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.

Scan each UPC into the report — handwritten SKUs get transposed and break the variance investigation later. Include on-hand before the loss and quantity affected for each line.

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.

Export the relevant window from Sensormatic, Verkada, Solink, or whatever DVR is in use — most systems overwrite on a 14–30 day loop, so don't rely on it being there next week. Save the clip with the incident number in the filename and store in the LP case folder.

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.

Damaged units left on the floor or in active stockroom bays get re-stocked or sold by accident. Bag, tag with the incident number, and stage in the damage cage pending RTV decision or disposal.

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.

Post the entry to the shrink ledger that accounting uses to reconcile inventory at month-end close. Include the incident number so the GL entry traces back to this report.

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'.

Concrete action with an owner and a date: re-train cashiers on refund approval, add EAS source-tag check to receiving SOP, install a hard tag on high-shrink SKU, schedule fitting-room sweep at top of every hour. Vague 'tighten procedures' is not a corrective action.

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.

For freight damage or vendor short-ship, raise the RTV / chargeback per the vendor agreement window — most vendors deny claims received more than 30–60 days after delivery. Attach the signed BOL and the receiving piece-count discrepancy.

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.

Final sign-off by the store manager once corrective action is in place, insurance claim is opened (or formally declined), and inventory is reconciled. The case stays in the LP folder for at least 3 years for audit and trend analysis.