Theft vs. Errors—How to Make Sense of Your “Shrink” Data to Improve Employee Training and Effectiveness

Retail shrink comes in many forms, some product sneaks out the front door, some out the back door. In fact, employee theft is often counted as one of the major contributors to shrink. While this bears a large impact on overall shrink, many times what is missed or mis-construed is shrink caused by employee errors.

Integration With POS

Tracking and documenting shrink from error can be a challenging task, but today’s sophisticated video surveillance systems when integrated with POS systems, can provide important data and feedback when errors might be mis-construed as theft. Having transactional data married with video is critical in evaluating what actually happened when an improperly trained employee encounters a situation that falls outside the norm. Just as important as having data and video linked is the ability to quickly search and identify the suspect transactions among the thousands of proper customer interactions. This type of analytic system must be intelligent enough to work from a database of Key Indicators to weed out the transactions to be reviewed and present the evidence quickly in an easily consumable format.

Resource Management

Retailers should look to deploy a POS system that can detect a transaction series that may indicate theft or fraud, and also flags those transactions that are potential training issues. Improperly trained cashiers may incorrectly discount an item or simply void the transaction and comp the customer out of frustration when they’re unable to quickly complete a sale for an impatient customer. Yes, mis-rings are a popular method for unscrupulous employees to “sweetheart” product to friends and family, but these may also simply be the result of insufficient training. Determining the difference can be a daunting task, given the hundreds of thousands of line-item transactions a typical retailer is dealing with on a weekly or even daily basis.

Sorting all this out and retraining when needed can save the retailer a lot of money—as every retailer knows, it’s much more costly to remove and replace an employee than to retrain them. Using intelligent retail analytics systems can help a retailer determine when it’s time to retrain versus when it’s time for an employee to go.