Written by James Tullai, One Step Retail Solutions Implementation Specialist

Human error is among the top reasons for retail shrinkage. This can show up just about anywhere within a store. One of the easiest ways to help minimize this is with checks and balances as merchandise is moved from one location of your company to another. This is often called ‘Tracking In-Transit’.

Here are some important reasons why tracking merchandise is essential for a healthy inventory:

Store accountability – “He said she said”. The larger the transfer the greater the chance of a mistake. If your New York store said they send 10 widgets and the Los Angeles store said they received 11 widgets to the New York store, who do you believe? You believe both. When resolving transfers, many POS systems will create an inventory memo that will make an adjustment for the variance. This variance can be adjusted from the source store or the destination store. At the end of the period, you can then track which stores had the largest amount of errors. Stores will then be accountable for their own stock count.

Minimize Theft – Closely managed inventory is a theft deterrent. If employees see that merchandise is being tracked closely there will be less temptation for theft.

Lost Shipment or Boxes – Shipments can get lost during transit. Many POS systems include features to list pending transfers and note where the transfer is from, and where it is going. You can see transfers headed to specific stores and note when to expect them. Setting a reasonable amount of time when shipments should arrive is a good habit to create. If a cross country transfer that’s in transit longer than 7 days would be a red flag, use that information to provide an alert to contact the responsible shipper. Also, a transfer going across town shouldn’t take more than a day or two.

Auto Resolution of Discrepancies – Managing transfer discrepancies can be a time-consuming task. You need to be a part-time detective to determine who wins over a dispute. There are ways to help minimize this.   Many POS systems can auto-resolve any discrepancies if they meet certain thresholds or pre-defined rules. If you determine that one store is always making receiving errors, you may have features that allow you to auto-match or auto correct the transfer transaction.

It’s important to note that not all POS systems will track in transit merchandise the same way. Depending on your system features and your current system settings, the in-transit merchandise may not be included in store on-hand inventory until it has been fully received.  In other words, based on your system's settings, you might have a situation where nobody owns the merchandise that is in-transit. You might want to consider using inventory reports to account for the merchandise that is in-transit.

This early point in the year is a good time to review your system settings to be sure they fit how your business operations may have changed for the new year.

If you’d like any help checking these settings or getting recommendations on your system's configuration, One Step is ready to help.