What share of retail shrink is preventable?

What makes up the preventable share

That 73% breaks into four components ¹:

• Employee theft, 29% or $26B ¹.
• Inventory errors, 21% or $19B ¹.
• Operational inefficiencies, 13% or $12B ¹.
• Organized retail crime, 10% or $9B ¹.

The remainder sits outside that preventable share: returns account for a further 20% of total shrink, and 7% is attributed to unknown causes ¹. Shoplifting tied to organized retail crime rose by double digits in the past year, and internal theft has also increased ¹.

How other sources frame the same causes

Other breakdowns assign similar weight to causes that respond to process work. One finds external theft perceived as the largest single cause at around 37%, ahead of process failures at 27%, internal theft at 24% and supplier fraud at 12% ². Another attributes almost 20% of retail shrinkage to basic administrative errors, and suggests these can be avoided by training staff on correct receiving procedures and product labeling ³. Internal theft is put at 29% of total shrinkage industry-wide, rising to 43% at some major retailers, with incidents averaging $1,890 ⁴.

Retailers generally accept that some shrink is a cost of doing business, and no retailer expects 0% shrink ⁵³. Benchmarking against industry comparators, combined with mitigation focused on high-shrink stores and merchandise, is described as an effective way to reduce the impact on the bottom line ⁵.