Stock used internally
Samples, demonstrations, repairs and staff purchases move stock without a sale, and are the quietest source of record drift.
Every business consumes some of its own stock: a sample for a customer, an item used in a repair, something taken for a display, a staff purchase handled informally.
A metric becomes less useful when people optimise for the signal rather than the outcome. For a workplace example of how tracking measures can be gamed, see this page.
Each is legitimate. Each moves stock. Very few of them are recorded, which is why they collectively account for a large share of what later looks like unexplained shrinkage.
Give internal use a transaction type
The reason it goes unrecorded is usually that there is no obvious way to record it: the system expects a sale or a write-off and this is neither.
A named movement type — internal use, with a reason — takes seconds and turns an invisible leak into a countable figure. It also makes the total visible, which is frequently a surprise.
Businesses that start recording internal consumption commonly find it is several percent of stock movement. It was always happening; it was simply never counted.
For U.S. accounting context, IRS Publication 538 explains accounting methods and includes guidance relevant to inventories.
Samples need a rule
Sampling is a legitimate cost of sale and it accumulates without limit if nobody is counting. A stated allowance — per customer, per period, or by value — converts an open-ended practice into a budget.
Staff purchases through the till
Informal staff purchases are the arrangement most likely to cause difficulty, because they blur the line between a transaction and taking something.
Putting them through the normal process at a stated discount protects everyone, including the person buying. It also removes the ambiguity that makes shrinkage investigations uncomfortable.
Repairs and warranty consume stock too
Parts used in warranty repairs and rework leave stock and generate no sale. Where that is not recorded, the stock record drifts and — more importantly — the true cost of warranty work is unknown.
Recording it gives both: an accurate stock figure and a warranty cost that can be compared against the margin on the product.
Review the categories quarterly
Once internal use is recorded, the breakdown is informative: a product being sampled heavily, a line consuming disproportionate warranty parts, a display that is quietly expensive.
Each of those is a commercial question that was previously invisible.