Why cameras miss most of it
Shrink is the gap between what the books say you own and what is actually on the shelf. External theft is the largest single piece, but a big share is internal theft and plain process error, bad receiving, misscans, that no camera catches.
Reconcile the data, not just the floor
Shrink rate, the book-to-physical gap as a share of sales, only falls when point-of-sale, inventory, and supply data line up. The NRF security survey puts the average near 1.6 percent of sales, enough that a fraction of a point moves net margin.
Where the ERP closes the loop
On Hudace, point-of-sale, inventory, and receiving share one record, so Xenon AI separates true theft from phantom inventory caused by a bad receipt, and ranks exception patterns, refund abuse, voids, receiving discrepancies, for a loss-prevention analyst.
The analyst investigates and decides. The system points to where the loss actually sits.
The numbers to watch
Separate the loss that is theft from the loss that is data.
Shrink rate
(Book value - physical value) / sales. The headline loss number.
Book-to-physical gap
Difference between recorded and counted stock. Where shrink shows up first.
POS exception rate
Refunds, voids, and overrides flagged as anomalous. The internal-loss signal.
Phantom inventory
Stock the system shows but the shelf does not, from bad receiving. Often mistaken for theft.
See loss prevention on Hudace
Talk to our team about reconciling POS, inventory, and receiving on one record.