Retailers battle nearly $100 billion in shrink

Organized retail crime is a burgeoning threat within the industry

The recently released National Retail Security Survey shows that total shrink in 2021 reported by retailers is now almost a $100 billion problem. Each year, NRF surveys retail loss prevention and security executives about risks, threats and vulnerabilities to their companies and the retail industry as a whole. This year’s NRSS report was conducted in partnership with the Loss Prevention Research Council and includes a closer look at the impact of organized retail crime on the retail industry.

Retailers face security-related challenges on many fronts. This year, 88% of participating retailers reported that the pandemic resulted in an increase in overall risk for their company. Most reported in-store, ecommerce and omnichannel fraud are all on the rise.

Read the survey

Learn more about ORC and other retail loss prevention challenges in NRF’s National Retail Security Survey.

The majority also reported that guest-on-associate violence, external theft, ORC and cybercrimes have become higher priorities for their organizations. Challenges with labor shortages, employee retention and hiring — as well as issues related to masking and maintaining COVID-19 precautions — have contributed to the risks of violence and hostility.

ORC remains a challenge

In 2021, respondents saw a 27% increase in ORC incidents, and eight in 10 reported an increase in violence and aggression associated with ORC incidents. These crimes jeopardize employee and customer safety and disrupt store operations. Retailers are responding with increased budgets for loss prevention and technology; 52% are increasing budgets specifically for capital and equipment.

Retailers also are implementing technology to protect their stores and the people around them, including artificial intelligence-based video analytics, autonomous security robots and license plate recognition. One-third (32%) of participating retailers report they’ve established a dedicated ORC team; retailers with such teams average greater apprehensions, prosecutions and civil demands.

Retailers continue to adapt to a rapidly changing environment, but additional steps must be taken to combat ORC. That includes policy reform: Retailers want stronger ORC legislation, particularly at the federal level, and better enforcement of existing laws. In addition, they favor increased penalties for theft and a reduction in felony thresholds — 71% of those surveyed report increased ORC activity in locales where felony thresholds have increased.

Advocating for change

NRF continues to ask Congress to provide law enforcement funding and other resources to combat ORC. The INFORM Consumers Act, bipartisan legislation introduced by Senators Dick Durbin, D-Ill., and Bill Cassidy, R-La., and Representatives Jan Schakowsky, D-Ill., and Gus Bilirakis, R-Fla., would require online marketplaces to verify the identity of high-volume third-party sellers to curb the fencing of stolen merchandise and address the sale of counterfeit goods.

Organized Retail Crime Alliances and other regional taskforces convene members of law enforcement, district attorneys and retail investigators to share information and bring cases against organized groups that recruit individuals to steal, fence and resell products. NRF’s ORC/Investigative Network, comprised of more than 1,000 loss prevention professionals, facilitates information sharing, communal strategizing and partnerships between retailers and law enforcement.

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