Shrinking Profits In Retail: Preventing Lost Inventory & Theft

In past articles in our First Security Services CALSAGA blog series, we’ve tackled a number of important topics and news items that affect the contract security guard industry. Past topics have ranged from the recent ASIS Security Conference to yearly trends in security to issues that surround security guard training and standards. Our most recent post centers on retail security and issues concerned with lost inventory, referred to in our industry as shrink.


What is inventory shrink? Keep reading for a brief explanation or click here to find out more information and learn some of the methods that businesses use to help prevent shrink.


Shrinkage is an accounting term that is used to describe any discrepancy between the received inventory and sold inventory. This is a pretty broad category and includes things like errors in paperwork, damaged items and theft. Within the category of shrink, theft makes up the largest piece of the pie and employee theft makes up a significant part of that. Many business owners, when faced with the numbers, are surprised to find out that internal theft can be as much of a drain on profits as shoplifting.


Our CALSAGA blog post details three of the main components that contribute to preventable inventory loss for businesses: shoplifting, employee theft and vendor fraud. Each method is looked at and briefly explained, including statistics and resources for further reading. Based on some of the most recent available statistics, one in 11 people shoplift from retail stores, while only 1 in 50 shoplifters are caught. Employee theft, on its own, makes up 40% of all lost inventory in the retail industry.