4 ms·

wait... are we sure we're reading these numbers right? that $1 billion. is that the income earned from the sale? Or is that the profit the retailer keeps all t

by oehpr 5y ago

wait... are we sure we're reading these numbers right? that $1 billion. is that the income earned from the sale? Or is that the profit the retailer keeps all told? As an example, how many chainsaws does Home Depot have to sell before it pays for the theft of one chainsaw? I would assume much more than one. I think the NRF are just listing the sum MSRP's of legitimately sold items vs stolen items. You can't just divide that to get the "portion of harm"

ChuckMcM 5y ago
I agree that there are a number of sources of possible error, from the retailer to the reporter that is summarizing from a much larger report. That said, the computation of 'shrinkage' has been defined as MSRP of products that are stolen and/or damaged, divided by the gross sales of all products. The number captures "lost" revenue. My nephew, who is working at a large nationwide retailer and has access to all of this data for their stores, has told me in the past (and I presume it is still true), that the largest component of "loss" experienced on the retail side is through employee theft, either directly, or by assisting a partner to evade the payment systems. The smallest portion of this loss is from people who come into the store and take merchandise without paying for it. The "interesting" thing about that story, is not that it makes it harder to sneak out a tool, but that it requires a register transaction for that tool to work. Combined with inventory management of that tool, internal theft rings are uncovered because the employee facilitating the theft has to use their register to do so. But the stores won't tell you that of course. Just like back in the day getting out of a Fry's Electronics was like being released from a SuperMAX prison lockup with all the gates and checks and re-checks. They too were much more worried about employee theft than individuals stealing stuff.

by oehpr 5y ago

ChuckMcM 5y ago

I agree that there are a number of sources of possible error, from the retailer to the reporter that is summarizing from a much larger report. That said, the computation of 'shrinkage' has been defined as MSRP of products that are stolen and/or damaged, divided by the gross sales of all products. The number captures "lost" revenue. My nephew, who is working at a large nationwide retailer and has access to all of this data for their stores, has told me in the past (and I presume it is still true), that the largest component of "loss" experienced on the retail side is through employee theft, either directly, or by assisting a partner to evade the payment systems. The smallest portion of this loss is from people who come into the store and take merchandise without paying for it. The "interesting" thing about that story, is not that it makes it harder to sneak out a tool, but that it requires a register transaction for that tool to work. Combined with inventory management of that tool, internal theft rings are uncovered because the employee facilitating the theft has to use their register to do so. But the stores won't tell you that of course. Just like back in the day getting out of a Fry's Electronics was like being released from a SuperMAX prison lockup with all the gates and checks and re-checks. They too were much more worried about employee theft than individuals stealing stuff.