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Wireless Retail Blog

Trending news and best practices for the savvy wireless retailer

Retail Shrinkage Numbers are Increasing

How Wireless Retailers Can Prevent Retail Shrink

As of November 2015, the latest Global Retail Theft Barometer Study found that U.S. retail shrinkage as a total percentage of sales is up. Shrink, which includes shoplifting, employee fraud, supplier fraud, and administrative errors increased from 1.28% of sales in 2013-2014, to 1.97% of sales during 2014-2015.

These figures are relevant in wireless retail, too. Why have these numbers gone up, and what can retailers do to prevent shrink?

Why is retail shrink up?

The study found that retailers experienced a wide variety of factors that led to shrink increasing.

These factors include:

  • A challenging retail environment that forced retailers into budget cuts. Many instituted austerity measures that reduced the size and scope of their loss prevention efforts.
  • Areas of high unemployment appear to see more shrinkage as a result of thefts.
  • Limited tools for monitoring internal theft and inventory mishaps.

It’s difficult to monitor a store successfully with limited resources, though it is possible.

How employee theft contributes to shrinkage

Shoplifting is the biggest cause of retail shrink around the world, but not in the U.S. The Global Theft Barometer Study also found that employee theft accounted for 45% of shrink, with shoplifting next at 36%.

Employers who are more susceptible to internal theft include those who:

  • Have inadequate pre-employment screening procedures
  • Scale down the amount of associate supervision
  • Rely primarily on part-time employees

Wireless carriers who focus on these issues should be able to combat shrink due to dishonest employees. As the holidays approach many retailers will be hiring more part time employees to handle the increased business, but a thorough pre-employment screening process and supervision from other staff members can make theft more difficult.

Mobile phones are among the most stolen merchandise

Unfortunately for wireless retailers smartphones are among the most commonly stolen items in the country. However, there are steps that retailers can take to limit their risks:

  • Lock up valuable items. Use “dummy” phones or models on the sales floor — that way if a customer wants to make a phone purchase they have to ask a sales associate.
  • Properly train employees in loss prevention, including signs to look for.
  • Use technology, like video surveillance hardware and software, to monitor your store.
  • Design your layout in a way that deters shoplifters.

To read about these steps in more detail, see our blog post about how wireless retailers can prevent holiday shoplifting.

According to Ernie Deyle, one expert who was involved with the Global Theft Barometer study, “Even if retailers are paying more attention to all aspects of the problem, without a strong investment in loss prevention tactics, tools and resources, they won’t get the results they’d expect. ” Wireless retailers absolutely must make a dedicated effort to loss prevention if they want to keep their own shrinkage numbers from rising.


About the Author — Christie Acker

Christie is responsible for helping Envysion’s enterprise clients in the retail and restaurant spaces understand the best ways to use video-based business intelligence to deliver on their brand promise and drive profitability. With over 15 years experience in building and supporting world-class sales organizations, Christie is an accomplished and tenured leader in the enterprise software sales market. An avid traveler, she has visited over 60 countries and uses her diverse experiences to help understand clients' needs to design and implement solutions to help achieve their goals. Christie holds a Bachelors degree in Economics from Vanderbilt University.


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