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Shrink and Loss Prevention Program

Loss prevention program covering how the facility defines and measures shrink, separates paper loss from physical loss before investigating, controls the physical perimeter and the points where product can leave, sets access and package-check rules that apply to everyone including management, investigates suspected theft in a way that survives review, and reports shrink by cause to customers and management so the response matches the actual loss rather than the loudest suspicion.

Audience
The general manager, the operations manager, the inventory control lead, the loss prevention or security owner, and the supervisors who control access, keys, and the outbound gate
Review cycle
annual
Last reviewed
2026-08-29
Revision
1

What is in the procedure

8 sections. Regulatory language is fixed and passes through verbatim. Sections marked customized get rewritten around your facility, your equipment, and your job titles.

  1. 01

    Purpose

    Fixed

    This procedure defines how the facility prevents, detects, measures, and investigates loss of product, whether that loss is theft, process error, damage that was never recorded, or paperwork that never matched reality.

  2. 02

    Scope

    Customized

    This procedure applies to all product in the facility, whether owned by the facility or held for a customer, and to facility assets such as tools, equipment, batteries, fuel, packaging supplies, and scrap with resale...

  3. 03

    Responsibilities

    Customized

    The loss prevention owner runs the program: maintains the access and key registers, reviews camera coverage and retention, runs the shrink report, and leads or commissions investigations.

  4. 04

    Procedure: Perimeter, Access, and the Points Where Product Can Leave

    Customized

    1. Product can only leave the building through a controlled point.

  5. 05

    Procedure: Measuring Shrink and Separating Paper Loss from Physical Loss

    Customized

    1. Shrink is defined before it is measured.

  6. 06

    Procedure: Investigating Suspected Theft

    Customized

    1. An investigation opens when unexplained loss survives the paper research, when a specific report or observation is made, or when a control failure is found such as a defeated lock, a disabled camera, or a missing...

  7. 07

    Awareness, Deterrence, and Program Review

    Customized

    1. Every employee, temporary worker, and contractor is briefed at orientation on the access rules, the package check rule, the belongings rule, and how to report a concern, and signs that they received the briefing.

  8. 08

    References

    Fixed

    The facility access, badge, and key registers, reconciled against the active roster.

Best practice

Shrink and Loss Prevention Program: no regulation to cite

No public-domain regulation governs this procedure, so it cites nothing rather than inventing authority. It documents the process discipline customers, insurers, and auditors ask to see in writing.

Compliance checklist

What an inspector looks for

  • Every point product can leave the building is identified and has a named control, and doors other than active dock doors are found closed and secured on a walk

  • The access, badge, and key registers are current, reconciled against the active roster within the stated period, and access was removed on the day of each departure or role change

  • The package and bag check rule is posted, applied to everyone including management and visitors, and the check record shows consistent application

  • Trash, cardboard, and scrap are inspected before compaction or pickup, and the compactor and baler area is covered where cameras exist

  • Camera coverage matches the documented map, retention meets the stated period, and the quarterly verification confirms each camera still shows its intended view

  • Shrink is calculated by a written formula with a stated unit, period, and target, reported per customer where inventory is customer-owned, and shown as a trend

  • Adjustments carry reason codes that separate paper loss from physical loss, and only the unexplained residue after research is treated as potential physical loss

  • Every open and closed investigation has a case record with preserved footage and logs, an appointed investigator outside the affected reporting line, and HR involvement in any employee interview

  • No employee is instructed or expected to confront, detain, or pursue a suspected thief, and only the general manager escalates to law enforcement, the insurer, or the customer

  • Every investigation closed with a written finding and a corrective action on the control that failed, whether or not theft was confirmed

  • All employees, temporary workers, and contractors received the loss prevention briefing at orientation and signed for it, and a confidential reporting route is posted

  • The quarterly program audit was completed, findings were logged as corrective actions, and the shrink trend was reviewed with management and the affected customers

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This page is informational and is not legal advice. Have a qualified safety professional review any procedure before it goes into service at your facility.