Retail industry is overcrowded and highly competitive market. Right from mom and pop stores in your neighbourhood to retail giants like Wal-Mart, and Target’s of the world are reeling under the pressures from increased online shopping, real estate costs, technology spend etc. While the magnitude of these challenges may vary based on size and segment, the underlying fact of bottom line taking a hit remains same across.
While the external factors might be difficult to reign in what smart retailers can do is to fix their house. One of the key challenges that is giving retailers sleepless nights is Pilferage and Wastage(If it is Food & beverage retailer). If this article on open source to be believed, US businesses are losing $60 Billion annually to retail shrinkage and vast majority of this is attributed to retail theft. In India, while there are no studies done which are authoritative in this space, it is believed that retailers write-off anywhere between 3-5% of sales under Pilferage! In some peculiar cases, cashier might have pocketed lakhs of money by deleting a few bills every day. So, let us see what kind of thefts happen and how to mitigate the same. I would categorize them into 2 types.
1. Customer theft
2. Employee theft
Customer theft: Shoplifting amounts to one of the major pilferages, in US, it is around 38% and it is proportionately at higher side in India too. How do we mitigate this menace? Ignorance of theft is more dangerous that actual theft as former leads to continuous thefts. So, I would put the solutions into 2 buckets.
· Prevention methods
· Verification methods
Prevention: Preventive methods are taken to ensure the theft does not occur in first place. There are several ways ranging from costly alternatives like Cameras, door scanners or facial recognition s/w to low-cost ways like smartly organizing stock which is likely to get shoplifted to signages placed in aisles, keeping a watch on movement of customers by employees.
Verification: However, you may try, there will always be smart guys who might over smart and still steal the stock. In that case, knowing that theft happened is very much important to take the action. How will you know that? This is where a sophisticated Inventory management software will help. Make sure in-store stock is captured rightly in the software and all items are bar-coded and do a stock check with PDA device at the end of the day and verify the remaining stock in software with stock captured by PDA. In this way, you can check if theft happened and take appropriate steps.
There is a saying in Telugu, my mother tongue, roughly translated as “If the thief is from your own house/family then even Lord Shiva cannot find who it is”. Same goes in your store, if you do not have right software that records all transactions that happen within store, it will be a cakewalk for them to find a way to steal the stock or cash. While there is NO plan which eliminate employee theft 100%, let me limit my thoughts to what happens at POS and how a good POS software can mitigate theft. At POS, few common methods of stealing is, deleting items in a bill or deleting bills in a session or marking items as ‘return’ and pocketing that money or taking money from drawer for petty expenses and over quoting it etc.
Wastage: This is more inclined towards food & beverages businesses such as restaurants, QSR, Bakery etc where final products are produced at the location by using various ingredients. In this process, lot of ingredients gets wasted in the production. To control this, one should have good ‘Recipe management’ system that will have the quantity of ingredients to be used for making an item. Your software should give the reports at the end of the day how many items are sold and ingredients used for and any discrepancies identified. In this way, food business owners can rein in food wastage!
A good POS software should allow store owners to provide access levels based on roles of employees. For example, cashier does not need access for adding or editing stock, he needs access only for sales transactions, marking returns and close off register. Also, it should enable session management based on cashier shift. In case of petty cash, it should have an option to enter every penny in the software so that retailer can check the records. In nutshell, software should capture every single action that happens at POS to have complete control over business.