Shrink is the unexplained losses in inventory. Surprisingly, close to 90% of shrink are associated to theft from employees, vendors and/or customers. By decreasing shrink, business can become more profitable. There are methods to reduce the headache and bring the losses to a minimum.
For businesses, shrink amount should not be more than 2.5%, but there are cases in which shrink accounts for 7% of the inventory losses. Shockingly, most of the shrink are generated from employee’s thievery. This tends to appall most of the employers. Yet, if an opportunity arises, most employees would steal.
Here are some reasons that may contribute to an increasing amount of shrink:
- Overstocked quantity of inventory. If there are too many inventory, the workers are sometimes lead to believe that products will be overlooked which can conclude to employees stealing.
- Fast foods have a tendency to have a much higher shrink count. Many staffs and customers indulge in the food and drinks without paying for the products resulting in loses.
- Shortage of full-times employees. Many part-time employees lack the appropriate outlook and devotion that is sometimes found in a full-time employees.
- Lack of proper training can lead to mishandling and result in unnecessary damages.
- Improper pricing on merchandises. If the products are poorly marked or inaccurately marked, can lead to shrink.
- Outside vendors. If outside vendors that are not correctly checked by a qualified member may consequently cause shrink.
- Robbery occurrences. Businesses can lose more or less depending on the amount of cash a robber steals. However, experts speculate that most robberies are inside jobs fabricated by deceitful personnel within the businesses.
Businesses and employers can better shelter themselves and diminish the amount of shrink by following proper protocol. Firstly, establish risk factors. Secondly, monitor trend sheets. Lastly, clearly state that there is awareness of employee’s thieveries.