Definition
Shrinkage
Inventory that was purchased but cannot be matched to recorded sales, documented waste, or transfers for a defined period and scope, the residual after known movement.
Formula
Shrinkage = actual usage − projected usage − documented waste
Worked example
A liquor store counts 40 bottles of a $45 whiskey at open and 28 at close, receives 0, sells 9 per POS. Actual usage 12; projected 9; waste 0 → shrinkage 3 bottles ($135). Pattern over three weeks on the same SKU is the signal, not a single noisy count.
When operators use this
Treat shrinkage as the leftover after sales, documented waste, and transfers. how to reduce liquor shrinkage is the playbook. bar shrinkage prevention is the product page. When a later window shows a lower loss rate on the same SKU, that dollar improvement is verified recovery, not a projected annual savings claim. Require two clean counts before you celebrate.
Common mistakes
Publishing a single shrink percentage for all bars is consultant folklore. Counting error, a missed transfer, and a stolen bottle look identical in one residual. Do not annualize one good week into a marketing number. Do not accuse from one noisy count. inventory variance is the investigation queue that comes first.
How ExactPour handles it
ExactPour reconciles physical counts to POS sales by product, flags high-loss SKUs, and keeps reason-coded history. Bars see over-pour style gaps; retail package stores see shelf-to-register shrink on the same engine.
Qualification
Shrinkage is a residual measurement, not a diagnosis; counting, receiving, recipe, and mapping errors appear inside it alongside physical loss.