Shrink: Causes, Controls, and Responsibilities
Shrink is defined as the loss of store merchandise and/or money due to theft or inaccurate valuation of store inventory (inventory is defined as merchandise in the store intended for sale.)
There are four main types of shrink: internal shrink, external shrink, process and paperwork, and outside vendor.
Internal shrink is any shrink caused by store employee theft.
External shrink is any shrink caused by non-employee theft.
Outside Vendor theft is shrink caused by vendors/suppliers who service the store.
Process and paperwok is shrink caused by mistakes in physical inventory or how the inventory is valued.
The entire store team, including Managers, Pharmacists, Assistant Managers, Shift Supervisors, and Crew Members are responsible to watch for shrink, catch it, and stop it.
Internal shrink baseline practices are bag checks, register monitoring, employee discount and purchase monitoring, use of lockers, and cash management controls.
External shrink baseline practices are customer service, proper handling of refunds, EAS tags (security tags) on all applicable merchandise, check and charge verification, empty package monitoring, and controlled access to both the pharmacy and backroom.
Only authorized mgt. personnel are allowed to check-in or check-out a vendor/supplier.
Store Process and paperwork baseline practices include checking in all deliveries, processing damages for store credit, and recording price discrepancies.