In 2001, retailers lost more than $29 billion to theft (Vargas 2001). Ironically, the majority of such theft does not stem from customers often referred to as shoplifters. In fact, the biggest cause of loss among retailers with respect to theft is employees. According to the National Retail Security Survey (NRSS), the following categories demonstrate the sources of inventory shrinkage for retailers:
Employee theft has risen two percent since the last survey by NRSS. One of the biggest reasons for employee theft stems from the tight labor market. Because of such a market, employers are often short-staffed, leaving them more vulnerable to all kinds of retail theft. Further, such a labor market often allows dishonest employees to be hired by employers desperate to cover shifts and positions. Despite such negative trends, overall a positive statistic is the fact that total inventory shrinkage is down slightly to 1.69 percent of sales in 2001 from the 1.72 percent in the 1998 survey (Vargas 2001, 1).
Other organizations devoted to retail security and retail theft support the above statistics that employee theft is the largest cause of inventory shrinkage and retailer losses. However, such reports of employee theft in retail vary as to the amount of damage. While Hayes (2002) argues that retailers lost only $4.7 billion to theft in 2002, Torres (2003) reports that retailers took a $15 billion hit from employee theft in the same year. The Hartford Insurance Company maintains that ôemployee theft causes one out of every three business failures in this country,ö (Kessler 2002, 1). Such dour statistics have prompted a number of retailers and retail security firms to increase the number and manner of theft prevention and detection used to keep employees from stealing and minimize inventory shrinkage.
As employee theft among retailers continues to grow, a number of retailers and security firms have taken additional measures...