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Retailers struggle as theft hits all-time highs (and it’s not kids at fault)

(BUSINESS NEWS) Cutting corners leads to a rise in sticky fingers: why retailers continue to struggle as theft climbs.

retail theft

An uphill battle

One problem that every retailer deals with is shrinkage, or the loss of inventory. The annual National Retail Security Survey from the National Retail Federation was just published and one its key findings was that retailers are spending less on loss prevention. To understand why that’s a bad thing, you have to know the rest of the story.

According to the survey, which is in its 26th year, the average inventory shrink rate increased to 1.44 percent of all sales. Doesn’t sound like a lot until you put it into dollars – $48.9 billion lost each year. Yes, that is a “B.”

Closer look at loss

Inventory shrink breaks down this way:

  • Shoplifting 36.5%
  • Employee theft 30%
  • Paperwork or administrative errors 21.3%
  • Vendor fraud or error 5.4%
  • Unknown loss 6.8%

The conclusion of the survey was that stores should not be decreasing their spending on loss prevention, because shrinkage is at an all-time high. One caveat, this year’s survey was sponsored by the Retail Equation, a company which deals with loss prevention.

Who is really footing the bill

In 2015, employee theft accounted for 43 percent of lost revenue, or about $18 billion. Who pays for this? Businesses and shoppers alike. Fortune estimates that shrinkage costs each U.S. household about $400 annually. But it doesn’t just cost the shoppers. Shoplifting burdens the courts and police. Stores have added expenses for security. Communities are affected in the loss of sales taxes on said merchandise.

When did it become okay to steal from a business or employer? According to the National Association for Shoplifting Prevention, only about 3 percent of shoplifters are “professionals.”

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The majority of shoplifters are adults, who don’t steal out of a criminal intent or greed, but because of social and personal pressures in their own life. Do Americans really shoplift because they are stressed? Are we glorifying misbehavior with social media pressures?

Maybe it’s time to look at your loss prevention program and update it to make sure you aren’t losing too much to shrinkage.


Dawn Brotherton is a Sr. Staff Writer at The American Genius with an MFA in Creative Writing from the University of Central Oklahoma. She is an experienced business writer with over 10 years of experience in SEO and content creation. Since 2017, she has earned $60K+ in grant writing for a local community center, which assists disadvantaged adults in the area.

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