Employees Top Source of Retail Shrink: Study

MIAMI - Retailers suspect that their own employees are the main source of retail shrink, according to a new Retail Systems Research (RSR) Benchmark report.

The report, "Winning Trends in Loss Prevention: Benchmark study 2008," found the worst-performing retailers are more worried about employee theft than other retailers. While 56 percent of retail winners said they believe employee theft of merchandise is one of the top three sources of shrink, 80 percent of average performers and 70 percent of laggards think that their employees are stealing from them. This far outpaces customers as a perceived source of shrink, according to the report, which was sponsored Micros Retail and Sensormatic.

"New loss prevention (LP) initiatives have to be cost-effective in both human and financial terms," said Paula Rosenblum, RSR managing director and author of the report. "Retailers are looking to add business intelligence to existing technologies and provide exception-based reports from video and text-based data to the responsible party. They believe new LP initiatives can reduce their shrink by 10 percent to 25 percent."

The report sheds light on the internal obstacles retailers face in driving new LP initiatives and the methods successful retailers use to overcome those obstacles. It also offers recommendations for improving results without violating core tenet of customer-centricity.
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