• Shrinkage is observed during inventory operations. It corresponds to the difference between the theoretical accounting stock and the actual stock.

It is calculated as a percentage either of revenue or of margin.

Among the main causes of shrinkage, we can list :

  • Internal theft
  • Shoplifting
  • Vendor fraud
  • Administrative losses
  • Cash register errors
  • Inventory errors
  • Measurement or weighing errors
  • Unreported breakage

The rate of shrinkage varies depending on the business sectors.

According to some specialized sources in 2016, the rate represented 0.81% of the distributors’ revenue and reached 1.20% for department stores, representing a loss of nearly 3.5 billion euros.

These losses are distributed across 4 sectors: 44% from shoplifting, 35% from internal theft, 11% from supplier disputes, and 10% from administrative errors.

Our intervention

Since 2004, Cabinet Arnault International, through its subsidiary GIMAT, has developed expertise in combating shrinkage to assist brands and retailers in implementing action plans to reduce losses.

Our specialized teams operate nationwide to support key players in the mass retail sector by diagnosing problems and identifying tailored solutions.

Depending on the objectives defined beforehand, we can implement various types of actions :

AUDIT AND CONSULTING

Analyzing existing procedures, providing recommendations, and ensuring proper implementation

EXIT MONITORING

Monitoring staff departures from stores to verify compliance with procedures regarding merchandise purchases

Démarque inconnue - contrôle de sortie

MYSTERY SHOPPING

Investigating specific fraud indicators that may occur during chekout steps

benefits of our actions

For retailers, the stakes are high. Our intervention helps reduce shrinkage and its impact on store profitability, to optimize and reduce losses.

As part of our intervention, we gather evidence and information to defend our clients’ interests and draft reports intended for relevant jurisdictions (civil, commercial, criminal, or labor courts).

case law

According to Article L.1222-4 of the French Labor Code: “…any information concerning an employee personally cannot be collected by a device that has not been brought to their attention beforehand..”

However, employers may implement this type of devices to identify disloyal behavior, provided that the controls performed are proportional and justified by legitimate interests (Article L.1121-1 of the French Labor Code)

It is also worth recalling that theft is defined as “the fraudulent taking of someone else’s thing” (Article 311-1 of the French Penal Code). If committed in the workplace and to the detriment of the company, theft constitutes grounds for dismissal for serious misconduct (Court of Cassation Social Chamber. March 3, 2009, n°07-43222).