Inventory shrinkage, or shrink, occurs when the number of products you have in stock is less than the amount recorded on the inventory list. This discrepancy can be due to clerical errors, goods being damaged or lost, or theft. According to a recent study called the Sensormatic Global Shrink Index, shrink cost retailers nearly $100 billion globally in the year 2017 — 1.85 percent of total sales across retail stores in the U.S.
Interestingly, the most significant percentage of losses was due to external theft or shoplifting, including organized retail crime — accounting for 35.55 percent of annual shrinkage. The second-highest percentage of losses occurred due to internal shrinkage, which includes employee theft, which accounted for 24.54 percent of annual shrinkage in the same study.
While the winter months account for 46 percent of annual retail theft, 81 percent percent of these thefts occur between Black Friday and Christmas Eve. Even if the holiday season is a while away, it’s important to become familiar with theft prevention methods so you’re confident when it’s time to take action.
Considering the fact that shoplifting and employee theft make up over 60 percent of estimated annual shrinkage, it’s shocking that security cameras (or CCTV systems) are only the fifth most popular loss prevention investment. While Electronic Article Surveillance (1st), alarm monitoring (2nd), access control (3rd), and exception-based reporting (4th) are important loss prevention techniques, it’s important to emphasize that if you want to catch people stealing, you’re going to want to get it on video. Let’s talk about why security is an integral loss control investment.
Preventing Retail Theft
Professionally installed security cameras in your retail store provides a dual-threat to shoplifters. Not only are security cameras known to reduce the rate of robberies by over 50%, but they also allow you to keep an eye on all angles of your store simultaneously and provide evidence of shoplifting if you aren’t able to prevent the initial theft in time.
Professional installation is important because camera selection, placement, and installation are three of the most crucial factors when it comes to capturing usable video, preventing theft, and catching the potential thieves from all necessary angles.
If you’re a security professional looking for advice, or if you’re considering a DIY security solution, we do have some additional tips:
- Don’t hide your cameras. When thieves know they’re being watched, they’re less likely to steal from your business.
- Post warning signs (WARNING: Security Cameras In Use) in areas with higher-priced items, at entrances and exits, and inside your fitting rooms. While cameras are not allowed in fitting rooms, you should have cameras just outside the entrance to changing rooms and have the feed monitored whenever possible.
- Don’t make compromises when it comes to the quality and capabilities of your security cameras. Be discerning about which brand you choose, some security companies use misleading marketing techniques to mislead you into buying a subpar security system.
- Implementing security cameras is an important loss prevention technique, but they can’t do the job alone. Consider security cameras as your final line of defense when locks, RFID tags, employee training, and other loss prevention tactics fail.
For more tips on security cameras, their functions, and applications consider reading Different types of Security Cameras and when to use them. Or continue reading more on preventing shrinkage below.
Preventing Employee Theft
The second leading cause of inventory shrinkage is internal employee theft – a shocking 24.54 percent of all loss. Employee theft can be anything from taking a product from the sales floor to taking office supplies from their desk or taking a few dollars from the cash drawer.
As much as you’d like to trust every employee, the sad fact is employee theft can and will occur. Although it is best not to cross a line when it comes to the privacy of your employees, it’s important to monitor them along with customers. Some of the best practices for reducing employee theft include:
- Use security cameras to monitor all points of sale to prevent theft from the cash register — and provide evidence of theft if your numbers don’t line up.
- Install cameras where high-value items are stored — including in the storage room or warehouse.
- Install access control systems for your storage room, security room, and anywhere else expensive items or sensitive material are stored. After all, what good is capturing your employee stealing on video if they can just delete the footage?
- Install security cameras where employees clock in to prevent payroll fraud. According to Forbes, payroll fraud occurs in 27 percent of all businesses.
- Give employees a way to anonymously report theft. Although nobody wants to be a tattle-tale, most people don’t like working in an environment where their colleagues are engaging in illegal behavior. Provide a way to anonymously share any theft, scamming, or suspicious behavior as it allows employees to come forward who may otherwise hesitate to share incriminating information about a fellow employee.
Install your cameras ASAP
Are you considering holding off on installing security cameras until the busy season? It’s important to familiarize yourself with all of the ins and outs of your new security system before an incident occurs.
By knowing what your cameras can do and how to properly operate your security system, your business will be all the more secure. Here are some good reasons to install a security system as soon as possible:
- You may decide you need additional coverage in specific areas.
- You may opt for a PTZ, WDR, or infrared camera to capture footage under any conditions.
- You may decide you need to purchase additional storage in order to keep your recordings for a longer period of time.
Invest in Loss Prevention Today
Inventory loss can have a significant negative impact on your business — and installing professional-grade security cameras with access control is one of the most effective loss prevention methods.
Are you looking for a company that can help you select a security system, provide a free one-hour site visit, and installs professional-grade security cameras within your budget?
Our security camera experts help you find the right system for your business – helping reduce the opportunity for inventory loss. Our free one-hour site visit and consultation gives you the perfect opportunity to discuss your security concerns with our camera security experts. We review your budget and site plan and discuss your storage needs to provide you with the best options to meet your security needs.
Camera Security Now has over two decades of experience. Our experienced security camera technicians can help you decide which security cameras are best for your unique application, and explain why. On top of that, our technicians will install your security camera system with the latest techniques available to the security industry. Once your system is installed, we will walk you through every step of the way when it comes to finding footage, recording and trimming video, exporting files, and everything in between. If any issues arise in the future with your cameras, we are a phone call or remote-view away.
To contact Johnny and Camera Security Now directly over the phone, call 800-440-1662 or fill out a fast, easy online quote form.
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