As a former business adviser, I found that one of the biggest issues in the retail world is that most stores, in an attempt to cut costs, will understaff their sales floor at the cost of loss prevention. Few companies ever take the time to step back and realize that by placing one more person on the sales floor, they might be able to significantly raise profits by reducing theft.
1.) Theft Commonality
If you were to talk about when most theft happens to a loss prevention expert, chances are good that he or she will tell you that most retail theft happens when workers are busy with other guests. Trust me on this one, as I have talked to many over the years.
A common trick that retail thieves will use is that they will wait for the worker, or workers, to become busy with other customers. Once this occurs, the thieves will strike. By overstaffing the sales floor, though, a retail store causes the thieves to wait longer, and gives the employees more time, and more eyes, to pick up on the signs of a potential thief.
2.) Observance
I want to expand on a point that I made in the last paragraph. By over staffing a retail sales floor, a company has more people looking out for potential thieves. Remember that four eyes can pick up on a lot more than two, and six eyes can pick up on a lot more than four. Overstaffing the sales floor is the key.
3.) The Assumptions
In the following example, I am going to assume that your retail company only hold loss prevention insurance in the form of break-in insurance. This is the most common and the least expensive. This would mean that any theft that happens outside of a hold-up or a break-in would have to be eaten by the company.
I am also going to assume that you pay your employees $8.00 an hour. While it is not a lot of money, it is close to what the national average is for a retail worker ($8.35) and I don't have to use a lot of decimal math. I am also going to assume that overstaffing the sales floor is not something that you presently do.
4.) The Math
For the sake of argument, let's say that you sell GPS devices. If the GPS is valued at $200, that is the same amount as if you had a worker in the store for 25 hours a week. Isn't protecting a $200 loss worth giving a dozen more hours and overstaffing your sales floor?
Maybe you do not sell GPS devices, but you sell sweaters. You might find that you have fifty $25 sweaters stolen in a quarter one year. That comes out to a loss of $1,250. It is the same amount that you might have paid if you had some work 13 hours a week for each of the twelve weeks of the quarter. Overstaffing of your sales floor might have ultimately cut your loss.
5.) The Add-On Sales
One of the keys of retail is add-on sales. While a restaurant might make a lot of money off of the burgers, it can make even more after the waitress asks, "You want fries with that?" So to in retail when we add on all of the accessories to clothing or electronics purchases.
If someone steals something from you, and it happens to be the last one in stock, or the last one in that particular size, you have actually lost add-on sales as well. If I walk into a store to buy a PS3, chances are good that I am also going to buy an extra controller, and a few games. If the last one in stock was stolen, the store lost my extra add-on sales as well. Over staffing the sales floor might have prevented this.
If you are an owner who is against overstaffing the sales floor, take a look at your recent inventory reports. See how many hours of work equal out to the same as your theft losses. Can you still tell me that it was not worth it to over staff your sales floor for at least part of that time?
1.) Theft Commonality
If you were to talk about when most theft happens to a loss prevention expert, chances are good that he or she will tell you that most retail theft happens when workers are busy with other guests. Trust me on this one, as I have talked to many over the years.
A common trick that retail thieves will use is that they will wait for the worker, or workers, to become busy with other customers. Once this occurs, the thieves will strike. By overstaffing the sales floor, though, a retail store causes the thieves to wait longer, and gives the employees more time, and more eyes, to pick up on the signs of a potential thief.
2.) Observance
I want to expand on a point that I made in the last paragraph. By over staffing a retail sales floor, a company has more people looking out for potential thieves. Remember that four eyes can pick up on a lot more than two, and six eyes can pick up on a lot more than four. Overstaffing the sales floor is the key.
3.) The Assumptions
In the following example, I am going to assume that your retail company only hold loss prevention insurance in the form of break-in insurance. This is the most common and the least expensive. This would mean that any theft that happens outside of a hold-up or a break-in would have to be eaten by the company.
I am also going to assume that you pay your employees $8.00 an hour. While it is not a lot of money, it is close to what the national average is for a retail worker ($8.35) and I don't have to use a lot of decimal math. I am also going to assume that overstaffing the sales floor is not something that you presently do.
4.) The Math
For the sake of argument, let's say that you sell GPS devices. If the GPS is valued at $200, that is the same amount as if you had a worker in the store for 25 hours a week. Isn't protecting a $200 loss worth giving a dozen more hours and overstaffing your sales floor?
Maybe you do not sell GPS devices, but you sell sweaters. You might find that you have fifty $25 sweaters stolen in a quarter one year. That comes out to a loss of $1,250. It is the same amount that you might have paid if you had some work 13 hours a week for each of the twelve weeks of the quarter. Overstaffing of your sales floor might have ultimately cut your loss.
5.) The Add-On Sales
One of the keys of retail is add-on sales. While a restaurant might make a lot of money off of the burgers, it can make even more after the waitress asks, "You want fries with that?" So to in retail when we add on all of the accessories to clothing or electronics purchases.
If someone steals something from you, and it happens to be the last one in stock, or the last one in that particular size, you have actually lost add-on sales as well. If I walk into a store to buy a PS3, chances are good that I am also going to buy an extra controller, and a few games. If the last one in stock was stolen, the store lost my extra add-on sales as well. Over staffing the sales floor might have prevented this.
If you are an owner who is against overstaffing the sales floor, take a look at your recent inventory reports. See how many hours of work equal out to the same as your theft losses. Can you still tell me that it was not worth it to over staff your sales floor for at least part of that time?
