Shrinkage is a big problem in the retail industry. Companies lose millions of pounds each year due to inventory problems, damage and - especially - theft. According to the latest Retail Crime Survey from the British Retail Consortium (BRC), businesses in the UK lost £603 million due to retail crime in 2013-14.
With figures like this, it is not surprising that stores are taking drastic measures to reduce shrinkage. However, it is important that companies are smart about this, taking well-thought-out steps rather than resorting to actions that harm the business and its employees.
An example of this has come to light recently, after a judge in the US ruled that Apple has to defend a class-action lawsuit filed against it by more than 12,400 Apple Store employees in California. The issue brought to the court was Apple's policy of thoroughly searching its workers before they left the premises each day.
This was obviously done to prevent employee theft, and it seems like it would be a thorough option. However, this is far from the most efficient way to prevent this type of shrinkage, or shrinkage in general, as can be seen from US District Judge William Alsup's ruling.
This stated that Apple employees often had to spend as much as 20 minutes after work waiting around to be searched. Considering that employee theft only accounts for six per cent of UK retail theft by value, this would not be a very effective use of British businesses' time.
This time was 'off the clock', so the employees were not paid for it. This has led to another problem with this method: the class action lawsuit that Apple is currently facing. However, the alternative would be to pay employees for this, which would end up costing the company a significant amount.
So what are the alternatives? Searching employees is not out of the question, but it does not need to be as thorough as Apple's policy. The Judge's ruling revealed that employees had to "open every bag, brief case, backpack, purse, etc" they had with them. They then had to unzip all zippers and compartments, remove "any type of item that Apple may sell" and verify its serial number against a log.
Instead, it would be better to keep your store under a good level of surveillance, so you can track your workers and make sure they are not stealing anything. Video analytics technology can be used to verify that an employee is counting out the right amount of money at the tills, for example, or send you an alert if the contents of your stockroom do not match your inventory.
This is a much better option both for employee morale and effectiveness. Your business should have good security systems installed anyway, so you might as well get the most use out of them. Using these devices sensibly can save your managers time and keep your employees from stealing from you without the need for restrictive search policies.