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What Is Inventory Shrinkage?

Inventory shrinkage is the loss of inventory due to theft, damage, or tracking errors, with industry-typical 0.5-2% annually for warehouse operations. United States Pallets supplies new, recycled, custom, and ISPM-15 heat-treated pallets to commercial buyers in all 50 states, with a 50-pallet minimum order and a written quote target of under 2 business hours.

Resource: Encyclopedia
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Inventory shrinkage is the loss of inventory due to theft, damage, or tracking errors, with industry-typical 0.5-2% annually for warehouse operations.

New pallets in bulk warehouse stock yard

Definition

Inventory shrinkage is the loss of inventory due to theft, damage, or tracking errors, with industry-typical 0.5-2% annually for warehouse operations.

Detailed Explanation

Shrinkage causes: external theft, internal theft, damage, miscount, paperwork errors. Mitigation: cycle counting, security cameras, RFID, employee training. Major retailers report shrinkage in annual filings.

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