An online Inventory management software can be great for many essential tasks in running an ecommerce business. It automates the transfer of data, keeps inventory quantity levels accurate and can mitigate the risk of overselling a popular item. But did you also know that it’s a great tool for internal theft prevention?
Discussing the potential of your employees engaging in criminal activity may feel a bit taboo. No one wants to assume the possibility that their employees are stealing from them, either by shoplifting physical products or directly pocketing funds. Yet according to the National Retail Federation (NRF), employee theft accounts for roughly 44% of all inventory loss for retailers in the United States. That equates to $15 billion in losses annually – a number far too high to ignore.
When polled about internal theft issues, store owners who use different types of software reported varying levels of concern. A report conducted by Software Advice, a firm that researches inventory management software, found that 11.76% of those who manually track moving inventory, stated that employee theft was a significant problem. And 15.38% of store owners who only use accounting software to manage their sales reported concern. Conversely, business owners who employ an inventory management software report fewer concerns. Only 8.21% of stores using inventory management systems say that employee theft is a significant issue.
Why does inventory management software seem to reduce the likelihood of internal theft among stores? Unlike security cameras or other methods of theft prevention, inventory management does not have blind spots and is up and running, 24/7. For those with a brick and mortar presence in addition to their ecommerce sales channels, an inventory system that offers POS technology will track in-store sales as they are made, and update inventory levels on all sales platforms. Even if an employee managed to safely remove the security tag from a product and take it from your inventory stock pile, an inventory management system would show inconsistencies between what you should have in stock versus what is physically there.
Merchants who use inventory management software display lower numbers of employee admission of theft. 15% of employees whose companies use inventory management admit to stealing, as opposed to 35% whose employer only uses accounting software to track inventory (like QuickBooks). Because an inventory management system automatically updates and initiates data transfer immediately after a sale, there is less room for human error. Numbers don’t lie – and with an inventory management system that always displays true stock levels, it’s easier to discover discrepancies, and harder for employees to get away with theft.
Ideally, theft prevention systems occur in the background and do not interfere with an employee’s daily tasks. Kim Warne, director of marketing at Tyco Retail Solutions (leading technology in theft deterrence) shared with Software Advice that retailers “don’t want an over-engineered solution.” The best loss prevention solutions should not “diminish the customer experience – or make employees’ jobs harder.” Inventory management systems operate automatically and without constant supervision, and thereby maintain a watchful eye on moving product without disrupting the employee, customer or supervisor experience. And given that it’s designated task is to manage inventory, hence only monitoring theft indirectly, employees won’t feel unjustly targeted for suspicion of theft. Your employees will feel empowered to make the right decision on their own, and you will be equipped with the proper tools to detect foul play, just in case.
Obviously, we hope employee theft never becomes an issue for you, but employing a quality inventory management software can decrease your overall risk, as well as help you propel your business to greater success. To get started with an inventory management system designed for small and mid-sized businesses to scale and compete online, sign up for a free trial with ecomdash today.