Retail shrinkage is measured anually by The University of Florida’s National Retail Security Survey (the holy grail of the studies) and the top three in order greatest to least are; employee theft, shoplifting and administrative and paperwork error.
Many retailers would say they believe shoplifting to be their number one source of inventory shrinkage and respond with “I trust my people.” However; the UF survey shows that 43% of all retail inventory shrinkage is due to employee theft. This accounts for $15.5 billion in annual inventory loss. This makes employee theft the single largest form of larceny in the US, no other form of larceny costs Americans more money.
Shoplifting is the second largest form of retail shrinkage. Shoplifting accounts for 36% of total retail inventory loss totally $13 billion in a single year. There is a staggering rise in organized retail crime (ORC) that is potentially underestimated and can involve employee collusion.
Administrative and paperwork errors hit the list at number three and account for 15% of annual retail shrinkage. Naturally, the best way to solve these problems is to prevent theft from occurring. Identifying best practices of operation and incorporating installed loss prevention security will prevent theft and inventory shrinkage and boost bottom line profits.
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