Tag: retail shrink

In the retail environment, the term “shrink” or “shrinkage” refers to the difference between the amount of merchandise (or inventory) that the company owns on its books, and the results of a physical count of the merchandise. Shrink can come in many forms, and impact a business in many different ways. The primary causes of retail shrink include operational errors, internal issues, and external losses.

• Operational errors can involve POS software glitches, paperwork issues and other operational missteps. These incidents typically occur when processing a transaction, receiving merchandise, shipping merchandise, or taking inventory.

• External losses can involve theft by customers (primarily shoplifting), issues involving vendors, or other incidents that pertain to those not working for the company.

• Internal losses are the result of incidents that involve store associates and other company employees who take advantage of opportunities to steal from the company.

In addition to theft issues, damage, waste and spoilage can directly contribute to a company’s losses.


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When merchandise is stolen or otherwise unaccounted for, it not only impacts the company as a result of the missing product, but also skews our inventories in other ways. This not only impacts current sales, but also affects product replenishment and future sales as well. This can have a significant impact on the bottom line, and a direct influence on the health of the company. Every year, shrink issues cost retail businesses tens of billions of dollars. This is a real and growing problem that affects all of us in a variety of different ways.

This is a much more complicated problem than simply accounting for the theft of merchandise and the direct loss of profits. Managing shrink is a critical aspect of inventory control, which involves the management of the supply, accessibility, storage, and delivery of the company’s goods. As a result, retail shrink reduction strategies require a multifaceted and broad-based approach in order to successfully manage the process.


Controlling Retail Shrink in Stores with No Loss Prevention

Controlling Retail Shrink in Stores with No Loss Prevention

A question frequently asked by retail customers—and even some loss prevention professionals just getting started in their careers—involves many of the smaller stores where they shop, and how shoplifting and other retail shrink concerns are managed in retail stores with no loss prevention team.

First, few retail companies actually attempt to   Read More


Target Store Loss Prevention Programs

Target Store Loss Prevention Programs

Target store loss prevention programs are a key approach to help us to drive down shrink at stores that experience the highest loss rates. They are designed to focus our resources on the areas of the company where losses are highest. Certainly, the most compelling reasons to implement a high-shrink   Read More


Bad Packaging Design Can Lead to Shrink

Bad Packaging Design Can Lead to Shrink

Few things are as frustrating for a loss prevention leader than discovering a bad packaging design they know will promote retail shrink, which could so easily have been prevented if those who created and approved the packaging had included shrink reduction in the initial design criteria. For example, in a   Read More


Analyzing the Sufficiency of Retail Shortage Control Measures

Analyzing the Sufficiency of Retail Shortage Control Measures

Today’s retail environment is as competitively challenging as ever. The retail sector of our economy is in constant change, moving with evolving technology, adjusting to consumer demands, and anticipating trends. The bedrock upon which healthy retailers are built is the supply chain that provides the goods to be sold. A   Read More


Essential Inventory Control Techniques

Essential Inventory Control Techniques

Most retail companies have a department dedicated to maintaining processes and procedures related to inventory management and retail shrinkage. The inventory control department ensures that optimum inventory levels of products are available and accessible to the stores; that stock levels/turnover are efficiently managed; that inventory is maintained in a safe   Read More


How to Calculate Shrinkage in Retail

How to Calculate Shrinkage in Retail

Understanding how to calculate shrinkage in retail is a fundamental but critical concept within the loss prevention profession as well as throughout the retail industry. Ultimately, retail shrink directly results in lost profits, and can have a dramatic impact on the success of the retail enterprise.

The term “retail shrink” or   Read More


A New Chapter in Retail

Following are a few article summaries that can provide you with a small taste of the original content available to you every day through our daily digital offerings, which are offered free through LossPreventionMedia.com. In addition to our daily newsletter, a comprehensive library of original content is available to our   Read More