Shrinkage
Shrinkage is inventory lost to theft, damage, miscounts, or administrative errors, measured as the gap between recorded and actual stock.
Why it matters for ecommerce brands
3PL contracts usually set an allowed shrinkage rate and the reimbursement value for losses above it.
Common questions
- What causes inventory shrinkage in ecommerce?
- Common causes are receiving errors, mis-picks, damage, theft, lost inbound shipments, and returns that were never restocked. Many of these are record errors rather than physical loss, which is why reconciliation matters.
Cite this entry
"Shrinkage." Fulfillment Lexicon, last reviewed October 16, 2026. https://fulfillment.wiki/glossary/shrinkage/