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Retailers use the equation (inventory in db - what's on shelf) = shrink, which conflates many different types of problems in one. Shrink can happen with errors

by Jun8 3y ago

Retailers use the equation (inventory in db - what's on shelf) = shrink, which conflates many different types of problems in one. Shrink can happen with errors in dbs and cycle counts, but the large part is due to actual theft. However, theft can take many different forms: * Items "falling off the truck", i.e. you expect 100 units to be delivered to store, only 90 were delivered. Workers rarely check counts while receiving in store backrooms, so retailers think these were stolen from the shelves; * Employees stealing stuff directly, either from the backroom or from the shelves; * Employees working in conjunction with non-employees to steal, e.g. sweethearting (https://en.wikipedia.org/wiki/Sweethearting); https://en.wikipedia.org/wiki/Sweethearting); * Plain old shoplifting, e.g. somebody swiping a few items from the shelf into their pocket; * Organized Retail Crime (ORC): People coming into the store and brazenly stealing entire shelves or racks of merchandise. The first four has been around since Retail was invented, but their impact is relatively small on a store basis. It is the last item that is the killer and what is referred to as the rise in "shoplifting" recently. This is not shoplifting in the traditional sense at all. As an example, consider Cotopaxi closing their flagship store in SF: https://sgbonline.com/cotopaxi-closes-store-in-san-fransisco-due-to-crime/ https://sgbonline.com/cotopaxi-closes-store-in-san-fransisco... Retailers are very reluctant to deal directly with the problem, i.e. stop the people walking out. The reason is that the usual profile of people engaged in OCR as well as its relation to various progressive causes makes this a taboo subject in the US. This also makes it hard to discuss the problem. Just the other day I heard a segment on NPR saying retail theft has not increased and "statistics are hard to come by". Edit: For those who (rightly) point out the fact that retailers are doing cost benefit analysis and deciding that the bad press is not worth it: consider walking into a bank in California and stealing (without using a weapon, just intimidation) less than $950 (lower than the misdemeanor theft limit for retail) and see if the bank would do a similar analysis.

yoyohello13 3y ago
A company would much rather lose some inventory than deal with an employee that was injured or killed trying to stop a thief.
- Paul-Craft 3y ago
  Only because one side of that equation costs more than another. Let's not attribute any sort of positive morality to the company here.
thmsths 3y ago
I would also naively expect that trying to intervene directly is dangerous. Organized hints at multiple people, you do not want to start escalating things in such a situation.
ipnon 3y ago
It’s simply more expensive to deal with the public relations and legal consequences of organized retail crime than to deal with it itself. These are national or even multinational corporations. They will let the stores in dysfunctional cities bleed out and write them off for the quarter, and remember this the next time they choose where to invest.
- underseacables 3y ago
  Also political .
crote 3y ago
> Retailers are very reluctant to deal directly with the problem, i.e. stop the people walking out. This isn't due to some kind of "woke" policy. You can't expect minimum-wage workers to literally risk their life trying to stop a potentially-armed shoplifter. The company sure isn't going to pay their healthcare costs when they get stabbed or shot, so why would the worker care about a slightly lower profit margin?
- trealira 3y ago
  From what the employee said, they're reluctant to take any action at all, like hiring more staff or caging certain merchandise like beer. > Corporate ignored employees’ requests to put booze in locked cases because the liquor aisle is an area of the store that attracts some especially “sketchy” characters. It also blew them off when they warned of camera blind spots that shoplifters were aware of. “The company didn’t really seem that interested in solving the problem, they seemed more interested in, I don’t know, complaining,” he says. The cops weren’t much help, either. They’d show up hours after being called and ask whether the perpetrators were still there (they obviously weren’t) and which way they’d gone (what does it matter if it was six hours ago?). ... > “All these companies that are screaming about theft, they’re kind of complicit in it because they keep reducing staff,” says Steven Rowland, the host of The Retail Warzone podcast and a former retail store manager. “From an hourly standpoint, a lot of these folks feel like they’re not paid enough to care anyway. And then you have store managers who are bleeding out, basically, because they have a lack of payroll, they don’t have enough staff just to get their basic functions done.”
- Jun8 3y ago
  You're right that store workers cannot be expected to interfere. What I meant was that they are reluctant to take more draconian measures, e.g. armed guards at the store and calling police immediately.
- qingcharles 3y ago
  I knew someone who did 7.5 years in prison because he was the getaway driver for his female friend who stole a $5 hat from Walmart on the way out of the door and the shelf-stacker tried to be a hero and chase down the car, had to jump out of the way, hit their head on the kerb and was in a coma for months. Walmart paid the medical bills which came in at over $2m. Source: they were my cellmate in jail Edit: but I live in the hood, and twice recently I've seen shoplifters beaten to shit by retail workers in Family Dollar and Walgreens for being caught stealing...
coleca 3y ago
After having worked in retail for 20+ yrs, both in the field and in IT, what I saw as the largest cause of shrink was always just simple accounting errors. For example, I saw all the time a store would receive a case of merchandise from a vendor containing 100 toothbrushes, the computer says it's a qty of 100 for $2.99, but the receiver scans in the barcode for the whole case instead of the individual toothbrush and puts in a qty of 100 received. Now the retailer thinks they should have 10k instead of 100 brushes on hand, which gets picked up as a loss. I've seen similar things where the case pack sizes or prices were fat fingered by the corporate buyer and wrong in the system causing massive perceived shortages.
- xethos 3y ago
  But that would only explain the ~20 billion dollar increase in shrink if stores had very high turnover due to low hourly pay (and a recent push for employees attempting to demand more), a strict immigration policy (or the afteraffects of low immigration during a recent pandemic) and poor working conditions (for floor employees), resulting in poorly trained employees that may not realize their mistake! ...which actually adds up.
p_j_w 3y ago
[flagged]
- Jun8 3y ago
  Rather than the usual he said/she said approach, do you have knowledge to back up your claim that "this isn't the reason"? In my job function I talked with many retailers. Also the crime increase post 2020 cannot be easily ignored. As I mentioned to a sister comment above, what I meant is that retailers are reluctant to take any action. This is due to a convergence of several factors, including bad optics, lack of response from the police (which in turn is related to other factors), and, of course, the additional costs.
- kyleee 3y ago
  You have a very misinformed black and white view of low wage workers. Many are honorable and take issue with theft despite their wage and would prefer to intervene. Obviously though as you state many also have a more detached view understanding that it may be unwise to intervene due to risk + their low wage, even if they dislike theft.

by Jun8 3y ago

yoyohello13 3y ago

A company would much rather lose some inventory than deal with an employee that was injured or killed trying to stop a thief.

Paul-Craft 3y ago
Only because one side of that equation costs more than another. Let's not attribute any sort of positive morality to the company here.

thmsths 3y ago

I would also naively expect that trying to intervene directly is dangerous. Organized hints at multiple people, you do not want to start escalating things in such a situation.

ipnon 3y ago

It’s simply more expensive to deal with the public relations and legal consequences of organized retail crime than to deal with it itself. These are national or even multinational corporations. They will let the stores in dysfunctional cities bleed out and write them off for the quarter, and remember this the next time they choose where to invest.

underseacables 3y ago
Also political .

crote 3y ago

> Retailers are very reluctant to deal directly with the problem, i.e. stop the people walking out. This isn't due to some kind of "woke" policy. You can't expect minimum-wage workers to literally risk their life trying to stop a potentially-armed shoplifter. The company sure isn't going to pay their healthcare costs when they get stabbed or shot, so why would the worker care about a slightly lower profit margin?

trealira 3y ago
From what the employee said, they're reluctant to take any action at all, like hiring more staff or caging certain merchandise like beer. > Corporate ignored employees’ requests to put booze in locked cases because the liquor aisle is an area of the store that attracts some especially “sketchy” characters. It also blew them off when they warned of camera blind spots that shoplifters were aware of. “The company didn’t really seem that interested in solving the problem, they seemed more interested in, I don’t know, complaining,” he says. The cops weren’t much help, either. They’d show up hours after being called and ask whether the perpetrators were still there (they obviously weren’t) and which way they’d gone (what does it matter if it was six hours ago?). ... > “All these companies that are screaming about theft, they’re kind of complicit in it because they keep reducing staff,” says Steven Rowland, the host of The Retail Warzone podcast and a former retail store manager. “From an hourly standpoint, a lot of these folks feel like they’re not paid enough to care anyway. And then you have store managers who are bleeding out, basically, because they have a lack of payroll, they don’t have enough staff just to get their basic functions done.”
Jun8 3y ago
You're right that store workers cannot be expected to interfere. What I meant was that they are reluctant to take more draconian measures, e.g. armed guards at the store and calling police immediately.
qingcharles 3y ago
I knew someone who did 7.5 years in prison because he was the getaway driver for his female friend who stole a $5 hat from Walmart on the way out of the door and the shelf-stacker tried to be a hero and chase down the car, had to jump out of the way, hit their head on the kerb and was in a coma for months. Walmart paid the medical bills which came in at over $2m. Source: they were my cellmate in jail Edit: but I live in the hood, and twice recently I've seen shoplifters beaten to shit by retail workers in Family Dollar and Walgreens for being caught stealing...

coleca 3y ago

After having worked in retail for 20+ yrs, both in the field and in IT, what I saw as the largest cause of shrink was always just simple accounting errors. For example, I saw all the time a store would receive a case of merchandise from a vendor containing 100 toothbrushes, the computer says it's a qty of 100 for $2.99, but the receiver scans in the barcode for the whole case instead of the individual toothbrush and puts in a qty of 100 received. Now the retailer thinks they should have 10k instead of 100 brushes on hand, which gets picked up as a loss. I've seen similar things where the case pack sizes or prices were fat fingered by the corporate buyer and wrong in the system causing massive perceived shortages.

xethos 3y ago
But that would only explain the ~20 billion dollar increase in shrink if stores had very high turnover due to low hourly pay (and a recent push for employees attempting to demand more), a strict immigration policy (or the afteraffects of low immigration during a recent pandemic) and poor working conditions (for floor employees), resulting in poorly trained employees that may not realize their mistake! ...which actually adds up.

p_j_w 3y ago

[flagged]

Jun8 3y ago
Rather than the usual he said/she said approach, do you have knowledge to back up your claim that "this isn't the reason"? In my job function I talked with many retailers. Also the crime increase post 2020 cannot be easily ignored. As I mentioned to a sister comment above, what I meant is that retailers are reluctant to take any action. This is due to a convergence of several factors, including bad optics, lack of response from the police (which in turn is related to other factors), and, of course, the additional costs.
kyleee 3y ago
You have a very misinformed black and white view of low wage workers. Many are honorable and take issue with theft despite their wage and would prefer to intervene. Obviously though as you state many also have a more detached view understanding that it may be unwise to intervene due to risk + their low wage, even if they dislike theft.