Study says shrink hit record levels

MMR, Dec 9, 2002

BOCA RATON, Fla. -- Inventory shrinkage reached record levels for the second year in a row in 2001, a recent University of Florida retail study shows.

According to the 2002 Hollinger Retail Theft survey, which analyzed theft incidents from 118 of the nation's largest retail chains, employee theft, shoplifting, vendor fraud and administrative error accounted for $31.3 billion in losses, or 1.7% of retailers' overall annual sales, last year and made inventory shrinkage the single largest category of larceny in the United States. Of that $31.3 billion, 48.5% of retail losses came from employee theft, 31.7% resulted from shoplifting, 15.3% was due to paperwork errors and 5.4% came from theft by vendors.

Consumers, meanwhile, are hurt by retail theft, which results in over $440 in higher prices each year for an average family of four, according to University of Florida criminologist Richard Hollinger, who directed the ADT Security Services Inc.-sponsored study.

Merchants have turned to such security technologies as point-of-sale data-mining software solutions, source-tagging programs, and self-alarming anti-theft tags.