Inventory Loss is the difference between actual on-hand inventory and what is recorded. It can be caused by shoplifting, employee theft, vendor fraud, incorrect data entry, or human error. inventory loss is an expensive problem for any business, as it affects profit margin, customer service, and overall performance. Regularly assessing processes and security measures can help protect against inventory loss. However, if losses do occur, proper tracking and analysis will help provide insights into how the problem can be best addressed.