All too often, employees and customers hide pilferage with creative techniques that mask the impact it's having on your salon or spa's bottom line.
Here are nine simple strategies you can use to reduce pilferage in your salon or spa.
1. Monitor Retail Products
Like most salons and spas, you probably display and sell retail products. With a few basic safeguards in place, you can make it easy to track pilferage of retail products.
First, you need to know how much of any given retail product you should have on hand. The easiest way to do this is to ensure your POS tracks product sales and provides a report that lists each sale.
If you don’t have software that automatically tracks how much retail products you’re selling, then you'll need to manually track this information in a spreadsheet.
You should then conduct regular audits, where you physically count each retail product and ensure this count matches your expected number.
2. Dig Deep Into Retail Product Audits
To really make a dent in pilferage, you need to go beyond the basics and identify exactly where pilferage is occurring.
To do this effectively, you'll need to track the number of retail products in your storeroom separately from those on display on the floor. This process of managing separate records requires frequent updates to both the storeroom and floor records as you replenish your on-floor supply.
Software can automatically track this for you. Otherwise, you'll need to ensure that a proper checkout process from the storeroom is used to manually update your spreadsheet with retail product balances so you can audit each location to accurately surface any gaps.
3. Keep Sales and Pilferage in Mind For Displays
While it might seem like a good idea to keep your retail products behind a glass case to control pilferage, physical barriers hinder retail product sales. Focus on maintaining a strict auditing process rather than locking down products.
4. Develop Backbar Inventory Procedures
When it comes to products that you use for your services, it’s difficult to differentiate between outright theft and wastage. It could be that your stylists or therapists are simply using too much of a particular product when delivering a service.
The only way to identify theft or wastage, is to implement a control system that projects product usage. Here's how it works:
- Know what and how you've purchased.
- Identify how much of each product should be used for each service. For example, a hair wash might require two pumps of shampoo and two pumps of conditioner.
- Use your POS to track how many services you sold over a period of time.
- Calculate the total quantity of each product used over a given period, based on all services that were delivered during that period. For example, if you've delivered 100 shampoos, you know that 200 pumps of shampoo should have been used.
- Conduct a physical audit of your non-retail products that are in the backbar and on the floor.
- Compare how much product should have been used (e.g., 200 pumps based on the 100 shampoo services delivered) and how much was actually used based on the physical stock that remains.
By comparing the actual usage of product with the projected usage, you can identify areas that don't match. Gross discrepancies are typically indicative of theft. Smaller discrepancies are signs that wastage might be an issue instead.
If you discover that your employees are wasting, not stealing, products, you can develop training to help them stop wasting so much products.
Read more about Optimize Sales with Inventory Reporting
5. Use the Good Old-Fashioned Lock
Unlocked doors and storage rooms add fuel to the fire if you have a pilferage problem.
Appoint an employee to be the storeroom manager or inventory manager. Ensure they lock up by following a checklist of rooms, cases or other items that hold items that can be stolen. By appointing a dedicated person, you'll ensure someone owns this responsibility and can answer for any discrepancies.
6. Crack Down on Gift Card Theft
Old-fashioned gift cards posed a major pilferage risk. With physical gift cards that came preloaded with monetary value, it was difficult to avoid theft.
These days, most salons and spas load value onto the gift card at the time of purchase. If a physical gift card is stolen, it's pretty much useless
If you're still stuck with old, preloaded gift cards, it's important to implement a daily audit. If you find that gift card theft is a big problem, consider storing the gift card’s unique ID in a spreadsheet each time a gift card is sold. Whenever any redemption is made against any gift card, check the list and ensure it was a purchased (and not stolen) card. This method is cumbersome, and can be particularly challenging for multi-center spa or salon chains, but it gets the job done until you can revamp your gift-card approach.
One way to solve the problem entirely is to sell gift cards online. Online gift cards bypass all risk of gift card theft, plus you'll gain plenty of other benefits by selling gift cards online.
7. Improve Employee Wages and Benefits
You can prevent a great deal of pilferage by giving your employees a fair wage and awarding commissions. Make sure your employees know the formula for calculating commissions and the benefits you provide. If you use spa or salon management software, ensure that employees have access to their commissions earned for added transparency and trust.
Giving staff discounts, services, products or even a birthday gift card builds goodwill and keeps them happy and looking great. You probably already practice this, but remember that if you want to reduce pilferage in other areas, you'll need to be generous here.
Learn more about staff motivation ideas
8. Create Clear Pilferage Policies For Your Staff
Create a clear policy describing what constitutes pilferage and what doesn’t. Make sure your staff have read and understand the policy, and are clear about what the consequences are if they're caught stealing.
Learn more about Zenoti Spa and Salon Staff Management Software
9. Follow Standard Procedures When Employees Get Caught Stealing
No matter how many steps you take to prevent pilferage, you'll still catch some employees stealing.
Once you catch an employee stealing, follow your pilferage policy. Give them a chance to explain their actions before dismissing them, and then refer to your policy on pilferage. This remind the employee of your policy and can help prevent a potential lawsuit.
You might not be able to do away with theft altogether but you can definitely reduce it. Zenoti helps you mitigate pilferage from customers and staff.
