By Trudi Charest
Canadian retailers are losing about $4 billion a year to shrink, which equates to an average estimated loss of $10.8 million per shopping day, according to PwC’s 2012 Canadian Retail Security Survey, completed in conjunction with the Retail Council of Canada (RCC).
Respondents to the survey reported shrink rates of between 0.4% in the low range and 2.19% at the high range of their net sales in 2011, with an average shrink rate of 1.04% of net sales for all respondents.
The two most important categories that contribute to shrinkage in the retail sector are internal theft and external theft. Internal theft accounts for 33.4% of shrinkage and external theft for 43.0% according to the report.
Furthermore, optical retailers are likely suffering three times their share of shrinkage compared to other retailers.
The average shrink rate for the optical retail sector in Canada is believed to be around 3%. Security industry specialist Liz Martinez, author of ‘The Retail Manager’s Guide to Crime and Loss Prevention’, claims that the shrink rate in optical is most likely around 7% and about two thirds of that comes from internal theft.
So what can the average eyecare business do to prevent losses?
Here are some tips for both internal and external theft.
The amount of employee theft and fraud in businesses is alarming.
Putting processes into place help dissuade theft and remove open opportunity for theft:
> Perform background checks and reference checks on job candidates,
> Ensure a clause is in the employee handbook on conviction of any internal theft or fraud,
> Have visible supervisors on every shift ,
> Do regular inventory counts as well as unscheduled inspections and audits of
inventory and bookeeping,
> Don’t keep excess inventory in staff rooms where opportunity is easy,
> Count money daily and record any difference to see patterns,
> Check incoming and outgoing product arrivals and check statements to ensure accurate shipments,
> Have staff meetings about loss prevention including talking about internal theft.
We lose a significant amount of eyewear product to shoplifting. Some of it is our own customers and patients who can’t resist the easy opportunity we have placed in front of them to professional, seasoned gangs who know we are an easy target.
Here are a few tips on what you can do to reduce external theft:
> Nothing beats a shoplifter better than customer service… greet each person who comes into your dispensary and stay with them no matter what. If you have to multitask do it as close to them as possible and don’t leave the area unattended,
> Work in pairs and have someone always visible in the store front,
> Don’t leave holes in the frame boards…always keep them full so it would be very noticeable immediately if something is missing,
> Don’t have displays close to exits and entrances where it is an easy grab and go,
> Keep top, expensive brands in locking bars or locked glass cabinets,
> Install mirrors that allow you and the shoplifter to see they are being watched,
> Buy cameras and put signs out in the dispensary that “we’ re watching” and recording,
> Train staff on loss prevention and to always be watching for signs of theft.
A few small changes and some top level awareness from you and your staff can easily save your eyecare business thousands of lost product every year.
Building an ongoing plan to keep loss prevention a top priority in just smart business.
Trudi Charest is the Co-Founder of 4ECPs, a business resource company for eyecare professionals. 4ECPs has three divisions, jobs – training – marketing.