Inventory Best Practices

Successfully managing your inventory can be a challenging task, as it requires time and effort to keep your redemption area running smoothly. Inventory management is only one piece of the redemption puzzle but the tools and resources Redemption Plus provides can help make this process less daunting.No more stressing about cleanup like this guy!👆The inventory systems in your FEC are only as good as your data. In your redemption area, this information is going to be stored on your Point of Sale (POS) software. Redemption Plus provides a Digital Packing List (DPL) with each order which is compatible with all software vendors in the market. The DPL contains all of the vital information necessary to add product count to your inventory. This includes:👉the price👉the ticket value👉the quantity ordered👉the unit of measureInventory management really starts with uploading the DPL after each order.This ensures that your POS data is current and up to date based on your order history. The DPL file is automatically emailed to you once your order has shipped. Your DPLs are also available for download on our website. Our staff has created training videos that outline the DPL upload process, reach out to your Account Manager for more information if needed.Along with uploading the DPL, take some time to check in each order when you receive it. Confirm the contents of your order against the packing slip. If there are missing or damaged items, reach out to us immediately and we will help rectify any issues. In the case of missing or damaged items, you will want to update the inventory count in your POS software to keep accurate data. The DPL does not know that you received a different quantity so updating that inventory count as soon as possible is vital.Now that the DPL has been uploaded and the order has been checked for accuracy, you can sit back and relax, right? Not quite. Although a timely DPL upload is vital to inventory integrity, you also must consider the products scanned out when customers redeem their points. It is important that the correct item is scanned out of your inventory. As each item is scanned out, that data is reflected in your POS system. If the wrong item is scanned, it is going to impact your inventory negatively and cause more work down the road to rectify. If you find that a barcode is not working correctly, reach out to your Account Manager to help.No matter how well your systems are managed, there is still a need for a physical inventory count to keep data accurate. Mistakes happen and shrinkage must be accounted for as well.Shrinkage is the difference between your recorded inventory levels and your actual on-hand inventory.This discrepancy may occur when items are damaged, miscounted, or stolen. Typically, you can expect 1–2% as an acceptable amount. If you find that your shrinkage percentage is higher than that, there may be other issues to address. We recommend that you perform a physical inventory at least once per month. By performing frequent inventory counts, you will be able to recognize recurring issues or uncover larger more impactful concerns. To help speed up the inventory process, employ tools such as our Bin Weight Calculator which allows you to weigh small bin prizes rather than counting individual items. The Bin Weight Calculator can be found in our Operational Toolkit.There are many tasks involved with Inventory Management and keeping everything straight can be difficult, especially during the busy seasons. One way to help automate and identify inventory issues is by utilizing our Rapid Reorder program. Rapid Reorder will connect to your POS software to monitor what products have been scanned out weekly.Ask your Account Manager to get you signed up for our Rapid Reorder programThe software will create a cart on our website each Monday morning based on what was scanned out the previous week. It will utilize Periodic Automatic Replacement (PAR) levels to keep a desired minimum quantity on hand. What is a PAR level, you ask?A PAR level is set by determining the minimum quantity needed to fill your display plus safety stock.A PAR level should be set for every item in your redemption center. Our team can provide suggested PAR values and you can make adjustments as needed. We will not ship your order automatically, but the creation of the cart will save you time and you can adjust the cart as needed before checking out.Inventory Management is a vital part of keeping your redemption area running smoothly and plays a pivotal role in keeping your Cost of Goods Sold (COGS) within an acceptable range. The industry standard is typically 18–22%, but every business is different. To calculate COGS, divide the dollar amount sold out of redemption by the dollar amount brought in by your games.If your inventory is a complete mess, your data including your COGS calculations will be a mess as well.By keeping your inventory clean and up to date you can be confident in your data and calculations. This also gives you the opportunity to use the plethora of reports available within your POS software to help keep your redemption area in the best shape possible.Written by: Paula ShaversPaula Shavers, MLIS is a Product Merchandising Specialist who has been with Redemption Plus since May 2022. Also dubbed our “Toy Librarian,” she has a passion for organizing and managing information. Her professional background includes collection assessment, cataloging, data analytics, and metadata architecture (she even has experience teaching fishing classes!) She is an expert at finding efficient and creative solutions to our partners’ redemption center needs. Paula is an esteemed team member here at Redemption Plus and a valued asset to our partners.