Sticky Fingers Top Source of `Shrink' at U.S. Retailers

(Bloomberg) -- The little guys and big guys -- shoplifters and organized crime -- account for the lion’s share of “shrink” at U.S. retailers.

Criminal activity along with bookkeeping errors canceled out an average of 1.33 percent of sales in 2017 versus 1.44 percent in 2016, according to the National Retail Federation and the University of Florida.

Cause

Frequency

Shoplifting and organized retail crime36%
Internal employee theft33%
Administrative paperwork errors19%
Vendor fraud or mistake6%
Other6%

At the same time, six in 10 retailers said shrink was less of a problem last year versus four in 10 in 2016.

For the years ahead, cybersecurity is a top concern and many retailers have introduced online incident response plans.

“Criminals continue to become more sophisticated in this area,” said Richard Hollinger, a University of Florida criminology professor and the lead author of the report. “This is a growing threat that will require more resources going forward.”

©2018 Bloomberg L.P.

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