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.


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 results in lost profits and can have a dramatic impact on the success of the retail enterprise.

The term “retail shrink” or “retail   Read More


A Root-Cause Analysis May Help Reduce Shrinkage

A Root-Cause Analysis May Help Reduce Shrinkage

Most retailers have adopted omni-channel strategies to meet consumers’ demand to browse or buy whenever and wherever they choose. But enabling everything from mobile point of sale (POS) to in-store pickup of online purchases has made inventory control and product logistics far more difficult.

The complex new retail environment is increasing   Read More


Shoplifting in Fitting Rooms

Shoplifting in Fitting Rooms

Any loss prevention professional who has worked is a store that sells apparel is probably familiar with customers shoplifting in fitting rooms. But how much do you know about changing shoplifting laws, current practices to control it, public opinion, and future technologies when it comes to fitting rooms?

Records are not   Read More


What Is a Loss Prevention Manager?

What Is a Loss Prevention Manager?

What is a loss prevention manager? What might appear to be a fairly simple question now requires a much more complicated answer in a new age of retail where roles and responsibilities are changing on a consistent basis.

To the average consumer, a loss prevention manager might be perceived as a   Read More


How to Manage Inventory: Shrink Visibility

How to Manage Inventory: Shrink Visibility

At a time when store margins are under intense competitive pressure, retail shrink can make or break a retailer’s bottom line. But today’s retail shrink numbers are vulnerable to blind spots and imprecise metrics. In addition, most analysis and response to retail shrink are backward-looking: useful for staffing and long-term   Read More