Page 207 - DMGT553_RETAIL_STORE_MANAGEMENT

Retail Store Management

Notes Whether or not proper procedures that contain built-in internal controls have been set up
for each transaction or event in the flow of merchandise from the time it is ordered until
it is purchased by your customer. And whether or not these procedures are being followed.
The record keeping system being used. The Retail Inventory Method can help keep losses
down. The fact is that shrinkage declines when it is measured, and the Retail Inventory
Method generally provides the best measurement of shrinkage.

Prevention of Paperwork Errors

Paperwork errors can be controlled by use of a good, well-documented system containing built-
in checks and balances. This is an area in which we have helped many retailers by conducting
internal security checks and developing written procedure manuals. But a good system is not
enough. All employees (receiving clerk, sales people, buyers, office personnel) must be properly
trained. They must be told the importance of following the proper procedures. And, of course,
management must follow up to see that the proper procedures are being followed.

Prevention of Internal Theft

The retail store by its very nature presents many day to day temptations to employees who
handle the merchandise and money of the company. It is the responsibility of managers to
remove as many temptations as possible thereby helping to keep employees honest. This is
done by setting up procedures containing good internal controls and by seeing that these
procedures are followed without exception. For example:
Require management approval on all refunds and credits.

All employee purchases should be rung up and checked by the owner, manager or another
designated person.
Keep strict control over refund authorization slips, sales tickets, gift certificates or any
other types of forms which can be used by an employee to obtain cash or goods.
Know your employees. When hiring new employees make an effort to hire honest
employees. This can be done through interviewing techniques, by carefully checking
references and by the use of carefully developed written honesty tests.

Prevention of Shoplifting

How your merchandise is displayed can have an impact on shoplifting. For example:

Keep small, expensive items behind a counter.
Keep your store neat and uncluttered. Neat displays make it easier for alert salespeople to
spot missing merchandise.

Do not have blind spots on the sales floor. Try to avoid counters that are exceptionally
high.
While the above can act as a deterrent to shoplifting, well-trained and attentive sales personnel
are your best defense. Alert, courteous salespeople can deter many would be shoplifters by their
presence. Make sure they are properly trained so they can spot suspicious behaviour and know
what to do if they see someone taking merchandise. Your local police department may have
information concerning this or may be willing to present a seminar on the prevention and
detection of shoplifting.

202 LOVELY PROFESSIONAL UNIVERSITY