Causes of Inventory Shrinkage

Two-Thirds of Losses Still Come from Theft

The National Retail Survey, commissioned by the Retail Industry Leaders Association, attempts to

develop a definition of Total Retail Loss that enables retailers to better understand the difference between inventory events considered to be the “costs” of doing business, and those which can be regarded as true shrinkage “losses.” Here are the main causes of inventory shrinkage according to the latest National Retail Survey.

Causes of Inventory Shrinkage – According to the annual National Retail Survey:

Shoplifting/external = 36.5 percent

Employee theft/internal = 30 percent

Administrative and paperwork error = 21.3 percent

Vendor fraud or error = 5.4 percent

Unknown loss = 6.8 percent

So, best to prioritize your theft prevention actions where they’ll have the most impact. Shoplifting from both external and internal sources are the key to loss prevention management. Invest accordingly.

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