Shrinkage at Trendline Apparel: Cameras or Controls?
Trendline Apparel is a 6,000 sq ft store in Gariahat, Kolkata, with 14 staff and an average monthly sale of ₹42 lakh. Its shrinkage is 2.8% of sales against a company target of 1.2%. Last month, 22 high-value denim jeans worth ₹1,09,000 were recorded as 'not found' at stock count. There are two fitting rooms, one CCTV camera at the billing counter and one at the entrance; the denim wall and the accessory spinner are blind spots. Staff bags are kept behind the billing counter and are not checked at exit. The rear emergency exit is often propped open for ventilation in the afternoon. Two staff resigned last quarter, and the manager says 'shoplifting is the main reason'. The regional head wants four more cameras at ₹1.8 lakh but asks for a cost-benefit analysis first. One security guard works from 11 am to 7 pm. The store opens at 10:30 am and closes at 9 pm.
1. Distinguish the likely causes of shrinkage and evaluate the manager's CCTV-only plan.
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Shrinkage has four sources: external theft, internal theft, process error and supplier fraud. The evidence does not support 'shoplifting is the main reason' alone. The denim wall blind spot and the propped emergency exit support external theft. The unchecked staff bags, two resignations and the stock-count 'not found' entries support internal theft or process error. The missing 22 jeans could also be a receiving or transfer error, so check stock records before assuming theft.
Four more cameras at ₹1.8 lakh may help, but cameras only record; they do not remove the blind spot, control the exit, or fix receiving. A cost-benefit view: ₹1.8 lakh is about 0.36% of monthly sales; that is affordable, but the same money spent on fitting-room control, bag checks, a second guard at peak hours and a receiving checklist may reduce more loss. Cameras should be targeted at the blind spots and fitting-room corridor, not added as a general deterrent.
2. Recommend a cost-effective control package and an implementation sequence.
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Sequence by cost and speed: (1) Low cost, immediate: enforce a single-entry fitting-room rule with a token system, limit garments per customer, and station a staff member near the denim wall at peak hours; require staff bag checks at exit with a witness. (2) Low cost, one week: fix the rear door with an alarm contact and a self-closing hinge; create a receiving checklist and two-person verification for high-value denim. (3) Medium cost: move the accessory spinner into the camera's existing field of view and add one camera covering the denim wall and fitting-room corridor, not four. (4) Analyse: run a 30-day exception report on stock adjustments and a weekly cycle count on denim. (5) Review guard hours against the 10:30 am–9 pm trading day; the 11 am–7 pm gap leaves opening and closing exposed. Expected effect: most opportunistic loss is deterred, and the cause becomes measurable before more capital is spent.
3. How should the store handle the propped emergency exit without breaching fire safety?
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The propped exit is a fire-safety violation and also a theft route. Do not lock or block it. Instead: fit a panic bar with a local alarm that sounds when opened, keep the exit sign lit, and clear the immediate area. If ventilation is the reason, install a vent, fan or air-conditioning adjustment so staff have no reason to prop the door. Brief staff that the door may be used only in an emergency and that the alarm is not to be disabled. Check the door daily and log it. This keeps the escape route legal and usable while removing the easy exit for stolen goods.