Risks in Retail

Risk 1: Inventory Risks

Risks Associated With Inventory

Even though sufficient inventory will ensure a smooth flow of business processes and avoid manufacturing delays, this inventory also have certain risks associated with it.

In order to alleviate such risks from your business, you need to understand them completely. By doing so you will be able to draft appropriate risk management strategies using best practices for inventory control. A few key inventory risk types are mentioned below.

Inventory Usage

How much inventory are used in a given period? Proper inventory control requires an analysis of actual usage over time. An asset tracking system lays the foundation for gathering this data, aiding employees in quickly documenting inventory as it moves through the organization. Combined with an inventory control software application, asset tracking facilitates the rapid generation of reports for in-depth analysis of inventory usage.

Theft

Theft is one of the biggest risks with regard to inventory control, specifically when the inventory is higher in value. If internal employees are involved in the theft, it is much more difficult to identify as they know the entire system and would probably be wise enough to erase all their tracks after the theft.

Every year, firms spend millions of dollars to prevent theft risk. They invest money in security measures like cameras or by hiring watch guards to prevent any incidents of inventory theft.

Inventory Waste And Damage

Inventory usually tends to get damaged while being used in the normal business processes. Damaged inventory cannot be used and goes to waste, increasing the costs of the business. To avoid inventory from being damaged and to reduce waste costs, companies create inventory control policies to minimize the damage as much as possible as well as issue rules and regulations regarding the effective use of inventory to prevent waste.

Inventory Loss

Inventory is a current asset to a firm. A loss of inventory means a reduction in the company equity. Goods in the inventory can get lost if the inventory is not managed properly or if the employees are not careful in handling inventory.

Firms have now created an inventory control system to identify the exact amount of inventory loss as well as the cause of the loss. This enables them to reduce company expense and prevent such inventory losses.

Shelf Life

Many products have a certain period of shelf life. This poses an inventory risk for the company. Perishable items like milk and eggs have a smaller shelf life than other products and companies producing such goods may be at a higher inventory risk. This requires manufacturers to have a tight control over their manufacturing and inventory control policies. In such cases, firms produce only as much as the demand requires. Producing less than required will prevent the company from meeting the demand while producing a surplus may increase waste costs.

Lifecycle

All products go through the product life cycle. Those products that are in the decline stage are at a higher inventory risk. Firms of such products tend to tighten their inventory control and manufacturing policies and only produce enough to sufficiently meet their current demand. A surplus production of goods that is not sold in the market will become obsolete and will be a heavy burden on the firm.

Click here to view a video that explains Walmart inventory and internal control.

Risk 2: Risks Associated with Customer Service/Contact

Violence And Verbal Abuse From Customers

Violence from customers is all-too-common in the retail sector. Attacks can occur when staff has to deal with thefts and robberies, troublemakers, angry customers and drunk or drugged customers. Violence against staff include attacks, intimidation, verbal abuse and harassment, and can make you anxious and stressed. It should not be seen as part of the job and you should not be blamed if you are involved in an incident. Preventing violence include paying attention to: environmental design, safety and security devices, staffing levels, work practices, reporting, guidelines, and training.

Your employer should have procedures for dealing with violence. Find out what are they are - your employer should provide you with instructions and training about in prevention measures to deal with violence, such as the procedures:

If you work in retail, it is almost inevitable that you will have to deal with an irate customer at some point. Follow these guidelines for dealing with irate customers:

• Focus on the emotions first, try to remain calm, and try to calm the other person.
• Try to avoid escalating the situation. Find ways to help the irate customer save face.
• Listen carefully and try to put yourself in the customer’s shoes, so you can better understand how to solve the problem.
• If you cannot address their concern, take the customer’s name, number, and promise to forward the information to your manager or supervisor.
• If you cannot calm the person, ask for help.

Risk 3: Shoplifting and Robbery

Preventing Shoplifting

The main concern in the event of theft or robbery is your safety, and that of your co-workers and customers. Money and merchandise taken during a robbery can be replaced; people cannot.

• The chances of shoplifting increase when you work alone.
• If you suspect someone is shoplifting, contact security or someone professionally trained to deal with the situation.
• Never approach or try to apprehend a shoplifter, especially if you are working alone. After the shoplifter leaves, write down as much information about the incident as possible.
• This should include the shoplifter’s height, weight, hair and skin colour, and clothing. If a vehicle is involved, write down the make, colour, approximate year, and licence plate number.

Preventing Robbery

The best way to prevent injury resulting from robbery is to prevent the robbery from happening in the first place. Some businesses have internal security staff and specific instructions for dealing with robbery, but others may not.

Here are some tips to help protect you:

• Make the store attractive to customers and unattractive to robbers.
• Keep the store clean, tidy, and well lit.
• When there are no customers at your sales counter or checkout, keep busy by doing tasks such as cleaning, dusting, or sweeping.
• Stay away from the sales counter when there are no customers in the store.
• Keep the cash register funds to a minimum.
• Stay alert.
• Be aware of cars parked across the street or off to one side of the lot.
• Look for anyone who may be watching the store or loitering in or around it.
• If you are concerned about a person or vehicle, do not hesitate to contact your supervisor or the appropriate authorities.
• Know the locations of phones or available help outside the premises.
• Connect with potential customers.
• Give a friendly greeting to everyone who enters the store.
• When a shopper is nearby, act in a friendly manner, and briefly look directly into their eyes.
• Ask people alone in the aisle if they would like any help.

If A Robbery Occurs

• Your employer will provide specific instructions for dealing with robberies. However, the following tips may be helpful:
• Keep it short - the longer a robbery takes the more nervous the robber becomes.
• Stay calm - handle the entire situation as if you were making a sale to a customer.
• Obey the robber’s orders - let the robber know you intend to cooperate. Hand over cash and merchandise and do exactly as the robber says.
• If you are not sure what the robber is telling you, ask.
• Tell the robber about any possible surprises - tell the robber before reaching for anything or moving in any way. Tell the robber if another employee is in the back room so the robber will not be startled.
• Do not try to stop the robber - trying to fight with a robber is foolhardy, not heroic. If you do not see a weapon, always assume the robber has one.
• Do not chase or follow the robber - this will only invite violence, and it may confuse the police as to who is involved with the robbery.
• Write down information immediately - as soon as the robber has left, make notes about their appearance, mannerisms, and specific features, as well as the time and the direction they took when they left.
• Call the police or appropriate authorities - dial your local emergency number or activate the panic button.

Risk 4: Risks Associated with Staff

Harassment

An unwelcome behaviour or comment that is harmful to the work environment is considered to be harassment. Harassment takes many forms but can generally be defined as an insulting, intimidating, humiliating, malicious, degrading, offensive comment, or acts directed toward another person or group. This would also include bullying, sexual harassment, and offensive displays.

Although harassment typically do not include physical violence, it can be very harmful and it does affect the overall health of the work environment.

Deal with it in the following way:

Tell the harasser to stop. Do this right away by saying it or writing it in a letter or e-mail. If that doesn’t work, follow the next three steps:

• Tell your employer or the person your employer has appointed to receive and handle harassment complaints.
• Talk about it with someone you trust (for example, a co-worker, friend, or relative).
• Write it down. To help make your case in an investigation, write down each remark or incident (using the exact words if possible), including dates, times, places, and the names of any witnesses.

Violence In The Workplace

Workers in the retail industry experience more cases of violence than workers in many other industries. There must be a system in place to ensure your well-being. Such a system must include check-ins at designated time intervals and provisions for emergency rescue if it is ever needed.

Risk 5: Risk Associated with Finance

Handling Money Safety Tips

Handling money can expose you to the potential for violence. There should be procedures in place to help you stay safe when handling money.

• Handle money at a location away from entrances and exits.
• Keep as little cash in the cash register as possible.
• Place large bills in a drop box, safe, or strong room that is out of sight.
• Vary the time and route for making bank deposits.
• Avoid making bank deposits at night.
• Do not carry money in bags that make it obvious you are carrying cash.
• Make deposits with a co-worker, if possible. The co-worker should face away from the depository to keep an eye on other people in the area.
• Employers can also make the workplace safer by fitting counter safes with time-delay locks.

Risk 6: Risks Related to Occupational Health and Safety

Protection

Retailers are expected to protect anyone who enters their premises from harm, by removing or controlling risks to employees, volunteers, contractors or members of the public.

Any retail manger has to ensure the health and safety of employees while they are at work, and of any third parties affected by their business, which includes visitors to a retail unit such as members of the public, volunteers and contractors, by taking all "reasonably practicable" steps to guard against any "reasonably foreseeable" risks/hazard.

Provide A Safe And Healthy Workplace

Ensure that you and your co-workers are adequately trained, and keep records of your training.

Provide a comprehensive occupational health and safety program, including a written health and safety policy (you can ask to see a copy) and an incident investigation procedure.

Support supervisors, safety coordinators, and workers in their health and safety activities. A good employer encourages safe work practices at all times.

Take action immediately when a worker or supervisor reports a potentially hazardous situation.

Initiate an immediate investigation into incidents.

Report serious incidents to the Department of Labour Compensation Fund.

Provide adequate first aid facilities and services.

Provide personal protective equipment (PPE) where required.