How do I reduce retail shrinkage?
Retail shrinkage is the gap between what your books say you own and what is actually on the shelf. Small-store owners usually treat it as “theft,” but a large share is process — receiving mistakes, unrecorded damage, markdown slips, and sloppy counts. Fix attribution first; then tighten theft-prone moments.
Short answer
Attribute a month of variance before buying more gear. Blind-count deliveries, same-day damage and markdown recording, and regular cycle counts on high-risk SKUs. Review voids, refunds, and no-sales by associate. Use cameras to confirm exceptions — not as a substitute for inventory discipline. Cafe owners with a till-short problem are in a related cash cluster; retail shrink is broader inventory + cash.
Separate process shrink from theft
- Receiving — count against packing slips before putaway; don’t accept “we’ll fix it later.”
- Markdowns & damage — book them the same day they leave sellable stock.
- Returns & transfers — document every move; sweethearting often hides here.
- Cycle counts — rotate A-items more often than the annual stocktake surprise.
When it looks like theft
Patterns in voids, discounts, refunds, or stockroom exits still need fair process — see prevent employee theft in a retail store and the cafe/restaurant twin prevent employee theft in a restaurant. Cameras help when paired with POS timestamps: cameras vs POS for employee theft.
See shrink exceptions without living in inventory spreadsheets
SoraData soft-connects existing cameras and POS so floor and till exceptions are easier to review when you coach the shift. Request a trial or view plans when it fits — no invented shrink percentages.