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Retail 'shrink' Up Due To Increased Shoplifting, Theft

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Retail "shrink" increased to $61.7 billion in 2019 from $50.6 billion a year before that, according to the annual National Retail Security Survey released by the National Retail Federation.

In the retail industry, "shrinkage" or "shrink" is a term used to describe a reduction in inventory due to shoplifting; employee theft; administrative errors such as record keeping, pricing, and cash counting; and supplier fraud. Retailers have to factor loss into their bottom line.

The increase in shrink was largely due to increases in the number of shoplifting, organized retail crime, and employee theft incidents, the report says.

"Between an increase in incidents and new ways to steal, shrink is at an all-time high," NRF Vice President for Research Development and Industry Analysis Mark Mathews said. "Loss prevention experts are facing unprecedented challenges from individual shoplifters to organized gangs to highly skilled cybercriminals. Retailers are responding with both traditional methods and the latest technology, but this is an ongoing challenge that can only be won with the support of lawmakers and law enforcement."

According to the report, shrink averaged 1.62 percent of sales during 2019, up from 1.38 percent in 2018 after hovering around 1.4 percent over the past few years.

The number of cases was up, with an average 560 employee theft apprehensions per retailer surveyed, up from 323 last year, while shoplifting/ORC apprehensions was 689, up from 509.

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