If you are responsible for managing retail shrinkage you probably have some ideas of what can be done to cut losses. Before taking action and investing dollars into a solution you may want to consider the known sources of retail loss and how that may change your decision to invest.
The University of Florida conducts an annual survey titled National Retail Security Survey which is regarded as the most thorough and accurate reference in the industry. The survey was introduced in 1991 and they survey 106 corporate retail chains in 25 different vertical markets for a truly comprehensive effort.
What have been very consistent over the years are the sources of retail shrinkage. Topping the list every year is employee theft. Employee theft can involve many issues in itself which is why it naturally would be the number one source of retail loss.
Shoplifting hits the list consistently at number two at about 36% of all retail shrinkage. Interestingly the per incident value of shoplifting is on the rise sharply at an average of $549.90 but still much lower than that of employee theft averaging $2,672.95 which again is sharply on the rise.
Third highest source of loss is Administrative and paperwork error and has remained fairly consistent at an average of around 15%.
Fourth and fifth places are a virtual tie between unknown and vendor fraud. Vendor fraud is often one that surprises retailers and they usually haven’t even considered the potential there.
The most efficient way to plan your investment in controlling retail shrinkage is to consider consulting a Loss Prevention Investigator to asses your current situation and prioritize your opportunities for improvement.
