Preventing Inventory Theft

January 5, 2022

With some studies estimating that employee theft accounts for over 75% of inventory shrinkage, safeguarding your inventory could mean big savings for your business. Here are some tips for protecting your inventory from both inside and outside threats.

Tips to Protect Your Inventory

• Hire with care. In this season of labor shortages, it may be tempting to hire any person who’s willing to work. But conducting a background check may be beneficial as part of your overall interviewing process.
• Restrict access. Ensure that only authorized individuals are allowed to handle inventory. Keep high-value products and tools in a warehouse security cage and provide keys to supervisors only. Consider locked cabinets for exceptionally expensive items.
• Detach departments. If feasible, keep receiving, warehousing, and shipping functions independent. The purchasing department should not be involved in accounts receivable or the receipt of merchandise. By maintaining a discrete distance between accounting and inventory-handling functions, you’ll reduce the risk of theft.
• Implement consistent anti-theft policies. Such guidelines might include prohibitions against taking backpacks into merchandise areas or duplication of access keys. Require unique login IDs for access to inventory control systems so you can track transactions by user.
• Check and recheck. In addition to your annual inventory count, spot-check inventory and merchandise throughout the year against purchase orders, shipping receipts, packing lists, and online inventory records.
• Install security cameras. If you suspect inventory theft may be an issue, consider installing cameras in employee and customer areas, including stock and break rooms. Periodically review video footage. Let employees know that the cameras are active and being monitored.