Shrinkage is the term used to describe any loss from inventory that isn’t due to sales. It includes losses caused by theft, damage, wastage and pricing errors. It’s a major issue for all businesses because even small losses can add up quickly. Companies need to understand how their shrinkage levels compare to industry standards, and take steps to reduce losses wherever possible in order to remain competitive. By monitoring shrinkage and implementing strategies such as improved security protocols, better stock control systems, and better staff training, businesses can limit financial losses and ensure healthy profits for years to come.