Inventory shrinkage hurts margins quietly. It may show up as missing items, unexplained adjustments, damaged goods, miscounts, or stock levels that do not match what the system says should be available.
Reducing shrinkage starts with visibility. If the business cannot see where stock is moving, it is hard to know where the loss is happening.
What causes shrinkage
Shrinkage can come from several places:
- Theft or loss
- Damaged goods
- Receiving mistakes
- Counting errors
- Sales or returns entered incorrectly
- Inventory adjustments made without review
- Items used internally but not recorded
Not every issue is fraud. Many shrinkage problems are process problems.
Step 1: Keep receiving accurate
Inventory accuracy starts when goods come in. If receiving is rushed or entered later, the system may be wrong before items ever reach the shelf.
Good receiving should capture quantities, cost, vendor information, and exceptions clearly.
Step 2: Connect sales to inventory
When sales update inventory automatically and consistently, there are fewer gaps between what happened at the counter and what the stock report says.
If sales are handled in one system and inventory in another, shrinkage becomes harder to isolate.
Step 3: Review adjustments
Adjustments should not disappear into the system without review. Managers should be able to see who adjusted stock, why, and which items are frequently corrected.
Step 4: Count strategically
Full physical counts are useful, but cycle counts and targeted reviews can catch problems earlier. Focus on high-value items, fast-moving products, and items with repeated discrepancies.
How Brisk helps
Brisk helps connect POS, inventory, purchasing, receiving, and reporting so businesses can identify inventory problems sooner. Better visibility makes shrinkage easier to manage and reduces the amount of guesswork.
Related reading: Retail Inventory Management Made Simple and Why Your Inventory Is Always Wrong.
Final thoughts
Shrinkage is easier to reduce when inventory activity is recorded consistently and reports are reviewed from connected data.
Want better inventory control? Contact Brisk.