While your business can experience retail shrinkage due to different reasons, improper cash management takes the first spot as a primary cause. It is harder to determine where your finances are leaking when you are not monitoring the cash flow closely.
Better monitoring facilitates better stock-taking of your money, and you can effectively discover key problems and minimize them or their impacts. Here are five tips on how you can start reducing shrinkage in your retail business.
1. Increase Employee Accountability
All workers must work together as a team, having your back when addressing retail shrinkage. It calls for accountability, meaning employees must know and adhere to the rules or face the consequences. In short, the measure informs everyone that they are responsible for their actions.
Nevertheless, you can improve accountability using new tech. For instance, you can use tracking technology to know who handles the cash, when, and how much. In addition, you can use a smart safe that records how many times a personalized code has been used to access it, making it easier to follow up on employee activities and hold them accountable.
Away from technology, implementing exemplary practices also helps improve employee accountability. Lead by example, portraying exemplary leadership that creates a conducive environment that can lead to lower turnovers and reduce retail shrinkage.
2. Train Staff on Security Policies and Procedures
Employee training plays an essential role in reducing shrinkage in your retail business. It can help you identify those who are not playing by the rules. Training establishes a platform upon which you can hold everyone to the same standard, allowing you to pinpoint workers who fail to follow protocols.
Teach your team how to spot and prevent shoplifting and report such instances (even if it is suspicious activities). A crash course on shoplifting prevention goes a long way in curbing such activity in your business.
Implement the same measures for your back-office operations. Train the staff on their duties, dealing with unethical behavior, and the subsequent consequences. In short, you want them to know and abide by the rules.
3. Consider the Store Layout
The shrinkage might emanate from a poor store layout. Your workplace might have blocked aisles or high-shelving units, making it harder to monitor people moving through different sections of your store. It can facilitate dishonest behavior from your staff or customers.
Similarly, such a layout is a reason for concern, mainly when employees handle money on a busy floor. Locating them in secure, secluded, quiet, easy-to-monitor areas is best.
4. Promote A Loss Prevention Culture
Loss prevention can be curbed more effectively when everyone works together. Encourage your team to be concerned about external and internal shrinkage. Start by informing the staff about how shrinkage impacts everyone, not just your retail operation.
You are in an industry with slim margins, and losses can lead to someone losing their job, lest the business goes under. Hence, effective loss prevention measures will ensure your business stays afloat, which is suitable for everyone.
5. Automate the Cash Management
The technology is a worthwhile investment for your business if you want to reduce retail shrinkage effectively. The cash management tech minimizes direct physical contact between your employees and the money. So, it improves security and enhances the daily operations of your business and returns management. You can find a tech solution to help you improve the speed and accuracy of counting, sorting, or storing money, thereby protecting your assets.
