Damage and Loss Report Checklist

Pick the category that drives downstream handling: shoplifting / ORC, internal theft (sweethearting, refund fraud), vendor short-ship, freight damage, in-store breakage, or unknown shrink found at cycle count. Categorization drives whether this routes to LP, the buyer, or insurance.

Note store number, department or fixture (end-cap, four-way, stockroom bay), and the closest known time window. For ORC, tie the window to the CCTV timestamp on the DVR or Verkada cloud — clocks drift, so log both.

Shoot wide (fixture in context), medium (the affected SKU group), and close (the damage itself with a ruler or a coin for scale). Insurance adjusters and vendor reps will reject claims supported by a single blurry phone shot.

Plain-language account of what happened, who was on shift, what was discovered, and any suspected cause. Stick to observed facts; speculation about employees by name is a labor-relations risk if the report becomes discoverable.

Get a signed or initialed statement from each employee or customer who saw the incident — name, role, what they observed, time. Memory degrades fast; statements taken more than 48 hours out are markedly less useful to the LP investigator.

In Lightspeed, Shopify POS, NCR Counterpoint or your system of record, mark the units as damaged/quarantine so they cannot ring at checkout and cannot allocate to BOPIS or ship-from-store orders. Quarantine before adjusting on-hand — otherwise web inventory may briefly oversell.

Use the correct adjustment reason code (Damage, Theft-External, Theft-Internal, Vendor-Short, Breakage) so the shrink report rolls up cleanly at month-end. A generic 'adjustment' masks the trend the loss-prevention team needs to see.

Sum cost (for shrink P&L) and retail (for lost-sale tracking). For seasonal or already-marked-down goods, use current ticket — not original MSRP — to avoid overstating the loss in financial logs.

Most commercial policies carry a deductible of $1,000–$10,000. Losses below the deductible aren't worth the claim — they only drive premium increases at renewal. Confirm the threshold with your broker before filing.

LP officer reviews the exported clip. Look for EAS-bypass technique (booster bag, foil-lined), refund fraud patterns at the register, or freight-handling that broke the case. Note time-stamped findings against the incident number.

Which SOP failed? Receiving piece-count skipped, EAS tag missing or not deactivated, cash drop overdue, fitting-room sweep skipped, refund processed without manager approval. Name the specific control, not 'training'.

Most commercial property policies require notice within 30 days; some specify 'as soon as practicable'. Call the broker, then send the written notice with the incident number, date, location, and cost estimate to start the clock.

Adjusters expect: incident narrative, photos, CCTV clip if applicable, police report number for theft, SKU list with cost, and the shrink ledger entry. Missing any one of these is the most common cause of claim delay.

DM gets the incident number, dollar impact, suspected cause, and the corrective action. For losses above the store-manager authority threshold (commonly $500 or $1,000), DM sign-off is required before the shrink adjustment posts.

Send the cost figure, the GL account, and the incident number to AP/accounting so the shrink hits the right period. Cross-period adjustments at month-end are the most common reason inventory and P&L disagree.