A Guide to Preparing for a Physical Inventory

Maintaining an accurate inventory is a daily process that culminates with a yearly or bi-yearly Physical Inventory. In order to achieve the most accurate results for a Physical Inventory the following is essential:

Document Management

Merchandise Maintenance

Loss Prevention

Use documentation to record vendor receipts, customer sales and inventory quantity adjustments to establish an audit trail.

A very time consuming aspect of the Physical Inventory is attempting to count merchandise without merchandise tags. Assign a section of the store to each associate on staff, while on duty it is the associate’s responsibility to check each piece of merchandise in their assigned section for merchandise tags. If the merchandise tag is missing the associate must place the product in an area designated for re-ticketing.

Designate ONE area of the store for re-ticketing, damages and holds. Mark items out of stock using documentation to support the change in inventory quantities. Check holds for aging and return expired holds back to the sales floor.

Prevent theft by assigning “Zones” to each associate on duty or an area of the store that is their responsibility. If the associate needs to leave the zone for any reason, they must wait for a replacement. Good zoning includes:

Greet each customer within one minute

Check back with browsing customers

Provide attentive customer service

Make frequent eye contact with all customers

Ensure fitting rooms are cleared between customers

Make note of empty hangers or defeated merchandise tags as these may be signs of external theft

Walk the zone; don’t hang behind the wrap stand

Be wary of shoppers dressed in bulky or oversized clothing

Watch shopping bags and strollers closely as potential theft vehicles

Extra vigilance is needed for groups of shoppers as most professional shoplifters work in groups

Pay extra attention to monitoring blind spots on the floor where fixtures inhibit the line of sight

Inspect trash being removed from the store

Associate bag checks should be conducted at the end of each shift

Prepare for a Physical Inventory

Plan
Who will map the store
What day will the Physical Inventory are conducted
Who will help conduct the inventory
Who will pre count/post count
Who will scan (if using a hand held scanner)
Who will handle (if using a hand held scanner)
Who will review counts and correct errors

After the above questions have been answered:
Schedule associates accordingly
Have a meeting
     -Each associate is assigned a preparation task
     -Discuss the responsibilities of each associate during the PI

Prepare Organize the floor and stock room
     -Straighten-Straighten-Straighten
     -Ensure all like styles/items are grouped together
     -Ensure all products have a barcode
Draw a map of the store and stockroom
Check behind shelves, under tables and in drawers for hidden merchandise

The night before inventory:
Pull tickets out of garments
Lay numbered fixture tags on each fixture
     -Don’t forget to include your Hold area!
Record the placement of the numbered fixture tag on the map

Pre-count
Each fixture and record number of units on the back of the fixture tag
     -Use this number later to compare to the number of units scanned during the PI
     -Pre-count and record on paper the SKU/Item number of garments used on displays
     -During the PI manually enter counts of display items

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