NRF Survey Says Retail Shrink Increased to $48.9 Billion in 2016

NRFThefts from retailers and other inventory “shrink” grew to $48.9 billion in 2016 from $45.2 billion the year before even as budget constraints left retail security budgets flat or declining, according to the annual National Retail Security Survey released today by the National Retail Federation and the University of Florida. The thefts amounted to 1.44 percent of sales, up from 1.38 percent.

According to the report, 48.8 percent of retailers surveyed reported increases in inventory shrink, while 16.7 percent said it remained flat. Shrink was divided into shoplifting and organized retail crime (36.5 percent), employee theft/internal (30 percent), administrative paperwork error (21.3 percent) and vendor fraud or error (5.4 percent).

Shoplifting continued to account for the greatest losses with an average of $798.48 per incident, up from $377 in 2015. Part of the increase came because some states have raised the threshold for crimes to be considered a felony, meaning that only larger thefts are reported. But the rise was also attributed to retailers allocating smaller budgets for loss prevention, leaving them with fewer security staff to fight the thefts.

Shoplifting was followed by an average loss of $1,922.80 from employee theft, up from $1,233.77 in 2015. The average cost of retail robberies dropped to $5,309.72 from $8,170.17 in 2015 but remained at more than double the $2,464.50 seen in 2014.

For the first time in the survey, retailers were asked about return fraud, reporting an average loss of $1,766.27.

The survey of 83 loss prevention executives from a variety of retail sectors was conducted March 29 to May 1. The study is a partnership between Hollinger and NRF and is sponsored by The Retail Equation.

About the author

Maddie Michalik

Maddie Michalik

Maddie Michalik was the Editor-in-Chief of The Toy Book from 2020-2022. She was also a Senior Editor at The Toy Insider and The Pop Insider.

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