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Stop employee pilferage

Inventory controls are key to dissuade employees from stealing
By Juanito Villegas |

Since losses and pilferages are inevitable in a retail and wholesale business, entrepreneurs need to have strong and effective deterrents against them. Here are some tips to minimize this annoying problem.

1. Hot sellers are your most vulnerable goods.

Items that are popular with customers are also popular with your staff. At Pilipinas Makro, we have instituted several layers of security measures as a deterrent against pilferage from within.

• Key volume inventory. Identify the items that are (1) most often pilfered, (2) fast-selling, (3) easy-to-pocket, and (4) pricey or expensive. We make it a point to count these items every day, compare the theoretical count or the computer count against the physical count. We put up a separate inventory system for each item, and we deploy roving security people to check on suspicious activities in the store.

2. Start using a perpetual inventory system

This is an ongoing record of the historical movement of each item in and out of the stockroom, plus the current balance on hand. This system can tell you the maximum and minimum limits of your stock at any time and provide you with instant reports.

• Perpetual inventory can be done in any of three ways: manually, by bookkeeping machines, or by data-processing equipment. The third is the fastest and it is capable of doing up-to-the-minute inventory checks. In Makro, we have our own system specifically developed according to our needs and requirements. It tells us such information as the current stock level of the items, the daily mean sales, and the season inventory.

Although a perpetual inventory system is relatively expensive, its usefulness can far outweigh the cost of setting it up and running it. There are local software development companies that can provide you with the necessary perpetual inventory system for your business.

3. Instill a sense of ownership among employees.

This is especially true for regulars, supervisors, and managers. At Makro, we give them shrinkage or pilferage reduction targets that need to be kept low or brought to zero level. Our experience is that if your employees have a sense of ownership, they will track down missing items themselves.

• Computers can only do so much, but coupled with inculcating honesty among staff and instituting the appropriate deterrents, they can work very well in minimizing losses and pilferages. It is therefore highly advisable to do both the manual and the computerized inventory system in a retail and wholesale business.


Mr. Juanito Villegas of Pilipinas Makro has ten years of experience in overseeing and controlling the flow of goods in a manufacturing company. Pilipinas Makro, Inc., which started in 1995, is a major cash-and-carry wholesaler that supplies a wide range of goods to retail businesses, institutions, and individual professional customers.

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