Honey I Shrunk the Inventory
Some Sobering Statistics
Let’s begin with answering a question. What is shrinkage?
Hold your snickers, Seinfeld fans. In this case, we are talking about inventory loss. Shrinkage has many causes from poor record keeping, loss and damage to the focus of this particular blog post – theft.
According to the 2018 National Retail Security Survey, retailers had 1.33% shrinkage when compared to sales.
The average cost of an incident was $559.
While those facts aren’t encouraging, here’s one that is: Security cameras discourage theft.
Do Cameras Help?
It’s easier to understand why cameras would discourage theft. When people know they are being watched or that they are likely to be caught, they are less likely to engage in a behavior that will cause them trouble, assuming the benefits don’t outweigh the risk.
For this reason, just the presence of a camera can reduce theft.
That being said, don’t coast on common sense. Here’s a link to a range of studies that have shown the positive effects of surveillance on crime reduction.
Side note: Sometimes being watched by yourself is enough to deter theft. It’s a well known psychological phenomenon that when people see their own reflection while considering doing something immoral, they are less likely to follow through. So while it may not be as effective in catching a thief, a mirror is another simple tool to add to your loss reduction plan. Disclaimer: RCI does not sell mirrors. However, we do have monitors available to go with surveillance systems and they have a similar effect.
Why Cameras Help
1 out of 35 employees steal from their employers.
The bright side of that is that in the last few years shrinkage from employees has been displaced by shoplifting as the major contributor to shrinkage at 41% of loss.
With the recent trend changing, it’s nice to know that employees are no longer the largest cause of shrinkage in a company. But that doesn’t mean they’re an insignificant factor. At 33.2 percent of inventory shrink in 2017, internal theft is still the second largest contributor to loss of inventory.
While it can be hard to look at people you work with that way, it pays to be prepared. Further, cameras protect honest people from being accused of doing something they didn’t.
Over 35% if shrinkage is caused by shoplifting and other theft. The average cost per incident went down slightly between the 2017 and 2018 retail surveys but is on a general upward trend.
Shoplifting in particular can be discouraged by visible cameras. More organized theft be best prevented through a higher quality camera, intelligently installed as career criminals may know the difference between a camera that will be able distinguish a face and one that will just be able to establish that the thief appeared to be a bipedal humanoid.
I mentioned earlier that the average shrinkage for a business is 1.33%. That may not sound like a lot but think of it this way: When businesses start, they frequently don’t make a profit. Most small businesses make between 5 and 20 percent profit according to Thinking Bigger.
So that means that that 1.33 % is somewhere between 20 and 5 percent of your profit. That’s a lot to lose!
Meanwhile a small camera system for a small business is generally going to cost you less the shrinkage or in a typical year. When you bring leasing into the picture and divide your cost, it doesn’t make sense not to have a surveillance system.
How Cameras Helped
Finally, here’s a happy story of an RCI customer who’s cameras aided in the return of something more precious than what’s lost in a typical theft.
A few years ago, one of RCI’s clients, the Roanoke Valley SPCA had someone steal a cat from the shelter. The would be cat thief didn’t must not have realized she was on camera but partly as a result of the work we’d done, Frack was returned to the shelter and is as far as we know, currently living in a happy home.
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