Inventory shrinkage is a persistent challenge for retailers, where actual inventory is less than recorded amounts, primarily due to theft, damage, or errors. This issue impacts profitability and increases product costs for consumers. It can be categorized into three types: loss (theft), damage (goods destroyed or impaired), and operational mistakes. Though shrinkage is often unavoidable, effective measures, including enhanced security and regular audits, can help reduce its financial impact on businesses and improve overall inventory management.
Inventory shrinkage is an unavoidable issue in retail that significantly affects profitability, often due to theft, damage, or system errors.
Effective protocols like improved security, regular audits, and durable protection materials help mitigate the negative impact of inventory shrinkage.
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