Crime study looks at how retailers fight shrink, shoplifting

ADT announced the results of a new study on retail crime this week, which was sponsored in part by the company’s Sensormatic Retail Solutions group.

The study, “Loss Prevention 2010: Retailers Battling Shrink in Tough Times,” found that retailers should focus on investing in technology solutions, such as inventory tracking devices, that help reduce theft and enhance their operational goals without adding labor costs.

The 83 small-to-large-sized retailers interviewed for the survey identified their three largest sources of shrink as employee theft of merchandise, shoplifting and employee theft of cash.

“Given the challenging conditions retailers will face in the near future, any technology enhancements must help to reduce labor costs while delivering better business intelligence,” said Paula Rosenblum, analyst and managing partner for Retail Systems Research, who co-authored the report. “Tools such as video surveillance, returns and void management, exception analysis reporting and cash management are crucial for retailers to be more profitable. Retailers are also paying more attention to managing their item level perpetual inventory systems to gain better insight into lost sales.”

Among some of the reports other findings include:

• Employee theft of cash has increased from 32 to 45 percent of total losses.
• 86 percent of retailers say they are challenged for funds when it comes to loss prevention efforts. 41 percent also lack staff to review LP and audit data (compared to 29 percent in 2008) and 36 percent have extremely inaccurate inventory systems unable to quantify areas of loss.
• Retailers identified business intelligence, inventory tracking and creative uses of existing technologies as solutions that help them overcome organizational inefficiencies.

To obtain a free copy of the report, visit