A new study from NRF Protect finds that retailers lose billions of dollars to shoplifting, employee and vendor theft, and administrative error—collectively known as inventory shrink. According to the National Retail Federation (NRF)/University of Florida National Retail Security Survey (NRSS), retailers say inventory shrink averaged 1.38 percent of retail sales, or $44 billion, last year. The report was sponsored by The Retail Equation.
Retailers surveyed estimate that shoplifting accounted for the largest part of reported shrink in 2014, or 38 percent, followed by employee/internal theft (34.5 percent), administrative and paperwork errors (16.5 percent), vendor fraud or error (6.8 percent), and unknown loss (6.1 percent).
When it comes to loss prevention budgets, 39.4 percent of those surveyed say their budget for this year increased over last year, while just over one-third, or 36.6 percent, said their budgets would be similar to what they were last year—leaving 23.9 percent of respondents with decreased resources.
Dr. Richard Hollinger, criminology professor at the University of Florida and lead author of the NRSS for the past 24 years, noted that this year’s shrink percentage is the lowest seen in the survey’s history.