Shrinkage, dead stock and the hidden cost of not knowing
If you can’t see it, you can’t sell it
Is your stock lost, or just hidden?
Shrinkage has always been part of retail. Some stock goes missing. Some gets damaged. Some never makes it to the shop floor. Most retailers accept this as the cost of doing business. But this mindset is costing the industry significant amounts of time and money.
Because most shrinkage isn’t a theft problem. It’s a visibility problem.
Dead stock isn’t really dead
Retailers talk about “dead stock” as if it’s expired, damaged or unsellable. In reality, a surprising amount of dead stock is actually:
- Misplaced
- Unscanned
- Mislabelled
- Left in a storeroom
- Buried in a box
- Sitting in the wrong location
- Sitting in the right location but invisible to the system
It’s not dead. It’s hiding. And hiding stock is worse than lost stock—because you can still sell it.
Lost stock means lost margin
Every misplaced SKU is trapped cashflow. Every “missing” item is a sale that could have happened. Every write-off is working capital that never gets a return. Retail margins are tight enough without losing money on stock that never had the chance to sell.
This is where RFID tagging changes the equation. RFID allows retailers to track stock at the item level by location, movement, ageing and status – without relying on manual scanning or human workflow.
The real source of shrinkage
While theft absolutely happens, the industry overestimates it. A significant percentage of shrinkage comes from:
- Incorrect receiving
- Transfer discrepancies
- Staff errors
- Misplaced items
- System inaccuracies
- Incomplete or outdated stocktakes
When retailers can see their stock, shrinkage drops. When they can’t, shrinkage climbs. Visibility is the real protective layer.
Resurrect your dead stock
With real-time visibility of every item and improved accuracy, stock cannot hide in the corner unnoticed until it becomes unsellable. Dead stock is rescued before it expires, gets damaged or eventually gets lost.
This helps you:
- Reduce write-offs by identifying stock that is aging or approaching expiry
- Avoid over-ordering by ensuring you can find and sell what you have on hand
- Improve rotation of stock by batch and expiry date to move the oldest stock first (FIFO)
- Prevent misplaced inventory
RFID turns missing stock into found profit
RFID doesn’t just show you how many items you have.
It shows you where everything is. Shelf. Back room. Warehouse bay. In transit. Change room. No more hunting. No more guessing. No more “we’re not sure”. That’s a game changer for retailers.
RFID systems can also trigger automatic alerts when:
- Items are ageing
- SKUs aren’t moving
- Stock is approaching expiry
- Items are scanned in the wrong location
- Stock is slipping into “dead” status
This gives retailers a chance to act before stock value evaporates.
Shrinkage isn’t inevitable, it’s preventable
The idea that shrinkage is unavoidable is outdated. It’s the belief we held when visibility was limited. But with the RFID technology that is available today, retailers can see more, know more and act faster.
RFID exposes the truth: Most “lost” stock was never truly lost. It was simply unseen. And once you can see it, you can sell it.
If you’re ready to improve visibility to reduce stock loss and waste, talk to the RFID experts at Ramp.
