A Trade Magazine for New Age Retailers

Shop Talk – October 2017

Q: For the first time in over a decade of being open, our small retail store is experiencing shoplifting of larger merchandise. In the past we have noticed small items were unaccounted for, but recently a 24” statue is gone, as well as an expensive necklace.  I am upset and dislike even thinking this is true!  I am also wondering if it is time to get a security system, but I worry about how the big pillars will look in my store.  I am also wondering about which type of security system would be best, which merchandise I will need to security tag, and how to make those tags fit in aesthetically at our store.  Can you help me?


A: First, let me address how these feels, and then we can talk about practical steps you can take to protect your merchandise from shoplifters.  It was always hard for me when a customer stole something.  It felt like being kicked.  I knew in my head it wasn’t personal, but it felt like it.  When you pour your heart and soul, (as most retail owners do), into creating a great shopping experience, it is hard to accept that some people, for whatever reason, totally disregard that and decide to help themselves to your merchandise without payment.


The truth is, shoplifting is rarely personal.  Over the years, I began to see it like my organic garden.  There are going to be a few insects that “steal” some of my carefully tended veggies, but the majority will bear fruit and provide nourishment. The same is true with customers – most will support you by purchasing rather than stealing.


That said, sounds like it may be time to install a security system.  As for the type, you basically have two electronic article surveillance (EAS) system choices, radio-frequency or magnetic.  We used a Checkpoint radio-frequency system. I recommend this type because they are less expensive, less costly to service/calibrate, and can be easily configured to cover single or double entry doors.  The downside is that radio-frequency systems do not work on metal items, (so not optimal for a hardware store), but most customers don’t know this so a tag on a metal statue can be just as effective in deterring a would-be shoplifter.  You also have to be mindful not to place tagged merchandise too close to the security pillars (leave 6-8” clearance) or else the alarms will pick up the frequency and “go off” when no customers are in the vicinity.


Even though security systems are a major investment ($5-$10K depending on the size of your store, pillars needed, etc.), there are many refurbished systems available through the dealer or from a private party, and those are far less expensive, often obtainable for just $2 or $3 thousand dollars.  You can also lease purchase a system and the monthly payments are usually very reasonable.  We had the same system for over 15 years and it paid for itself many times over in loss prevention and peace of mind.


I, too, worried about the security towers at the entry to the store.  What would customers think?  Would they be too kludgy and ruin the “look” of the store?  Turns out my fears were unfounded.  In very short order, the pillars blended in as part of the furnishings.  They were there, but basically unnoticeable.


Your question about which merchandise to tag and how the tags will look is a good one.  Over time you will find what works in your store.  We found that the tags (which come in a variety of sizes – some as small as a postage stamp) could be hidden under most of our price tags, so we basically tagged everything except jewelry.  Most jewelry was kept in a locked case because we did not find a way to place a security tag that didn’t overpower such small items.  We did security tag earring hang cards on spinners and that worked well.


Another consideration in deciding which merchandise to tag has to do with cost.  Most of the tags cost approximately five cents each, so tagging every item in your store could be costly.  If you can’t afford to tag everything from the start, tag what you can and then add more gradually as the shipments come in from vendors.  I know you are most concerned about the larger items that have gone missing, but be sure to tag at least a percentage of the smaller items, even if they are not expensive.  You may be surprised at first how often the small items will set off the security system, and those small items do add up!


Security systems are not foolproof, but it was definitely a relief for our staff to have another “pair of eyes” on the alert so that they could just relax and enjoy the customer interaction. Professional thieves can find a way to circumvent these systems, such as lining a large purse with tin foil to disrupt the radio transmission, but these cases are rare, and you are already subject to that kind of behavior without a security system too.  We saw a big drop in merchandise loss simply because we had installed a system. Psychologically, it is a deterrent to the “casual” shoplifter who doesn’t want to take the risk of arrest.


Another note: Have a well-practiced procedure in place so that employees know exactly how to respond when the security alarm does go off.  The better trained that they are, and the better informed about your expectations as the store owner, the better they are able to handle what can be a delicate customer situation.


Q: Over the last year, we lost two of our best sales people. One went back to school and another took a job in a medical office and there was no way we could match the salary.  The new employees we have hired are not nearly as good at making sales and our revenue is slipping.  I am not sure what to do or what kind of training to offer them.  I am a little afraid of sales training seminars because customers appreciate our laid-back atmosphere and I wouldn’t want them to feel pressured.  What do you suggest?


A: It is important that every sales person you hire is capable of and comfortable with making sales. This does not have to create a high-pressure environment. The art of selling is truly the art of helping the customer identify what they want and feel good about purchasing. Truly good sales people genuinely like other people and want to be of service. They can share information in a kind and helpful way that most customers will respond well to.


In general, good sales techniques include greeting the customer, establishing a rapport, presenting merchandise or showing them around, making the sale and inviting them to return.  It begins with a smile, eye contact, and a greeting that encourages a response and expresses sincere interest, such as “What brings you in today?” From there, the next step is to engage the customer if they want assistance, or let them browse if that is their preference, and then check back in a few minutes to see if they have any questions.


Whether you train employees yourself through instruction and role-playing, have them “trail” a seasoned employee, or send one to a sales seminar and have him or her share what they learned in a group meeting, you will be helping them provide good customer service.


The goal is to ensure that each customer has a satisfying shopping experience and are pleased with their purchases.  If employees grasp the concept that their job is to invite, inform, and guide and that this is all a part of great customer service, they will feel more comfortable approaching and assisting customers and your bottom line will happily show the results.


Q: A few months ago, a sales rep talked me into ordering a new line of candles that she claimed were very popular, good sellers. I ordered six different scents in four sizes and they have not sold at all!  This was an expensive investment for my store and I am feeling a little betrayed. I even called the company to see if they would let me send some back, but they do not accept returns. Do you think my rep had any culpability in this? And do you have any suggestions about what I should do?


A: Anytime that you have merchandise on your shelves that is just sitting, it is important to address the issue and not just hope it will magically start selling.  There are a few steps you can take right away I call these the three R’s – (relocate, redisplay, reprice) to try to create more interest.  And you can do one at a time, or all at the same time – whatever works!


Relocate: If you already have the merchandise in a prominent space, such as one set aside in the front of your store to highlight new merchandise, this idea may not help.  But if the merchandise is located in a hard to reach area, or if it is on a lower shelf, find a new home for it so that customers can see it easily at eye-level.


Reprice: Price point is usually the reason that products are not selling. Though not always the case, if customers perceive that merchandise is too highly priced, they won’t do further investigation. Take an honest look at the candles and ask yourself: Would I happily pay this price?  How does the price compare with other candles you stock?  Or candles available at other stores nearby? If they are priced on the higher end, what makes them special?


You may want to lower the price (if you deem it is high) or put the entire line on sale if you don’t want to order it again even if it does start selling.  You could also remove two of the six flavors (put them in the backroom for now) to test if less choices generate more sales. Sometimes too many choices can be confusing for the customer and they just give up or get distracted rather than make a choice.


Although it is rare, there are occasions that merchandise is priced too low (and customers wonder what the matter with it is) and surprisingly it will start to sell if it is marketed well and priced at a higher price point.


Redisplay: In addition to relocating the merchandise, take a frank look at you display.  Is it appealing?  Does it have various heights to create interest? Do the colors draw your eye?  Sometimes just rearranging and adding a book for accent or display blocks to create different levels can make a real difference in attracting a buyer.


Another idea is offering information to the customer about what make these candles special.  Incorporate signage into your display that tells a story or focuses on the unique properties (scented with essential oils, smokeless, etc.).


If you have tried all of these and the line still doesn’t sell, write it off to lesson learned (it happens to all of us at some point!), put them on a deep sale, and try to recoup whatever money you can.


In answer to your other question about the rep and what responsibility he or she may hold, my opinion is that you need to let this one go and not blame.  The reps’ job is to keep you informed about new merchandise, hopefully protect your territory by not selling the same line to a nearby competitor, and to be a liaison with the vendor should issues arise, but ultimately the decision to purchase is yours.  It is your choice to ask for their opinion (or not) and your job to determine how much you rely upon what they say.  Most reps are well meaning and only want to sell you lines that will benefit you because they also want your repeat business.  Over time, you will learn which reps have a true “feel” for your store and your customer base and which do not.  Ultimately, you are the buyer and you hold the purse strings, so, as they say, the buck stops with you.


Q: We have a customer who returns almost everything she purchases.  It is really maddening!  We only give refunds for merchandise that is returned in excellent condition, but I am at a loss as to how to handle this.  I can’t figure out what motivates her.  When she buys books, I suspect that she reads them, but they are in pristine condition when they come back, and they are always back within our stated return window, so there is not much I can say.  She rarely buys products that are not returnable (such as personal care items), so that is not a problem, but every time I see her at the register, having 5-10 items rung up, I wonder how many will be coming back next week.  What can I do?


A: I can certainly see your dilemma and, in all my years in retail, this question has not come up.  Not that the distinction of being the first person to present this scenario is any solace for you!  My guess is that this person has some kind of compulsive buying disorder that causes her to impulse purchase and them have to return for lack of cash flow.  If so, that is sad, and I hope she gets help, but your retail store should not have to be adversely affected by her condition.


My best advice would be to talk with her.  Either contact her or ask to meet with her, or, the next time she is in shopping, ask her to come to your office, or in a private space, where you can talk.  No need to embarrass her with others being able to overhear your conversation.


I would simply tell her that you notice that she returns 80% or 90% (whatever the actual figure is) of what she buys and explain that this is a problem for your store due to additional costs incurred with restocking, maybe repricing, and also possibly overstocking if those items have already been reordered from the vendor.  I would, as nicely as possible, let her know that you are sure she is not trying to cause extra work, but that this pattern will not work for you going forward.  And of course, listen to her if she wants to offer an explanation, but, regardless of the reason she may offer, hold firm to the fact that it won’t work for you going forward.


My guess is that she will probably find another place to shop.  That would be the most desirable outcome. If not, and her behavior persists, the next step would be to institute a 25% restocking fee and tell her about it in advance.  It could be written on the receipt of her next purchase.  To be legal, you may have to institute this fee across the board to all customers, but it can (and would be) waived for anyone with a reasonable explanation and no history of a high percentage of returns.


Q: My business partner, who is also my sister, and I have not been getting along lately and it is adversely affecting us and employee morale.  It may be affecting customers too, although I have not seen evidence of that yet.  We argue about which products to buy, how to address employee issues, and even the length of our lunch hours (she takes a much longer lunch than I do).  In the beginning we worked together well but now, two years in, neither of us is happy.  We both put in half of the store startup costs and there is no way I have enough cash to buy her out.  I feel miserable and stuck.


A: Creating a business with a partner is a lot like entering into a marriage.  It can be an exhilarating rush until the “honeymoon” period is over and reality settles in.  You may not have the romantic relationship issues to deal with, but you still have to figure out a way to partner that works in the long term now that you are past the excitement and lengthy hours of the startup period.


The most successful partnerships are ones in which both partners know what the other person brings to the table, acknowledge their own and their potential partners strengths and weaknesses, determine in advance how disagreements will be handled, and establish job descriptions or areas of responsibility for each that do not infringe upon the other.


Without this prior planning, many partnerships fail or experience the kind of disintegration you are now facing. In addition, you may be adding unspoken childhood patterns of behavior to the mix.


So, is all lost?  Not at all, if both parties are willing and motivated to make some needed changes.  Since tensions are already high, you may want to hire a consultant that specializes in partnership harmony, to assist in ironing out your new partnership agreement. It is imperative that you do this as soon as possible to be able to salvage your employee’s trust. They will benefit greatly by watching you face this issue and come though it successfully, but in the meantime, they are probably distressed and uncertain, so act quickly.


One fast “fix”, until you can get the details of an agreement on paper, is to create divisions of duties and then do not cross those lines.  Try to do this based on strengths and weaknesses – is she better with numbers and finances?  Do you have an eye for display?  Who would be the better merchandise buyer?  Does one of you excel in training new employees and the other would just as soon not be involved?


Once you have determined the areas of your business that need to be covered, and divided up who will do what, be respectful of the other’s territory, even if you think you can do it better.  Agree that either of you can ask questions or offer an opinion in an area that is not your own, but the final call will be made by the person in accountable for that area.  Set aside a time, say a weekly meeting, for these discussion to take place where you can be assured that any conflict is not discussed in front of your staff.


Having clear delineation in job duties should alleviate the need to gauge who works more hours or makes a great contribution (such as the lunch hour debate).  If you are both effectively carrying out your job responsibilities, and the business is prospering, hopefully it won’t be necessary to watch the clock or each other.


Published in Vol31/Issue 6/2017

Kim Perkins
Author: Kim Perkins

Kim Perkins is a business consultant, author and national speaker. She is the former co-owner of Elysian Fields, Books & Gifts, located in FL. As a consultant, Kim specializes in helping small businesses achieve financial health and excellent employee relations.