The phrase “smash-and-grab” has appeared in headline after headline lately. In Los Angeles, a theft ring has cost stores, including Macy’s, Nike, and Nordstrom, up to $400,000 per location as flash mobs of dozens easily overwhelm security guards. Dick’s Sporting Goods blamed shrink (industry jargon for lost inventory) for a 23% drop in quarterly profits, and Target’s CEO predicted a 100% year-over-year spike in losses to crime.
It’s plenty enough to make small retailers ask, “What’s going on, and should I worry?”
Such worries might not be completely unfounded. In late August, thieves took $500,000 in merchandise from an independent L.A. jewelry store. (Meanwhile, in New York City, 8-year-old pickpockets are reportedly “terrorizing” bars and restaurants; they’re definitely going on Santa’s Naughty List.)
While your small local business is unlikely to get hit by a 50-person theft ring — or tiny schoolchildren — the U.S. Chamber of Commerce has found that about half of small retailers are reporting increased theft.
But here’s a catch: the shrink might be coming from inside your business.
“Behind closed doors, retailers are facing other issues … including theft by their own employees, that are contributing to losses,” CNBC reports, adding that shrink can be “used as an excuse for generally bad performance” as it gets lumped in with figures, such as customer returns and lost merchandise.
In the U.K., employee theft is up by 20%, likely as a reaction to the rising cost of living. To combat it, the Association of Certified Fraud Examiners recommends that employers offer benefits such as lunch vouchers, subsidized childcare, and financial education. (Especially in tough economic times, experts say, employee loss prevention must be proactive rather than reactive.)
Some media outlets have even questioned if we’re in the midst of a shoplifting scourge or a paranoid panic: CNN cites National Retail Federation numbers that suggest shrink as a percentage of sales has gone down since 2020. In “The Great Shoplifting Freak-Out,” the Atlantic asks, “Why is it so hard to figure out if America’s enormous surge in theft is real?”
Like with many issues these days, it can be easier to trust vibes than anything else — and not many business owners are picking up good ones. Whatever you’re feeling, staples like security systems, insurance, and fraud prevention remain essential.
