As big retail season starts, work to prevent theft by Jimmie Wilkins
The Retail Cost of Theft
Jimmie Wilkins
As we enter the heavy retail season – now is the time to check on your business policies, procedures and to develop a proactive approach to prevent retail crime. As this is a serious and comprehensive problem, I will take a couple of weeks to outline some of the things you can do to minimize the exposure your business has to shoplifters, dishonest employees, and bad checks. But first, it is important to really recognize the impact of the problem.
Retail theft loss estimates vary by type of operations and the efficiency of management. They range, for example, from 1.3% of sales for a well-managed, alert department store to about 7% for the loosely controlled operations. Shoplifting accounts for about one-third of the retail theft, according to one estimate. Dishonest employees and bad checks account for the remaining two-thirds.
It is currently estimated there is a retail theft committed every five seconds in this country. These thefts cost each American $250+ a year. No store is immune. For a small business the cost of even petty thievery is astronomical. A store operating with a 10% profit on sales would have to sell an additional $3285 (or 3650 cards @ $.90) every year to make up for a theft of only one $.90 card per day. If you extrapolate that number for more than one product – well you get the picture.
Faced with such unreasonable selling volumes, most small businesses are forced to raise prices and therefore jeopardize their ability to compete. Or, worse yet, do not recognize the awesome impact of theft, do nothing and lose their business.
While you cannot totally eliminate theft in your business, positive steps can be taken to curb the problem. Ways to control shoplifting, safeguards against employee dishonesty, and protection against bad check passers can be integrated into your business operations. Internal controls are the most effective safeguards but even the best precautions cannot make theft absolutely impossible.
The first step is for you to review any policies you have on any area of crime prevention. Take the time to “clean them up” and make a copy for each employee. Call a special staff meeting to review all safeguards you have about shoplifting, bad checks and overall retail crime.
Set the tone or atmosphere that will encourage honesty in your store. Shoot for excellence of conduct and performance. Because people respect high standards, you should not settle for less. Employees also tend to copy the individuals who set such standards and require that they be met. Adopt a “zero shortage” attitude. And finally, avoid setting a double standard of moral and ethical conduct. When you set rules, have them apply to everyone. You cannot expect employees to set standards that are any higher than you set for yourself.
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