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International News

Employee Theft: The Largest Source of Shrink in North America

November 01, 2011 posted by Steve Brownstein

Shrinkage cost retailers around the world more than $119 billion over the past year, or 1.45 percent of their sales, according to the Centre for Retail Research's Global Retail Theft Barometer for 2011.

The causes that are most commonly responsible for retail shrinkage are different in various regions of the world.

Customer theft was the primary cause for shrinkage in most countries around the world, resulting in $51.5 billion in losses so far this year.

However, dishonest employees were the biggest cause of retail shrinkage in North America.

Employee theft resulted in $47 billion in losses for North American retailers so far this year, up from $37.8 billion last year.

Shrinkage that resulted from employee theft represented 44 percent of all the retail shrink that has taken place so far in 2011.

However, employee theft may seem to be higher in North America than in other parts of the world because retailers here are so focused on the problem that more workers are being caught, said professor Joshua Bamfield, the author of the report.

Bamfield also said that employee theft could be the result of retailers using part-time or temporary workers, who may be less hesitant than their full-time, permanent counterparts to steal merchandise.