How to stop shrinkage effectively

Anyone who has ever worked in retail will tell you that one of the biggest problems they have experienced is shrinkage. This is the loss of stock through theft and shoplifting. It is very expensive, and it can be the difference between running a thriving, profitable business and loss-making operation. Obviously being able to eliminate shrinkage is not the only thing that stands to make a business profitable, there are plenty of other things that contribute to running a successful retail operation, but an effective stock loss plan is vital. So, what can be done to curtail this insidious problem? Here are a few tips and ideas.

Eyes on the ground

This might sound like an obvious thing to say, but you always need to have a security guard present on the premises. You, or your manager, cannot see everything that happens, and you need eyes out there making sure that everything is as it is meant to be. Ideally, you need more than one guard, perhaps even an undercover one, who walks the floor watching the browsers and looking for potential thieves. And make sure that if you do hire a guard that it is not a deadbeat type. The security of your stock, staff, and premises is vital, so get a trained and qualified guard in to look after it properly.


Not always a popular thing but remarkably effective. Make it plain to all staff who join the team that they will be required to undergo a polygraph test from time-to-time. These tests are surprisingly cost-effective to administer and the results, while not admissible in a court of law, are very good indicators of what is going on at your store. You are not on a witch hunt and trying to solve all the crimes that have ever been committed. Explain to your people that once a month they will be asked if they have ever stolen from the company. If they are able to answer that question truthfully and pass the test, then they have nothing to worry about and neither do you – you can rest safely knowing that your staff is not stealing from you behind your back.

Carrot, not stick

Security is often viewed as more stick than carrot. Guards and polygraphs etc are both solutions that are based on fear rather than an incentive. So, look to bring some incentive to the mix as well. Stocktaking is a common feature for most businesses, and it happens regularly at most retailers. Let your staff know that they stand to be rewarded a bonus is stock-take results show that shrinkage is in an acceptable range. This is something that you can target and reward accordingly. What it means is that there is an extra incentive for your staff to keep their eyes peeled to spot shoplifters. If they are helping the security and actively patrolling the aisles looking for criminal elements, then you cannot fail but to curtail shrinkage – and if your staff can help you to do that then you will all win together.




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