How to reduce stock losses in a pharmacy or shop.
Where stock goes missing in pharmacies and shops, how to measure it, and the controls that cut losses without blaming your team.
By the poso team · Updated
Stock losses (shrinkage) in pharmacies and shops come from five places: expiry, theft by staff or customers, recording errors, supplier short-deliveries and damage. Reduce them by recording every movement with a person attached, receiving against orders, selling first-expiry-first-out, counting high-risk items often, closing each till with a cash count, and reviewing count differences and write-offs every month.
Where stock goes
| Source | Examples | Signs |
|---|---|---|
| Expiry | Slow movers left at the back, new stock shelved in front | Write-offs at stock take, near-expiry piles |
| Staff theft | Unrecorded sales, items taken, "discounts" to friends | Cash differences, high-value items short at counts |
| Customer theft | Small high-value items lifted from open shelves | Losses concentrated in certain categories |
| Recording errors | Wrong product scanned, wrong pack size, receiving mistakes | Some products over, similar products under |
| Supplier errors | Short deliveries, wrong items, billed for more than delivered | Differences right after deliveries |
| Damage | Breakage, heat, cold-chain failures | Write-offs without a clear reason |
Measure shrinkage first
Shrinkage % = (expected stock value − counted stock value) ÷ cost of goods sold × 100, for the same period. Track expiry write-offs separately from unexplained losses, because the fixes are different.
12 controls that work
- One login per person. Every sale, receipt and adjustment is linked to someone.
- Receive against a purchase order. Check quantities and pack sizes before signing.
- Pay only for what arrived. Match supplier bills to deliveries.
- Close every till with a cash count. Compare expected and counted cash by payment method, every day.
- Limit discounts and voids. Only managers can give large discounts or cancel sales.
- Sell first-expiry-first-out and review the 90-day expiry list monthly.
- Count high-risk items weekly: expensive medicines, fast movers, cosmetics, anything small and valuable.
- Investigate every big difference within a day, while people remember.
- Record every write-off with a reason (expired, damaged, sample, theft).
- Keep valuable items behind the counter or in view of the cashier.
- Separate duties where you can: the person who receives stock shouldn't be the only one who counts it.
- Review the numbers monthly and share them with the team.
Using counts to find the leak
A count difference is a clue. If paracetamol 500 mg tablets are over and paracetamol 1 g tablets are under by the same amount, the cause is scanning, not theft. If a high-value item is short every week, and always on certain shifts, look at who was working. Software that records every movement makes this detective work quick. See how to do a stock take.
Make it about systems, not suspicion
Most staff are honest and most losses are errors and expiry. Present controls as protection for everyone: when every action is recorded, honest staff are never wrongly blamed. Share the monthly loss figure and celebrate when it falls.
Where software helps
| Control | In poso |
|---|---|
| Per-person records | Every action logged with the user |
| Receive against orders | Deliveries checked against purchase orders |
| Bills vs deliveries | Supplier bills compared to what was received |
| Cash count | Expected vs counted by payment method per session |
| Discount limits | Set per role |
| Expiry | FEFO and a 90-day list on the Home dashboard |
| Count differences | Calculated and posted, with full history per product |
See poso reports and dashboard and inventory management.
Stock loss questions
What is shrinkage in a pharmacy?
Shrinkage is the difference between the stock your records say you should have and the stock you actually have, caused by expiry, theft, errors, supplier mistakes and damage.
How do I stop staff stealing stock?
Give everyone their own login, close each till with a cash count, limit discounts and voids, count high-value items often and investigate differences quickly. Clear systems deter most theft.
What is an acceptable level of stock loss?
There is no universal figure; it depends on country, size and product mix. Measure your own rate and aim to reduce it every quarter.
How do I know whether losses are theft or errors?
Look at the pattern: errors often show as one product over and a similar one under; theft shows as repeated shortages of valuable items, sometimes linked to certain shifts.
Last updated by the poso team.