In the retail world, shrinkage, or shrink, is the term used to describe a reduction in inventory due to shoplifting; employee theft; administrative errors such as record keeping, pricing, and cash counting; and supplier fraud. There's also a fifth category of shrinkage, which represents all of the unidentifiable reasons for loss in your store. A common misperception is that retailers absorb shrinkage as part of the cost of doing business. While retailers have to factor loss into their bottom line, it's a costly problem for all.
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Source: (thebalancesmb.com)
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