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I'm updating a training manual and need to define loss (in the context of a business) in a simple sentence. Currently it reads as (previous author):

Loss: Loss is profit loss due to product theft, damage, or sold at the incorrect price

I'm not sold on the overall wording, thinking along the lines of:

Loss: Loss is unmade profit due to the theft, damage, or incorrect sale of a product.

Two things:

  • 1: I feel like 'unmade profit' isn't 100% correct English - is that the case? Or if nothing else, it feels like a stumbling block.
  • 2: Incorrect sale doesn't carry with it that the product was priced incorrectly and sold at this wrong price. Yet to say "due to the theft, damage, or incorrectly marked and sale of a product" seems too lengthy to be part of the 3 facets of profit loss. Is there a single word (like theft, damage) that wraps 'incorrect price and sale of', so I can say "due to the theft, damage, ? of a product" ?
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6 Answers 6

up vote 7 down vote accepted

I believe the quoted definitions are technically correct. However, in keeping up with the spirit of the question, I would make the following suggestion.

Loss is the unrealized revenue due to theft, damage, or inaccurate and imprudent pricing of the product.

I would go for revenue in place of profit, for the simple reason that a stolen product not only negates the expected profit but does not break even the manufacturing cost.

I believe inaccurate pricing would refer to the incorrect sales tags while imprudent pricing would concern with the wrong judgement on behalf of the concerned sales management.

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"Unrealized" is an excellent suggestion. –  KitFox Jun 8 '11 at 22:31
    
Some really answers overall guys. But this is the most suitable to my needs –  Chris Jun 8 '11 at 22:56

Not sure if it applies elsewhere, but the standard industry term in the UK is wastage, not loss.

I can't find an actual online definition, but I'm pretty sure wastage normally covers exactly and only theft, damage, and errors at point-of-sale, plus sometimes 'spoilage' of goods which were ok when delivered, but deteriorate in some way before being sold.

Companies don't usually like to be explicit about it, but in general wastage is preventable loss caused by undesirable employee action (or lack of desirable action, if they're simply not doing what they're supposed to).

Normally, wastage specifically doesn't include supplies which were defective when originally delivered, as that is accounted for separately (because it needs to be dealt with completely differently, on the supply side).

Your definition should therefore be...

Wastage: Unmade profit due to theft, damage, and point-of-sale errors.

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I heard the term wastage in the convenience retail business in the US. I'm not entirely sure I know what it covers though (it was one of the reports they wanted me to generate by comparing inventory and sales data). –  KitFox Jun 9 '11 at 19:02
    
@Kit: I'm pretty sure 'wastage' in the UK is applicable to any retail business (building supplies merchant, for example), but I think it's particularly used in food outlets, supermarkets, convenience stores, & the like. But as I said, particularly where it's really just a euphemism for "crap staff". I would be surprised if the guy running my local 7-11 talked of 'wastage' in his business - he's Asian, and most of the staff being close family or at least relatives, as is common over here. But it certainly applies in Asda (US Walmart). –  FumbleFingers Jun 15 '11 at 2:28

The accounting term for this in the US is inventory shrinkage

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Replacing one jargon term with another, possibly foreign, jargon term doesn't really help the OP. –  choster Oct 27 at 18:23

"profit loss" is technically more correct in business, because in order to lose something, you need to earn it. "loss" as in business, is when you lose something that you have earned (and pretty much everywhere else in life) so there's nothing wrong with "profit loss".

A suggestion would be:

Loss: An unmade profit due to theft, damage, or fault in sales

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So 'unmade profit' is an acceptable phrase? To be honest, I'm not convinced that fault carries the right implications - I like it, and appreciate the answer, but not sold on it. –  Chris Jun 8 '11 at 22:20

You could say that loss is "an opportunity to make a profit that was missed, due to theft, damage, or underpricing."

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How about loss,

Loss is potential profit, not realized because of product theft, damage, or sale at an incorrect price.

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