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Information about Shrinkage (accounting)

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In financial accounting the term inventory shrinkage (sometimes truncated to shrink) is the loss of products between point of manufacture or purchase from supplier and point of sale. Sometimes shrinkage may be as high as 15% to 20% of total volume, having a major negative effect on profits. The total shrink percentage of the retail industry in the United States was 1.7% of sales in 2001 according to the University of Florida's, National Retail Security Survey.[1]

48.5% of shrinkage is due to employee theft and 31.7% due to shoplifting.[2] The prevention of this type of shrinkage is one reason for security guards, cameras and security tags. Also, some shrinkage is due to damage in transit, shipping errors, or misplaced goods. When dealing with perishable goods, such as produce, natural spoilage becomes a source of shrink.

The four major sources of inventory shrinkage in the retail industry are:
  1. Employee theft
  2. Shoplifting
  3. Administrative errors (e.g. warehouse discrepancies)
  4. Vendor fraud


In the United States, the National Retail Security Survey is published annually as part of the Security Research Project at the University of Florida. The Security Research Project endeavors to study various elements of workplace related crime and deviance with a special emphasis on the retail industry.

References

1. ^ National Retail Security Survey (2002) University of Florida
2. ^ National Retail Security Survey (2002) University of Florida

See also

Aspinwall Classification System (Leo Aspinwall, 1958) classifies and rates products based on five variables:
  1. Replacement rate (How frequently is the product repurchased?)
  2. Gross margin (How much profit is obtained from each product?)

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Manufacturing (from Latin manu factura, "making by hand") is the use of tools and labor to make things for use or sale. The term may refer to a vast range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw
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For the television series, see Profit (TV series)
Profit generally is the making of gain in business activity for the benefit of the owners of the business.
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A security guard or security officer is usually a privately and formally employed person who is paid to protect property, assets, and/or people.
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Security tags is a generic name for the anti shoplifting tags retailers put on garments and other items to prevent them from being shoplifted. There are different types of security tags, including: hard plastic tags that set off alarms at the entrance of a store; alarm stickers
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Decomposition (or spoilage) refers to the reduction of the body of a formerly living organism into simpler forms of matter.

Plant decomposition

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Criminal law
Part of the common law series
Elements of crimes
Actus reus  · Causation  · Concurrence
Mens rea  · Intention (general)
Intention in English law  · Recklessness
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"E Pluribus Unum"   ("From Many, One"; Latin, traditional)
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University of Florida (Florida, UFL, or UF) is a public land-grant, space-grant, research university located in Gainesville, Florida. The university is one of 62 elected members of the Association of American Universities.
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Retail Loss prevention is a form of private investigation into larceny or theft. The focus of such investigations generally includes shoplifting, package pilferage, embezzlement, credit fraud, and check fraud.
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