For retailers, the risk of inventory shrinkage has increased noticeably over the past couple of years.
Inflation may be one reason. Another is staffing. Labor shortages are prompting many retailers to implement self-checkout solutions or even lower their hiring standards. Both these options increase the risk of theft, either by shoppers or employees.
Retailers report inventory shrinkage as high as 3 percent of revenue. Technology that meaningfully reduces fraud and theft can quickly pay for itself. Here are three types of transactions that are prone to loss, and the solutions that can aid store personnel in identifying and reducing it.
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1. Checkout Errors
Some checkout errors are intentional. It’s common enough for employees to give their friends perks like free drinks or to misuse their employee discounts. The industry has a term for it: “sweethearting.” Some are unintentional, like when a cashier simply misses an item.
Either way, advancements in artificial intelligence and video allow loss prevention teams to compare the number of items visible in a video to the number of items in the point-of-sale transaction and automatically flag transactions that raise concerns.
2. Scan Avoidance at Self-Checkout
I recently saw an eye-popping statistic: 20 percent of shoppers admit they have not paid for all their items at self-checkout at least once.
The ability to instantly identify transactions of concern can help stores make informed decisions that reduce shrinkage. For example, a retailer might realize that most of these scan avoidance situations occur after 8 pm That retailer may want to add additional staff near the self-checkout area or close self-checkout after that time.
DISCOVER: How retailers are offering customers a more modernized checkout experience.
3. Transactions Without Customers
When a transaction occurs and a customer is not present, that’s a red flag. Transaction voids followed by the cashier taking money out of the till, product returns with no customer present and fraudulent gift card activations are all examples of potential areas of shrinkage. These issues are difficult to catch, but now that cameras can understand the world they see and tie video to a transaction to be easily reviewed, the game is changing.
FINDE UD AF: How retailers use advanced technology to improve supply chain problems.