Inventory shrinkage in retail represents the disparity between recorded stock levels and the actual physical inventory. This discrepancy encompasses losses from theft, damage, errors, or other factors leading to a reduction in available stock. Retailers vigilantly monitor inventory shrinkage to pinpoint its causes, implement effective loss prevention strategies, and maintain accurate stock records. Mitigating inventory shrinkage is vital for bolstering overall profitability and aligning available products with customer demand.