Shopaholics & Kleptomaniacs

India being branded as a nation of shoplifters is something which no one would be proud of, except for the news channels. The survey which was conducted by Britain's Centre of Retail Research observed that the shrinkage rate is 3.2%, the least being that of Taiwan at 0.89%. It would interesting to understand the methodology adopted to arrive at these figures.

Indian retailers have comprehensive standard operating procedures in place for inventory reconcilliation, but it has been observed that some of the SOPs are not followed dilligently. This could be one of the reason for high shrinkage levels. For grocery retail, surviving on very thin operating margins, to have state of the art anti - pilferage mechanism is quite a difficult ask and is not considered cost effective.

Usually, a vigilant security offcial is bestowed with the responsibility of verifying the receipt / bill against the shopping trolley. And since there is human intervention, the chances of errors are very high. Not to forget, these officials, must have been on their feet for close to 12 hours at a stretch, and with no weekly day - offs, the stress levels are considerably high.

During my tenure as Store Manager, I came across incidents wherein the billing assistant would have missed scanning an item, but a vigilant check-out official would have identified the same, and done the correction.

There was also this incident, when a regular customer, purchased 5 cartons of beer, but the billing assistant billed only for 3, and even the check out official missed out on this. This was a grave oversight, and could have resulted in a lot of shrinkage, if it had not been for the customer who was very kind enough to come back the following day and point out the error to the Duty Manager.

Once a parent and his toddler were shopping and the store's plainclothes' security official notified the Duty Manager that the toddler had pocketed a chocolate bar. Once the duo were near the checkout, the security official sought permission from the parent to frisk the child. The parent insisted that the child was innocent, but gave into the request and was very embarassed when the choco bar was found on the toddler.

Catching professional shoplifters sometimes turns out to be a very precarious situation, with the accused threatening the security official and the Duty Manager with dire consequences. There have been incidents were much celebrated and permanent staff have been caught red-handed, which severely dented the trust factor. And then there are habitual shoplifters, who are also called kleptomaniacs, who do it for the sheer joy of it. And such people could belong to any social strata of the society.

Pilferage could happen at any stage of the supply chain. The only way out is to ensure that the systems in place are strictly adhered to, and also reward the store personnel who would have identified the theft. Providing feasible benefits to store staff like medical insurance, higher education reimbursements could be an indirect process to prevent pilferage by employees.

Retail in India is evolving. The markets where the shrinkage rates have been reportedly less have matured over a period of time. High levels of shrinkage could be part of growth pangs, but we would have to be vigilant and ensure that such unnecessary distinction is avoided next year.