Importance Of Inventory Control-How Out Of control Are Profits Without Inventory Control?

 Out of control spending may be okay for the federal government (Let’s be frank 20+ trillion of debt seems pretty out of control to most of us) but as a store owner or manager out of control expenses will bury your company. I am sure that you are looking carefully at where you spend your cash, reviewing controllable reports and monthly expenses. What you may not be considering is how operating a store without inventory controls in place can be negatively impacting the profits of your store. 

     When I talk about inventory controls I am not simply referring to activities on inventory night, I am talking about everything the store does all year to control merchandise. For example, the store I work for receives their pallets of freight several times a week. Included in these pallets are sealed plastic shipping boxes that hold individual pieces of merchandise. Some of these boxes have different colored seals and colored seals are indicators that the merchandise inside is high value/high theft goods requiring strict controls. The merchandise in these boxes requires security devices or immediate lock-up. When I was a Loss Prevention Manager for another company we had a lock-up cage we staged at the trailer receiving door. As specific high-risk merchandise came off of the trailer that product immediately went into the cage. That merchandise had to get to its department following a very specific path and if I observed any deviation from that path I was investigating the issue. The store where my daughter works requires all jewelry shipments be taken immediately to the jewelry counter, counted against the invoice and stocked. Jewelry is not allowed to sit out until it is convenient to secure it. Having a detailed plan for identifying high-risk products, verifying counts against invoices right away and immediately securing it are smart steps in preventing inventory shortage from getting out of control. 

     Electronic article surveillance (EAS) systems are another key piece of a sound inventory control strategy. When I mentioned securing products above it does not necessarily mean that merchandise has to go into a lock-up case. Most merchandise can be protected against theft with EAS labels, hard tags, wraps and other protective devices (for example Sensormatic has a product called Flexible Safers that can hold items and still give EAS protection). There are some things that a display case is appropriate to display merchandise in such as high-end jewelry. By the same token, there are EAS products suitable for costume and less valuable jewelry. Inventory control of such pieces of merchandise means tagging these items by a team of trusted employees before they are on the sales floor and accessible by other employees or shoppers. An EAS system also includes the installation of towers at all points of entrance and exit. A common error on the part of many retailers is the failure to place towers near vendor doors and employee-only entry doors. Failing to protect these doorways is a misstep in recognizing the reality of employee theft and the impact it has on store profitability. 

     Inventory control also takes place in in-store training programs. Teaching employees how the customer service they provide helps prevent shoplifting plays a part in inventory control. Training front end supervisors and cashiers how to properly handle EAS alarm activations determines how much merchandise you may or may not recover from potential thieves. Even the proper training of specialists who show merchandise from lock-up showcases impacts the potential for a crook to steal. How many pieces of jewelry should be out of a case to show a customer at any time? One, two, or three items? You have to teach your team what you expect and how someone may try to trick them while they are showing merchandise. 

     Inventory control is a year-round effort. It encompasses more than locking up merchandise or preparing for an annual inventory. Inventory control requires an in-depth look at where losses can take place, how they occur and who may be causing the losses. Once you do that you can implement solutions to the problem by creating a comprehensive shortage prevention strategy. Do that and you keep from losing control over your store profit line.  

Proper EAS Tagging Tips For Retailers

There’s no question about it electronic article surveillance (EAS) retail anti-theft devices work in every store they are used in. In fact they are so effective that according to the Sensormatic Global Retail Shrink Index, EAS is the most popular Loss Prevention and Asset Protection investment among retailers in the United States. 92.16% of retailers surveyed indicated they are investing in electronic article surveillance (pg. 45). Is it enough that EAS tags are used or is there more to making them an effective tool? 

     In order to get the most out of an electronic article surveillance system tags retailers should ensure they have effective tagging guidelines in place. It may not seem like it would make a big difference at first glance but the reality is a proper tagging program can make a theft prevention program stronger. Here is are some suggestions to consider as a guideline of where you should tag your merchandise: 

  • Keep visibility in mind. While hiding tags may seem like a good idea at first it can cause some problems for the retailer rather than a thief. Hidden hard tags may not be seen by a cashier and removed when a piece of clothing is purchased. That can cause an unnecessary EAS tower alarm and an embarrassing moment for your patron. A similar problem can occur with an EAS label if it is hidden. It may not deactivate properly at the point of sale and cause a false alarm. 
  • Location of tags is important to prevent concealment by a shoplifter. If a pair of pants is protected with a hard tag on the waistline it is not difficult to untuck a shirt and hide it. Keeping the placement where the tags are hard to cover improves the deterrent effect of the devices. 
  • Another thing to avoid is placing soft tags or labels on manufacturer hang tags if possible. I encourage retailers to place labels directly on merchandise packaging. For example a Sensormatic label is difficult to remove from a box of razor blades but if it is on a hang tag on a shirt sleeve a crook can pop the hang tag off and the label goes with it.  

So what do I suggest when it comes to tag placement? Here a few suggestions that I have found to be effective: 

  • When tagging pant or slacks a hard tag can be pinned through a seam near the knee. If that is a bit more work than you want to do, the next best solution would be a couple of inches above the cuff. Both solutions make it difficult to hide the tag and if the location is consistent on every pair of pants cahiers will be accustomed to looking for hard tags in the same place every time. 
  • If your store sells shoes people are going to want to try them on. I suggest tagging them through an eyelet. If there is no place to that a hard tag can be attached the next best solution would be a label on the bottom of the shoe. Tag both shoes as an extra precaution against shoplifting. 
  • Shirts should be tagged near the front of the neckline. The next best option would be the cuff of the shirt sleeve. The point is to keep the tags in as visible a location as possible. The problem with a cuff versus a neckline is that a cuff can be upturned and a tag hidden. Also when a tag is placed too close to the end of a cuff it is easier to make a small cut in the garment to remove a tag and repair it with a stitch or two. 
  •  Purses can be protected with a hard tag. If you are tagging purses the key to doing so efficiently and reducing customer distractions is to tag them as closely as possible to one place for all bags. Wallets may have an EAS label hidden inside because they are more difficult to tag with a hard tag. If this is the case for your store make sure cashiers are all aware of this and carefully placing the merchandise on the deactivation pads at checkout. 

These are the most common items of clothing and softlines merchandise to be protected. Hopefully the message you are reading is that the consistency of a tagging program is what matters. Do it properly and you will have minimal false alarms and customer distractions and the alarms that do go off will be real attempts to steal. When supervisors and employees respond to real alarms and fewer false alarms they will be more thorough in their receipt checks. That will result in more recovered dollars and less shortage for you. 

Advantages of AM over RF EAS Systems

Have you ever found yourself in a situation where you have to make a decision on a purchase and you have to determine what is going to be best for your situation? I know that car shopping is one of those purchases where I have to take multiple factors into consideration and it isn’t always just about cost. I have to be able to accommodate at least 5 adults and perhaps even 6 if my mother-in-law is included in a ride. I need to get decent gas mileage because I never know who may have to use it and all of our work so I don’t want to fill it every day. I need dependability, I’ve had too many vehicle break-downs and I don’t want a breakdown on my wife if I can help it. Before I make a purchase I search customer reviews of vehicles and automotive expert ratings on websites such as Edmunds or Kelly Blue Book. The vehicle has to meet my requirements or I have to pass on it regardless of how good the deal may appear to be. The same thing can be true for a retailer when determining the best Electronic Article Surveillance (EAS) System and tags to use to combat theft related shortage.

     There are two choices that a store owner will have when deciding on an EAS system, a radio frequency (rf) system or an acousto-magnetic (am) system. But how do you choose? What are the advantages of one over the other?

RF Tags:

  • RF tags (labels) are easier to deactivate at the point of sale. These tags can be passed over a deactivation pad and the tags will not cause an alarm when the merchandise is carried out the doors.
  • RF label deactivation pads are less expensive to operate since the pad only “activates” when a label passes over it. The AM deactivation pad continually runs and uses more power (Wikipedia)
  • RF labels tend to be a bit less expensive to purchase than AM tags.
  • RF labels have made improvements over the years. Small, clear labels have been developed that can be placed on smaller packages without concealing as much important information. Wikipedia does state that small RF tags do cause problems with consistency in deactivation. This can be a cause for false alarms that can hinder the effectiveness of EAS systems.

AM Tags:

  • The highest detection rate in the industry.
  • The standard AM label has a smaller footprint than the standard RF label.
  • Based on their design AM tags have less interference from outside the detection band frequency they operate on.
  • These tags and labels have a greater detection range than RF labels.
  • Where RF labels may be affected by foils, metals, and liquids, AM labels are less susceptible to making them more effective against booster devices. (“Genuine Sensormatic Labels”, Tyco White Paper)
  • Where a metal shopping cart may interfere with the detection performance of an RF label the same shopping carts have no effect on AM tags and labels.

As you can see for yourself there are advantages to both types of systems and tags. The question is going to be which is the best fit for you?  We have worked with both systems and are a nationwide sensormatic dealer and we have worked with both types of technology extensively.

     From a Loss Prevention perspective, the biggest concerns involve professional shoplifters who use devices to try to circumvent a store EAS system and false alarms. Knowing that foiled lined bags and clothing can disrupt RF systems and having apprehended shoplifters using these devices I would tend to favor the AM tags. False alarms can be annoying to customers and have a negative impact on shopper attitudes and RF systems do tend to have a higher rate of false alarm problems. Whether a store manager chooses the RF system or the AM system the most important part is to make sure a system is purchased. It is a proven method of theft deterrence and shortage reduction.


Sensormatic & Loss Prevention Systems Join Forces

We are excited to announce our partnership with Johnson Controls/Sensormatic. Sensormatic is one of the oldest and largest Electronic Article Surveillance (EAS) manufactures in the world. Loss Prevention Systems has deep loss prevention and EAS experience.

We are offering the entire Sensormatic line of Acousto Magnetic (AM) products to our customers. We will still carry RF products such as hard tags, labels and high theft product protection. Acousto Magnetic systems by Sensormatic give us solutions to fix a number of issues that traditional RF cannot handle. This includes labels applied directly to metal and systems that can handle wider door widths.

Do you have a single doorway, double doorway or a mall entrance? Sensormatic can cover it. Tired of shoplifters taking merchandise into your restrooms and concealing it? We can fix that problem also. From an EAS standpoint, there is not much we cannot do. Challenge the Loss Prevention Systems team to design a system to fit your needs and budget.

Loss Prevention Systems’ choice of Sensormatic is also based on the quality of the systems. Sensormatic systems are extremely robust. They include features such as low power consumption, door frame and hidden systems that keep the Retailers’ storefront looking neat and clean while protecting your merchandise 24/7.

Pricing is also a factor. Sensormatic line of systems will fit a wide range of budgets depending on the features you select. We also have people counting, and data reporting. This gives the Retailer important intelligence on customer traffic and flow. We have seen many of our customer’s significantly reduce expenses in both payroll and operating costs by having this data. Store hours can be adjusted and you can adjust staffing to fit the real world.

Want more? How about having your Sensormatic EAS systems online and monitored at all times? This allows us to know if the system has been turned off or if it has maintenance or other issues. We then notify you. You no longer have to solely rely on your staff to discover that the system has an issue sometimes days or weeks later. By that time shoplifters have had a party on your dime.

On top of this Loss Prevention Systems now has a free shipping program for the purchase and installation of a Sensormatic system. One more way we are saving you money.

A typical Sensormatic system can be installed in one day. This minimizes the interruption in your store.

Of course, Loss Prevention Systems still provides free, live loss prevention training to our customers for the life of your EAS system. We will conduct any of our live sessions as often as you reasonably need them. Staff turnover? Promotions? Changes in product lines? Our training sessions include the following.  

     

We include so many other services that Loss Prevention Systems can be your one stop shop for loss prevention support. So experience our award-winning service and support. Our goal is to keep your hard earned money on your bottom line, not the shoplifters.