In the “All About You” feature, you learned about inventory theft and a relatively new technology to help prevent theft . You have recently accepted a part-time sales position at a clothing store called College Fashions. The owner-manager of the store knows that you are enrolled in a business program and seeks your advice on preventing inventory shrinkage due to theft . The owner-manager is aware that the industry average shrinkage rates are 1.49% of revenues but does not know College Fashions’ shrinkage rate.

Instructions
(a) Assume the store uses a perpetual inventory system. Explain to the owner-manager how she can determine the amount of inventory shrinkage.
(b) The owner-manager wants to know if she should implement some type of technology to prevent theft. What would you advise her to consider before making an expenditure on technology to prevent theft ?
(c) Assume that College Fashions’ sales revenues are $400,000 and the shrinkage rate is 4%. What is the dollar amount that College Fashions loses due to shrinkage?
(d) Some believe that great customer service is the best defence against shoplifting. Discuss why great customer service may help prevent shoplifting.
(e) You also learned in the All About You feature that employee inventory theft is a significant problem. What procedures might management implement to prevent or reduce employee theft of inventory?
(f) In your part-time sales position, you have observed a fellow employee that you are friendly with provide unauthorized sales discounts to her friends when they purchase merchandise from the store. Is it appropriate for this employee to give her friend unauthorized sales discounts? Explain. What might be a consequence for you as an employee if you fail to inform management of these unauthorized sales discounts?