Two Types of Shrinkage, Two Detection Approaches
Internal theft and supply waste both compress margins, but they require different detection mechanisms. Internal theft leaves a behavioral signature in transaction data—voids, overrides, discount patterns, cash variance. Supply waste leaves a financial signature in spend-to-revenue ratios. Ezra applies the right detection model to each type of shrinkage simultaneously.
Behavioral Detection for Internal Theft
Ezra Loss Prevention monitors transaction data in real time, flagging the behavioral patterns associated with internal shrinkage: excessive voids, manager overrides outside normal parameters, discount percentages above threshold, and cash variance. Each flag surfaces as a triaged alert with direct links to the source POS record.
Financial-Proxy Detection for Supply Waste
Ezra Inventory tracks supply spend as a percentage of relevant revenue, calculates trailing averages, and flags exceptions where spend-to-revenue ratios deviate from established baselines. This approach catches supply waste without requiring perfect physical inventory infrastructure.
The Compounding Cost of Undetected Shrinkage
The cost of shrinkage isn't just the immediate loss—it's the compounding effect of undetected losses accumulating over months. A 2% shrinkage rate running for 12 months at a 10-location franchise averaging $400,000 per location represents $80,000 in losses. Detecting it in month 2 instead of month 12 recovers $65,000 of that exposure.
Network-Wide Shrinkage Visibility
Ezra provides network-level shrinkage visibility—ranking locations by risk, identifying the units with the highest anomaly density, and surfacing the patterns that are most likely to represent ongoing losses rather than one-time exceptions.