Businesses lose tons of money due to theft, shrinkage, errors… The industry standard in the US was 1.52% in 2008. I will try and list all the big ones and provide tips on how to reduce these. Let me know if you have any suggestions as well.


This is the overall term for inventory lost due to theft, damage, errors…  


Items stolen.

Common Thefts

  1. Fake vendors
  2. Bad checks
  3. ‘Extra’ money stolen from cash register (overcharging customer, or any mistakes are pocketed)
  4. Charging customer, but deleting receipt
  5. Fake expense reports
  6. Employees clocking in for each other
  7. Stolen inventory, and fake records
  8. Data breach – stealing credit card info or personal info
  9. Fake payroll

How to Prevent Theft

  1. A camera system that links to the POS System.
  2. Run a background check on employees.
  3. Count cash drawer before and after every shift. The cashier can print out the Z-out report and the manager and accountant can verify.
  4. Inventory can be scanned when it arrives on a receiving voucher and scanned when it is sold. Managers / owners should verify inventory monthly or more often using an inventory scanner.
  5. Bio-metric clock in
  6. Secure computers with limited users
  7. Managers, owners, and accountants verifying everything
  8. Encrypted and secure server


Items damaged during handling / display.

How to prevent shrink due to damage

  1. Make sure products are securely displayed and stored
  2. Make sure employees are trained to handle products with care
  3. Report all damaged products to improve procedures
  4. Rotate inventory to avoid expiring products


Errors made that cost the business money.

How to prevent errors with a POS System

  1. Use barcode scanners to check in inventory, sell inventory, and count inventory
  2. Use credit card reader that integrates with the POS system to avoid mistyping a quantity.
  3. Pre-enter coupons and discounts and allow the POS to calculate the correct totals
  4. Check receipts and reports on a regular basis to ensure accuracy