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jewellery retail

Ways to effectively deal with shrinkage in Jewellery Retail Business

Shrinkage is not a new problem to jewellery retailers, but since last few years they have witnessed a significant rise into it and in the losses incurred due to shrinkage. For a retailer it is important to grasp this problem in the bud, but is it preventable? Or is it an inevitable part of sale which can’t be controlled?

It’s important to implement steps to prevent shrinkage even before it starts. And that is the reason why you should be on your toes while supervising your store. You can take use of tools or your staff. But before getting in depth to avoid this chronic issue, you need to study the reasons for shrinkage.

Theft/Shoplifting

Shoplifting is the theft of merchandise done from store during business hours. It is one of the most widespread problem faced by retailers for inventory loss.

You can avoid this by following stages:

1. Identify the tell-tale signs of shoplifters – It’s important to train yourself and your employee about the signs displayed by shoplifters. To catch them, stay alert for people who try to:

  • Avoid eye contact
  • Seem to spend more time looking at other staff members than the products
  • Have a tendency to go out without purchasing anything
  • Come with extra bulky clothes on body
  • Cover the face with sunglasses or scarves to not get caught on camera
  • Enter with a group

2. Ask your staff to offer help to people in store – Train your employees to receive customers by telling them they will be nearby to offer help. This step will deter the shoplifters against the theft.

3. Clean store – If you will keep your store organized the chances of you getting to know about the misplaced goods is pretty high. It may be possible you can’t keep tab on all the items, but keep valuable item at angle of eyesight so they will be visible to you all the time.

4. Fix security tools – Install video surveillance system, which will help you to know about the crowd and their action. Foot traffic sensors joined with inventory and POS software solution will enable you to notice differences in the inventory. So you can take desired action.

Return Scam

No retailers likes to deal with return but it is a part of business. There will always be people who will want to return and you should always put your best foot forward to convert them into loyal customers. But it’s important to differentiate genuine returns from the fake ones. Because return policies are important for running store you can’t be too uptight about not having one, as you may lose some genuine customer. But you can’t let people play with your business.
You need to implement policies as per your criteria which suits you best.

Below are few practices which you can consider:

1. Request for receipt – You can ask your customers to show you receipt of the purchase, for their return. This will help to avoid taking in stolen goods.

2. Request for ID – It may be possible that you have faced return on a very large scale. To curb this issue implement a step of making customer profile and assign them IDs. So you can verify from your database about the frequency of return and take required steps to prevent it.

3. Highlight your return policies– Present your policies in such a manner that it is visible to customers from start. For instance you can show it on receipt or have a board with policies written on it.

4. Install fraud detection tools– It may be possible that keeping a tab on consumer’s profile for return frequency will be time consuming, so you can take help from third party logistics. There are companies which provide services of handling customer profiles and providing required information like return frequency, cost of product, purchase history, etc. This will enable you to keep a tab on suspicious activities.

Scope of employee stealing from you

You did everything possible to prevent theft from outside. But what about inside theft? The following points should be suffice to help you.

1. Improve hiring process – The impact dishonest employees make is experienced by retailer later, i.e. during the time of inventory. Because employee theft is not easily catchable one needs to be highly cautious while hiring people. Set some standards for recruitment and hire accordingly. You should run background checks to check character, contact references for confirmation, and be in depth during interview.

2. Create a friendly environment– The happier are your employees, the more are chances of them following ethical behavior. Create an approachable atmosphere so people can communicate freely, promote fair-minded service practices and provide positive support to your staff.

3. Audits – There is high chance that if you conduct inspection on regular basis you will get to know about the discrepancies in the inventory. You may even conduct surprise inspection sometimes, so you can catch the fraudster off-guard. This will keep cheats in control because they will be under pressure of getting caught.

Merchant Scam

Sometimes vendors also cheat. This may be not as common as other factors but we can’t ignore this point.

Below are some steps by which you can avoid this:

1. Have complete papers –One of the basic step, but definitely handy. Try to have all your agreements on paper for future references, and log all deliveries details too. For instance- shipment received time, quantity, person doing delivery, person who accepted the order, etc.

2. Assign skilled staff to accept deliveries – This will enable to know the discrepancies in the shipment because your employee will be well-acquainted with the product and other required details.

3. Less deliveries at a time – This will help to avoid chaos at the time of delivery and will help you to stay focused.

NR Doshi

NR Doshi