Shrinkage Control
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Shrinkage Control

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Shrinkage is the loss of products between the point of manufacture or purchase from the supplier and the Point Of Sale (POS). Shrinkage is a major headache for retailers. Retailers currently employ solutions such as Electronic Article Surveillance (EAS) to detect and deter customer theft. These systems have a number of limitations because they:

  • are limited to deterring and detecting
  • provide no actionable intelligence
  • can’t help with inventory, returns or counterfeit detection
  • can create false alarms which can have a negative impact on the customer experience

GS1 EPCglobal standards combine the theft deterrent benefits of EAS with the visibility benefits of RFID. The solution is a disposable or reusable tag that is programmed with a unique item number (the EPC number) which can be read from the production line to the retailer’s front door. An organisation can get the most benefit if the items are tagged at source.

The tag can be used to determine stock levels through the Supply Chain and ensure optimised customer availability. When the product is legitimately purchased, the tag can be set so that the alarms at the door are not activated. If the item goes through the front door without being correctly purchased, the item is detected and the unique number read.

If the products are not recovered, the store knows what has been stolen and can restock accordingly. If the product comes back into the store so the thief can get a refund, the unique number will be read again and will be identified as a previously stolen item.

The integration of Electronic Article Surveillance (EAS) with RFID technology streamlines the POS process and validates returned merchandise. It provides the retail industry with unique item level identification and enables them to:

  • deter and detect theft both in store and through the Supply Chain to the shop floor
  • get item level visibility throughout the Supply Chain
  • improve the customer experience and sales by increasing product availability on the shop floor

GS1 standards based inventory shrinkage/pilferage control solution ensures –

  • reduction of administrative errors such as shipping errors, warehouse discrepancies and misplaced goods by using Global Data Synchronisation Network (GDSN) certified data pools
  • prevention of shoplifting, employee theft by adopting GS1 EPCglobal standards based EAS system
  • reduction of item loss at POS or during logistics operations by maintaining accurate, efficient product data captured through scanning of GS1 barcodes or EPC tags