Retailers See Uptick in Shoplifting, Employee Thefts

"Retail shrink," a term used to describe fraud and losses and all the different ways retailers lose money, grew to $61.7 billion in 2019, up from $50.6 billion the year before.

The National Retail Federation said industry security executives reported hikes in the number of shoplifting, organized retail crime and employee thefts.

Mark Mathews, vice president of research at the NRF, said for the average retailer taking part in the survey, that accounted for 1.6% of sales, which was up from 1.4% in previous years. He said this may not sound like a big number but it is significant because retailers earn low profit margins.

Mathews said that shoplifting has been on the rise as states have been increasing the dollar threshold that triggers felony charges for the crime, meaning that thieves are less likely to be fully prosecuted.

He said members of organized retail crime gangs are making multiple small thefts, which keep them below that felony threshold.

The NRF has been calling for repeat offenders to face stiffer penalties by aggregating their offenses.

The survey found that 49% said the largest increase of fraud occurred in stores; 26% saw increases in online fraud; and 19% saw hikes in multi-channel sales such as buying online and picking up in stores.

Typical fraud incidents range from the use of stolen credit cards or card numbers and gift card scams to the return of stolen merchandise for refunds.

While store-based fraud was the biggest increase, the biggest concern among retailers was online theft as more and more people continue to shop online.

To fight losses, retailers reported increased use of technology such as point-of-sale analytics, security cameras and wired alarms for big-ticket merchandise.