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What has been your store's shrinkage experience for the last two years? What will it be this year? If it has not been as good as it should have been, now is the time to analyze the possible causes and take steps to keep shrinkage in line this year.
WHAT IS SHRINKAGE?
The difference between the perpetual book inventory and the physical inventory count is called shrinkage. The book inventory is a record of what ought to be on hand in view of what has been received Dalvin Tomlinson Limited Jersey , what has been sold and price changes. Physical inventory count is the volume and value of all the goods actually on hand.
CAUSES OF SHRINKAGE
Shortages can and will occur at every point where merchandise changes hands or paperwork is created or processed. Proper systems with built-in controls must be put in place to eliminate or reduce these shortages. While there is not enough room to list all the specific causes of shrinkage, we will give several examples of each of the three general causes: paperwork errors, internal theft and shoplifting.
Paperwork errors can happen almost anywhere in the merchandising cycle. For example:
* Marking goods at a price lower than the retail price recorded on the receiving record.
* Failure to record all markdowns.
* Miscounting physical inventory.
* Clerical errors causing the book inventory to be higher than it should be.
* Timing is of particular importance. When comparing the actual physical inventory count to the perpetual book inventory Evan Engram Limited Jersey , care must be taken to ensure that every invoice representing goods that have been received before the physical inventory count is included in the calculation of book inventory.
While internal theft can be anything from taking merchandise to taking cash or store supplies, we will focus on those instances of internal theft that pertain to merchandise. Some examples are:
* Writing up a cash sales slip for merchandise but destroying the ticket after the customer leaves and pocketing the cash.
* Recording a false cash refund and pocketing the cash.
* Taking merchandise without paying for it.
* Extending unauthorized discounts or credit card refunds for friends.
Shoplifting can occur at any time. Anyone can be a shoplifter; a regular customer who never intended to steal but gave in to temptation and opportunity, or a seasoned professional.