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ASK THE EXPERT: March 2015

The Shoplifting Customer

“Our inventory shrinkage number is growing, and I suspect it’s largely from shoplifters. Once we suspect someone of shoplifting, what’s the right protocol especially if the suspected shoplifter is also a good customer?”

Signed, Sick of Shrink

Dear SOS,
I have often said I learned much more from my mistakes than I did from my successes.

In your case, while inventory shrink is mentally and fiscally painful, the good news is you realize you have a problem and seem focused on addressing it. Your issue, however, is much greater than simply dealing with your customer who may have sticky hands. To this end, in chronological order, I have three recommendations for you.

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  1. First, be sure to get your facts straight. I would conduct a little more research in trying to narrow down the cause(s) of your inventory shrink. Having once personally experienced an almost 3% YE shrink number, I can assure you the cause is likely more than shoplifting.
  2. Once you have identified the major causes of your shrink, discuss with your staff the remedies that can be quickly implemented that will address these areas of weakness. Simply recognizing that people do what’s inspected, not expected should go a long way to reducing much of your shrink. Your management team must be disciplined and relentless in tackling this problem. Take no prisoners!
  3. Lastly, what to do about your good customer, possibly with sticky hands? In this case, unlike the above remedies, I’d recommend a bit of diplomacy. If successful, you will be able to help address your shrink issue while maintaining the business with your customer.

I would recommend a one-on-one with your customer in the privacy of your office. I’d confide with him/her, businessperson to businessperson, the fact that your inventory shrink level is such that your business’s profitability, and future, is threatened. Given that he/she is a significant and likely frequent customer, ask for their assistance in helping to identify areas of your business that you could shore up. At worst, he/she will be on notice that this is something you and your staff are shining a light on and, if guilty, cause them to change their ways. At best, he/ she may appreciate the fact that you have confided in them, enlisted their support and, in addition to changing their ways, become an even better customer. In light of the significant cost of customer acquisition, it’s worth a try.

Have a question for “Ask the Expert”? Send it to Rick@LBMJournal.com.

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