As a loss prevention leader, you’re certainly familiar with all the main terms surrounding inventory security. And if there are other employees working in your store’s loss prevention division, they probably know these terms as well. But members of the LP team aren’t the only team members who need to be up on their inventory security lingo: There are certain key terms that all other store employees need to know as well.
“All store employees need to be up on certain inventory security terms.”
That’s because when it comes to inventory security, it represents a group effort. When dealing with a store whose inventory security knowledge is limited to only a few individuals, what happens if those people aren’t around and a shrink-causing incident occurs? Having staff members who know what they’re doing in terms of inventory management and security can help eliminate this kind of scenario.
To get store employees up to par in terms of inventory management and security jargon, we’ve decided to put together a list of some of the key terms. For store employees, knowing these terms and how they fit into a business’s broader asset protection plan is vital for playing a necessary role in limiting incidents that compromise security:
Shrinkage: In the retail sector, it’s imperative to keep track of items from when they’re received to the moment they leave a store with a paying customer. Shrinkage refers to item losses in the time period between the point of receiving and the point of sale. If employees notice a discrepancy between the number of items delivered to the store and the number of items that are on the shelf, this is a common situation that reveals shrink. Shrink can also be discovered at other points in the lifecycle of a product, such as damages or product expirations.
Shrink encompasses more than theft alone. While it’s true that theft incidents constitute a large part of shrink causation, there are other things that also cause shrink, including administrative/paperwork errors and vendor fraud/error. For retail stores, shrink figures are far from insignificant, with the average retailer reporting a shrink percentage of 1.22 in 2014.
One key reason why shrink numbers are so high, as National Retail Security Survey (NRSS) lead study author Dr. Richard Hollinger explained, is because shoplifting groups are growing in sophistication, with “gangs of thieves … using a lot of skills … [and] doing investigations prior to the thefts.” This is all the more reason to have store employees know what shrink is, how it occurs and how to prevent it.
Shrink is the difference between what is supposed to be in the store according to the inventory management system, and what is actually in the store.
RFID: Radio-frequency identification is a system that offers multiple functionalities, including EAS (electronic article surveillance as outlined below) as well as for providing increased inventory visibility, throughout your entire supply chain. When it comes to loss prevention, RFID is a great technology to harness because it allows for highly robust tag monitoring via readers that are either handheld or mounted for hands-free operation. RFID technology also offers stores significant data benefits, since information can be more quickly accessed using the technology. This makes RFID a vital part of overall supply chain management as well.
EAS: Electronic article surveillance is the primary technology used by stores to limit instances of shoplifting and drive down overall shrink. According to experts, the deployment of EAS technology can drive down theft by 60 percent or higher. The way EAS works is through a system of tags that interact with specially designed gates or overheads. If a tag isn’t removed by a store employee, the gate/overhead will detect this and trigger an alarm. In this way, shoplifters can be caught in the act. Beyond that, however, the presence of tags and gates/overheads present thieves with a strong deterrent to commit a crime in the first place, since good EAS systems are highly reliable.
RF Systems: Radio frequency systems are so named because they rely on electromagnetic – aka radio wave frequencies. In terms of inventory management and security, this technology can be centrally helpful in keeping thieves out of your stores. One prime example of RF technology in action is CONTROLTEK’s first-rate pedestals (the i30 and i45), which provide a seamless presence in any store environment.
As Dr. Hollinger pointed out, today’s retail climate is one in which loss prevention professionals have to contend with far more sophisticated criminals who work in well-planned groups to get away with theft. To deal with threats like these, stores need to mount equally sophisticated defensive strategies. Here at CONTROLTEK, we’ve built a powerful line of inventory security products that provide stores with cutting-edge security solutions that can help to significantly limit store losses. But for stores to drive down shrink even more, it helps to have all staffers on the same page, and teaching them the fundamentals of Shrink, RFID and EAS is a great place to start.