ECONOMICS

Detailed explanation-1: -Shrinkage is the loss of inventory that can be attributed to factors such as employee theft, shoplifting, administrative error, vendor fraud, damage, and cashier error.

Detailed explanation-2: -The Main Causes There are four main causes of shrinkage: shoplifting, employee theft, administrative errors, and fraud. Understanding how shrinkage happens in retail stores is the first step in reducing and preventing it.

Detailed explanation-3: -Shrinkage is an accounting term used to describe when a store has fewer items in stock than in its recorded book inventory. Factors contributing to shrinkage include employee theft, shoplifting, administrative errors, vendor fraud, product damage, and more.

Detailed explanation-4: -Impacts of Shrinkage Shrinkage increases a business’s cost of goods sold (COGS) and reduces its profit margin.