9 Tips to Prevent Inventory Shrinkage in Convenience Stores

9 Tips to Prevent Inventory Shrinkage in Convenience Stores

How Inventory Shrinkage Can Hurt Your C-Store Business?

Inventory shrinkage means – the loss of physical inventory or stock shrinkage in your C-stores due to various reasons. It is a common problem that many C-Store owners face every day.

What Are the Causes and Consequences of Inventory Shrinkage?

Some of the factors that can cause inventory shrinkage in your C-store are shoplifting, employee theft, types of lottery theft, inventory management errors, poor recordkeeping, invoice mistakes, operational changes, vendor fraud, or misplaced items. Inventory shrinkage can affect your C-Store’s profitability and performance in many ways.

According to the National Retail Federation, the most common cause of inventory shrinkage in the retail industry is shoplifting, accounting for 35.7% of the total shrinkage. The second most common type of shrinkage in retail or causes include employee theft; which makes up 33.2% of the total shrinkage in retail!
Some of the effects of inventory shrinkage in retail stores or your C-Store are:

Reduced Revenue

If your cash register is consistently short, or your merchandise is damaged or stolen, you will lose money, and see a reduction in your profits.

Limited Purchasing Power

Lower revenue may affect your ability to pay your bills on time. Some vendors may reduce your credit limit, demand payment upfront, or stop supplying you. If that happens, you may not be able to maintain enough stock in your C-Store or invest in new technologies to improve customer service or loss prevention. This can lead to lost sales and thereby, lower revenue.

Poor Customer Service

Customers come to your C-Store to get specific items they want, so if they are out of stock, you will lose business. And, over time, you will lose loyal customers.

Lost profit

With narrow profit margins in the C-Store industry, inventory shrinkage can make a big difference between making a profit or operating at a loss. And, any prolonged period of being unprofitable can have negative impacts on your business and your employees. 
The good news is that you can prevent or reduce inventory shrinkage in your C-Store without spending a lot of money. But it requires attention to detail, consistency, and determination to succeed.

How to Train Your Employees, and Organize Your Products to Reduce Inventory Shrinkage?

  1. Theft is the main cause of your inventory loss, so you need to train your employees to spot shoplifters, and deter them. You can teach them some common shoplifting techniques, and how to recognize them. You should also ask them to greet customers verbally so that potential thieves know they are being watched in your C-store. 
  1. You can also prevent theft or damage by placing your products strategically on your shelves. Keep expensive items in a locked case, or near the back of your C-store. Put heavier and bigger items on lower shelves, so they are easier to reach or move when needed. You should assign some employees to handle the incoming and outgoing stock items, and limit access to other employees. 
  1. These employees should be experienced and familiar with your C-store operations. They should check the items received against the order sheet, not the shipper’s packing list, to ensure accuracy. These employees will be your best source of information if you have any questions about your inventory.
  1. You should also double-check all inventory counts to avoid errors. That means you should verify purchase orders, invoices, shipping receipts, and packing lists before you file them. Errors often happen during the receiving process or when you use different systems to manage your inventory, so take the time to double-check your processes.
  2. A good inventory tracking system will help you keep your products fresh and organized. You’ll know which products are selling well and which are not. Moreover, you can even change your sales strategy and pricing to avoid product spoilage. Use a single automated inventory management system, such as Hisably retail store inventory management software or C-store back-office software application system, to reduce errors and manage your inventory more effectively — and in real-time. Data Integrity when Adding Multiple UPCs that help track the inventory of units in real-time.
  3. You can reduce shrinkage in your C-Store by reviewing transactions in daily sales reports in front of your employees. This will show them that you are attentive to the details and discourage them from stealing from you. If you notice any suspicious transactions, address them quickly, so employees know you are serious about preventing and stopping employee theft. Generating and reviewing Key reports to manage your C Stores also acts as a deterrent for such instances.
  4. You can also give each employee a password or number for the register. This will allow you to track which employees may be stealing from you and which ones may need more training. For example, you can check refunds or voids by employee number. Then, talk to the employee about the situation to find out if it was a mistake or a theft. 

    “You can also install fire detection and other prevention systems in your storage areas. And check these systems regularly to make sure they are working properly. You may need to hire a professional to make sure all the systems are connected correctly and function as intended.”
  5. You can also invest in security systems to monitor employee and customer areas. You can simply install video cameras in strategic locations in your store, such as over the cash register, facing the customer at the counter (or lottery counter), in the stock room, or employee break room — and watch them carefully. Using such Automation technology in C Store operations strongly discourages thieves from stealing from your C-store.
  6. But if you integrate these video cameras, you will have real-time, factual data to help you detect theft and identify employee training needs. Plus, you can also use this information to verify all age-specific transactions, such as tobacco and alcohol.


Shrinkage is a common problem that can affect your store’s performance and profitability. But you don’t have to let it ruin your business. Using a C Store office software benefits retailers for shrinkage prevention in stores such as Hisably eliminates inventory shrinkage. By following these tips, you can take charge of your shrinkage control and run your store with confidence. 

You will see the benefits of your efforts in the long run, as your profit margins will improve and you will have more time and resources to focus on the things that matter most to you and your customers. You will also be able to explore new and innovative ways to create profitable relationships with your customers and make them loyal and satisfied.

What Does Hisably Do?

Hisably a fully-featured C store back office software for managing your convenience store’s bookkeeping. Use it to manage lottery sales, monitor financial transactions, and get instant data on cash flow.

Start Your 30 Day FREE TRIAL

Risk-Free. No Credit Card Required. No Contract.