Auto Service World
Feature   January 1, 2000   by Auto Service World

University of the Aftermarket: Shrinkage Control Adds to the Bottom Line


It is no secret that at the start of the 2000s the aftermarket is a tough place to do business.

Competitive pressures continue to increase, margins get thinner, and finding good qualified people is getting harder. In other words, it is just harder to make money.

As you are striving to manage your company better, one area that you should not ignore is safeguarding your assets. Inventory is probably your largest asset and is the most vulnerable to loss. There are many ways to lose inventory. It can disappear through customer shoplifting, customer fraud, shipping errors, and yes – through internal theft. Unfortunately, more than 40% of all product theft has been done by employees.

How does employee theft occur?

Easy!

Merchandise is being taken by a driver and sold to a customer or friend and not billed through your store.

The driver is taking extra parts out of the store during normal delivery runs.

Merchandise can be taken out by an employee while going to check something in his or her car.

A store team member might be placing parts in a trash bag when taking the trash out. (Using clear trash bags instead of opaque ones can increase the visibility of what is in the bag.)

Merchandise can also be placed outside the back door where a friend can pick it up.

Unfortunately, there are as many ways as there are employees for theft to occur in a parts store – and some.

So, what can be done about this problem?

To prevent merchandise being taken by a driver and sold to a friend, verify that all parts leaving the store have been billed. And, be sure to load all deliveries from the front of the store whenever possible.

This will allow the store manager and other team members to observe what is leaving the store. A store manager or other assigned team member should review the outgoing parts with the invoices and the delivery log to insure that everything matches.

The back door of a store should be locked at all times. Keeping the door locked will prevent unauthorized people from entering the store unobserved and creating the potential for theft. Locking this door can also reduce the opportunity for team members to carry unpaid merchandise out of the store. Consider putting a buzzer, a bell, or an alarm on the rear door.

Other security measures that can be taken to control internal theft are:

Inspect the bushes and other hiding places outside the store where merchandise can be hidden on a regular basis.

Maintain a current list of who has keys to the store and have keys made that cannot be easily duplicated.

Review the store entry report from the alarm systems company on a regular basis

Consider the installation of security cameras in the hard parts area. A hidden pin hole camera performs well. They are inexpensive, but before doing so check with your attorney and legal authorities regarding your province’s laws regarding security.

There are many ways to minimize your exposure to both internal and external theft. Rely on common sense and promote a clear understanding of the rules regarding parts leaving the store. Setting clear rules, making sure that all staff understand them, and sticking to them goes a long way to reducing internal losses.

Want to Learn More?

Interested in learning more how about how to better protect your assets, boost your profits, and better serve your customers? The University of the Aftermarket’s Security and Shrinkage seminar can help you do this. The above tips on how to better control shrinkage are just a small example of how you can better do this. In addition to the above topic, this seminar will show the participant how to reduce

Inventory losses due to paperwork, vendors, and customers – in addition to team members;

Cash losses due to team members and customers;

Office supplies due to careless handling and team members and

Time due to team member carelessness or intentional theft.

And, there are two ways that you can take this seminar! You can be among the first to take the plunge into the virtual interactive aftermarket by taking this course on-line. Register on the University of the Aftermarket’s web page (univaftmkt.org)! All you need is a Windows-based PC with Internet access and a CD-ROM drive. Using state of the art programming, the University has eliminated the excessive video download time by having the course resident on its web page and trigger video off the CD-ROM as needed. After a participant registers, the University will send a CD. And, this course is a bargain! It costs only $49.95! (The University accepts MasterCard, VISA, Discover, and American Express).

And if a participant is not Internet inclined, the seminar can be taken via video. The video can be ordered through the University’s web page or by FAX (816-523-8252) or by calling the University registrar at 1-800-621-UNIV. The cost is the same – $49.95.