When your retail store closes for the day, does some of your merchandise walk out the back door? “Shrinkage” generally occurs when employees, customers or vendors steal inventory. However, it can also happen when employees make honest errors, or when inventory is damaged, spoiled or becomes obsolete. Whatever the cause, retail owners and managers can take steps to identify the sources of discrepancies and prevent financial losses, especially those tied to backdoor theft. 8 prevention tips According to the National Retail Federation, retail shrinkage accounts for approximately 1.6% of sales and employees are responsible for about 29% of that amount. But businesses with lax internal controls can suffer even greater losses. Here are eight recommendations to deter employees from stealing inventory: 1. Perform regular cycle counts. A cycle...

Maybe the numbers didn’t add up during your company’s recent inventory count. You know that most inventory discrepancies are the result of honest mistakes, such as when employees return items to the wrong shelves or customer returns are flubbed. It’s even possible that you’ve made a mistake and need to perform a recount. But if you suspect something more sinister — such as employee theft — don’t hesitate to call in reinforcements. A forensic accountant can assist in getting the goods on inventory theft.  Where the clues are  When fraud experts can’t find “innocent” explanations for missing inventory, they look at the business’s culture and environment. Poor controls over purchasing, receiving and cash disbursement puts companies at higher risk of employee theft. And if one person performs...