Inventory Shrink is Growing

The National Retail Federation (NRF) and the University of Florida announced it survey results of its National Retail Security Survey last week. Inventory shrink rose to $48.9 billion in 2016, from $45.2 billion in 2015. Thefts totaled 1.44% of sales, up from 1.38%. Retailers surveyed shared that 48.8% of them reported increases in inventory shrink. Shoplifting and organized crime made up 35.6% of the shrink, while employee theft/internal made up 30%. Shoplifting averaged $798.48 per incident, more than double 2015. The rise is attributed to smaller budgets for security and loss prevention. The rest was made up of administrative error and vendor fraud or error. Another important reason to have accurate inventory reports at the item/store level to track inventory anomalies, recognize shrink sooner, and maintain accurate inventory levels of what is available to purchase in the stores. For the first time, retailers were asked in the survey about return fraud, which reported an average loss of $1766.27.

Source: Chain Store Age