Report: Shrinkage Decline Predicted To Continue

By Ally Kutz, contributing writer

Just in time for the holiday shopping season, Checkpoint Systems released its annual Global Retail Theft Barometer, which details theft-related research done throughout the year.

According to the study, in the past year, shrinkage has cost $128.5 billion to retailers globally, accounting for around 1.29 percent of a more than $9.9 trillion market for retail sales.

The study credits four main sources of shrinkage: $48.83 billion in shoplifting (38 percent), $35.98 billion in dishonest employee theft (28 percent), $26.99 billion in administration error or non-crime losses (21 percent), and $16.7 billion in supplier fraud (13 percent). The most common products stolen include make-up products, fashion accessories, power tools, mobile accessories, and wines and spirits. For honest consumers, shrinkage is bad news. On average, shrinkage costs each household more than $400 last year in the U.S. alone.

Although shrinkage accounts for a significant loss in revenue globally, there has been a decrease in shrinkage over the last year. According to last year’s Global Retail Theft Barometer, shrinkage accounted for 1.4 percent of retail theft, translating to roughly $112 billion in an $8 trillion market. Reduction in shrinkage is credited to increased focus, time, and money spent on loss prevention, including focus on loss prevention across all levels of business and significant investment in employee training.

It is predicted that shrinkage will continue to decrease over time via the use of disposable RFID security labels, also known as source tagging. Mark Roberti, founder and editor of RFID Journal, even claims that RFID could save retailers as much as 40 percent, or $42 billion, annually.

To read more about RFID tagging and its application as related to this year’s report, click here.

Visit these links to see the report and watch a short video summarizing the report.