Most retail businesses take a physical inventory of stock only once or twice a year, and when the count is completed, the difference between the inventory on hand and what it should be according to purchase and sales records is called “shrinkage”.

Shrinkage is due to employee theft, shoplifting, and paperwork error. The total shrink percentage of the retail industry in the United States was 1.52% of sales in 2008 according to the University of Florida's, National Retail Security Survey. An estimated 44% of shrinkage in that time period was due to employee theft, totaling over $15.9 billion. 35% of 2008 shrinkage was due to shoplifting, totaling over $12.7 billion. The prevention of this type of shrinkage is one reason for security guards, surveillance cameras and security tags.