The latest Mr CCTV blog post concerns stock shrinkage and why cutting down is essential for the longevity of a business. This article will delve deeper into what exactly stock shrinkage is, how it manifests itself in business and suggest a few practical solutions to the stock shrinkage problem and how businesses can combat it and enjoy more profits.

What is stock shrinkage?

The loss of inventory, simply put, is known as stock shrinkage. In broader terms, stock shrinkage is the phenomenon of excess inventory being listed on the books or accounting records of a business that actually no longer exist in the physical inventory.


There are a number of factors that cause stock shrinkage including employee theft, damage, supplier fraud, administrative errors or mishaps that occur when inventory moves from one location to another. When inventory shrinks, the overestimated physical stock can no longer be used to generate profit for your business resulting in losses.


Inventory shrinkage is a serious problem for companies that carry physical stock and it can be costly. Without the proper checks and measures in place, stock shrinkage can also be detrimental to your bottom line.  If you own a company that stocks inventory, seriously consider implementing practical and software solutions that may prevent stock shrinkage from becoming an unmanageable problem.

Practical ways to cut down on stock shrinkage

  • Fence off warehouse area.
  • Install surveillance cameras throughout your property.
  • Monitor rubbish removal procedures using video surveillance.
  • Conduct frequent stock audits.
  • Implement employee training & education to reduce inventory damage resulting from negligence.
  • Educate employees on inventory management systems.
  • Allow only authorised personnel into warehouses using access control


The steps taken to minimize shrinkage will ultimately depend on the type of issue your business is facing most frequently. For instance, if you believe the cause of your inventory problems is employee theft, installing surveillance cameras might be a prudent course of action. Security cameras are particularly effective in the retail space and CCTV technology from Mr CCTV is a convenient video surveillance solution to this end.

Eliminating administrative errors that result in stock shrinkage

Miscalculations by administrative staff are a reality and they lead to stock shrinkage problems in many businesses. Switching to an inventory management software program incorporating barcode scanning and other automated features has the following benefits:

  • Standardized, repeatable processes that track the movement of inventory.
  • Cuts down on manual (human) errors.
  • Helpful in reducing the number of products lost due to spoilage since it facilitates a better rotation of stock.

It is clear that cutting down on stock shrinkage should be a top priority for any business, not least of which those with warehouses and physical stock. Controls and monitoring systems that keep track of stock levels in a company are crucial in avoiding revenue loss. Security cameras or video surveillance solutions aid in combating issues of theft, whereas having more sophisticated software systems in place can dramatically reduce stock shrinkage immediately. An integrated solution including both of these methods would be first prize.