NCPA - National Center for Policy Analysis

Employee Theft in Retailing

July 11, 2001

Experts say that profit margins in the retailing industry are razor thin. And the greatest cause of missing goods and money is employee theft. So the industry has a substantial incentive to crack down on it.

  • Some 44 percent of retail store losses are due to employee theft -- followed by shoplifting at 33 percent, 18 percent due to paperwork errors, and 5 percent attributable to vendor fraud.
  • The average loss per employee theft at U.S. retail stores is $1,023 -- but that varies widely by type of store.
  • Supermarket and grocery stores get off easy at $183 per employee theft.
  • Home centers, hardware, lumber and garden supply stores are hit hardest -- at $1,146 per employee theft.

Retailers lose an average of about 1.7 percent of their revenue -- about $40 billion a year in cash and inventory -- to other unexplained losses, called shrinkage.

Some 20 years ago, stores began installing closed-circuit cameras to detect shoplifters. Now some are adding what are called sales-transaction surveillance software -- monitors mounted above cash registers which look for unusual patterns as transactions are taking place.

Source: Jennifer S. Lee, "Tracking Sales and the Cashiers," New York Times, July 11, 2001.


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