 2009, shrinkage appears to be decreasing this year. According to a Global Retail Theft Barometer report, shrinkage among U.S. retailers is down 7% overall from one year ago. The corresponding decrease is 6% overall among retailers in all 42 countries surveyed. Among these were Australia, China, India, Japan, Russia, and the countries of Europe.
     A limitation of the study is that it surveyed only the largest retailers in each country. Small to midsize retailers might have somewhat different patterns of shopper theft, employee theft, and administrative errors—the three components of retail shrinkage.
     Although shrinkage was down overall, it was up over last year for about one out of three retailers. The reason is found in another statistic: Overall, retailers raised their spending on loss prevention programs and physical security about 10% from last year. Those retailers who funded employee training, store audits, and increased protection of theft-prone merchandise saw shrinkage rates drop. Those retailers who didn’t spend the money generally saw rates go up.
     Consider the proven physical security measures you can take to cut shrinkage: Set up mirrors to increase visibility. Post signs sayings that you prosecute all shoplifting, and then do it. Keep high-value items in locked cabinets. Alternate the direction of hangers on clothing near doors.
     But balance shoplifting reduction with providing a welcoming atmosphere. You probably don’t want to have uniformed guards patrolling your aisles. Reduce dependence on physical security measures by using psychology:

• Some customers and employees steal for the thrill. Be vigilant in store areas that generate excitement because of loud rhythmic music, bright colors, and/or fast movement. Merchandise classes associated with the forbidden are especially likely to be stolen: Tobacco products and underwear are among the most frequently shoplifted items.
• Some people steal because affection and attention are missing in their lives. There’s evidence that when you treat all customers with respect, concern, and empathy, people prone to thievery are less likely to steal from you, even when the opportunity is there.
• Some shoplift to show off to friends. Doing it on a dare is most likely among teenagers. Without hassling the teens or prejudging, you’ll want to be alert when a group of teenagers enter the store together. Being alert includes greeting them so they know you know they’re there.

     To shrink your shrinkage, think like a shrink.

Click below for more:
Use Shopper Psychology to Curb Shoplifting
Fight Employee Theft with Expectations
Psych Out Employee Theft