What it means
Shrinkage is the gap between the stock that leaves your shelf and the money that comes in for it. It's normally expressed as a percentage of sales or of stock value over a period.
The two kinds
It helps to split shrinkage in two, because they have different fixes:
- Unpaid takings — items a guest took without paying, almost always because paying was awkward, the price was missing, or they meant to settle later and forgot.
- Wastage — stock that expired, spoiled or broke before anyone bought it, which is a stocking and rotation problem.
Why it matters
Shrinkage is the number that tells you whether your honesty shop is quietly leaking money. A small, steady figure is a normal cost of the trust model. A rising figure usually means something specific broke — a payment method stopped working, a label fell off, or perishables are being over-ordered.
How to reduce it
Make paying a single tap, put a price on every item, keep the shelf tidy and in date, and match perishables to occupancy. See reducing shrinkage without CCTV, locks or friction — and note that cameras rarely move this number, because the cause is usually friction, not dishonesty.
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