Retail surgery: Which errors by store staff should we focus on to try and improve our shrinkage rates?

Employee errors in pricing, accounting and receiving make up an estimated 18% of all retail shrinkage, according to security consultant and Richards International Group chief executive Romeo Richards.

He has produced a White Paper on the subject of reducing employee errors and says that the main causes of employee errors are “lapses in policies and procedures, inadequate or non-existent training and a lack of structural approach to the problem by top management”.

On the sales floor this does not just mean incorrect pricing but other errors, such as product damaged during replenishment, poor product rotation or using store inventory for operating supplies. In addition, sales assistants may accept counterfeit money, mis-identify products, or misunderstand sales promotions.

As well as training all staff with standardised procedures he recommends random cashier audits and test purchases. “Test purchases are designed to challenge cashiers with potential tricky orders they may face in the future,” he explains, saying product knowledge, coupons and sales of restricted products can all be checked this way.

Finally, he says store staff need to understand that loss prevention is about more than the till balancing or preventing shoplifting. “Teaching employees the importance of inventory control and reporting any incidents of damage or suspected theft will assist a great deal in inventory accuracy and ultimately reduce shrinkage.”