Shrink, comprised of shoplifting, employee or supplier fraud, and administrative errors, rose in the U.S. from 1.28 percent of sales in 2013-2014 to 1.97 percent during 2014-2015, based upon responses from common retail respondents who participated in Global Retail Theft Barometer surveys both years.Globally, this compares to 1.42 percent, a figure also up from the previous .94 percent average of all common retailers surveyed the previous year.Retailers expressed that a range of factors, including a challenging retail environment, caused them to implement austerity measures resulting in a reduction of loss prevention investments. This, combined with areas of high unemployment and limited tools to monitor internal theft and inventory discrepancies, all contributed to an increase in their shrink.According to the report, the annual cost of shrink to U.S. shoppers, as absorbed or passed on from retailers, averaged $615 per household.The study, underwritten by an independent grant from Checkpoint Systems, Inc., was carried out during 2014-2015 by The Smart Cube and Ernie Deyle, a retail loss prevention analyst. It was based upon in-depth phone and written survey interviews conducted in 24 countries among more than 200 retailers representing nearly $1 trillion in sales during 2014-2015.Seasonally, U.S. respondents said that 46 percent of their yearly losses occurred in winter, nearly twice as much as the next season, autumn, at 24 percent. Spring (18 percent) and summer (12 percent) followed.Vertical retail comparisonsU.S. apparel specialists (2.28 percent), pharmacies/drugstores (2.25 percent) and non-grocery retailers (1.9 percent) witnessed the highest shrink rates because of the widespread prevalence of internal and external retail theft targeting their merchandise.In fact, while shoplifting is the biggest cause of retail shrink in 18 of the 24 countries surveyed, in the U.S., employee theft ranked first at 45 percent, with shoplifting next at 36 percent. The primary reasons for employee theft were weak pre-employment screening procedures, reduced associate supervision, increasing part-time workforce (especially during peak winter periods when theft is highest), and the easy sale of stolen merchandise.Shoplifting continues to plague the retail industry due to escalating problem of organized retail crime, easy sales of stolen merchandise through online sites, reduced investments in loss prevention tools and resources, and the general perception of shoplifting as a "low-risk/non-offensive" crime.Shoplifters and dishonest employees in the U.S. primarily targeted small and easy-to-conceal items such as liquor, mobile accessories, batteries, fashion accessories and razor blades, as well as high-value items with high resale value, such as tablets. When sorted by retail vertical, the most stolen items included footwear (Apparel and Fashion Accessories); batteries (DIY Home Improvement); mobile device accessories (Electronics); wines and liquor (Food and Beverage); and razor blades (Health and Beauty).According to Deyle, "This year's results highlight the persistent factors that impact shrink and ultimately reduce retailers' profitability. Even if retailers are paying more attention to all aspects of the problem, without a strong investment in loss prevention tactics, tools and resources, they won't get the results they'd expect. Our hope is that this report helps the industry better understand all the complexities of the shrink problem as well as the most cost-effective ways of addressing it.""This is our fourteenth year of supporting what continues to be the industry's only global statistical research," said Per Levin President of Merchandise Availability Solutions, Checkpoint Systems. "To combat increased shrink, retailers are adopting strategies to approach losses from a wider perspective from all levels within the organization and work with their supplier and solutions partners. With the right technologies, people and processes, they can achieve improved merchandise availability, which directly impacts shoppers' satisfaction and retailers' profitability."During the latest reporting period, U.S. retailers that also participated in the study in 2013 reduced their overall loss prevention spend to 0.50 percent of sales, which contributed to the reported increase in shrink. Most common loss prevention store solutions included CCTV/DVR (83 percent), alarm monitoring (78 percent), and security guards (63 percent). Most common merchandise protection solutions deployed to prevent retail theft included electronic article surveillance (EAS) (68 percent), spider wraps/security keepers (41 percent) and advanced inventory control tactics (27 percent).Interested parties can obtain a copy of the complete 135-page Global Retail Theft Barometer report and see a video overview of the study here Retailers wishing to participate in next year's Global Retail Theft Barometer study may register here 

 American workers steal from their employers — a lot. 
 
 Employees in the U.S. steal from their employers at significantly higher rates than workers in other countries, according to The Global Retail Theft Barometer released this month by Checkpoint Systems. While in most countries shoplifting makes up the bulk of shrinkage, in the U.S. the bulk of shrinkage is due to employees stealing from their employers. In layman’s terms, shrinkage is the difference between the revenue businesses should have received and the revenue they did receive, and the difference is due in large part to losses from shoplifting, employee theft and vendor/supplier fraud. Indeed, employee theft is responsible for 45% (up from 43% last year) of shrinkage in the U.S. (vs. 36% from shoplifting). Globally, it’s just 39% from employee theft (vs. 38% from shoplifting). 
 
 While experts at The Global Retail Theft Barometer say it’s not clear why employee theft is so high in the U.S. — at least compared with other countries — they do have information on how these workers steal from their employers. Most of it happens during checkout/the point of sale “when an associate purposely manipulates a transaction for the benefit of themselves or someone else,” says Ernie Deyle, the study co-author and an industry consultant, who also serves as lead for Crisis Management, Safety & Enterprise Resiliency at Sears Holding Company. For example, workers may issue refunds, discounts or voids at the register when they shouldn’t, or cancel transactions, modify prices or say someone used a coupon when they didn’t. 
 
 And that all adds up: Employee theft cost U.S. retailers $16.6 billion in the past year-- that’s $3 billion more than shoplifting cost them and about $10 billion more than vendor and supplier fraud and administrative and non-crime losses cost them combined. Some of the reasons that employees steal include ineffective pre-employment screening, less employee supervision and easy sale of stolen merchandise, the report reveals. 
 
 Employee theft at certain kinds of stores in this country is more prominent than at others. Department stores, for example, experience a very high rate of employee theft as a percentage of total shrinkage, while more niche retailers like home improvement and gardening stores do not. 
 
 4 types of stores that have the worst problems with employee theft 
 
 Dishonest employee theft Shoplifting Vendor or supplier fraud Administrative and non-crime losses Department stores 59% 35% 3% 3% Supermarkets and grocery stores 50% 31% 10% 10% Apparel specialty retailers (this includes stores that primarily sell clothing like Gap or Abercrombie) 44% 41% 4% 12% Hypermarkets (a combo of a supermarket and department store) and mass merchandisers (like Target and Walmart) 47% 32% 11% 11% 
 
 This story has been updated.
– The good news: Stores in the US lose less revenue to shoplifting than their counterparts in other countries. The bad news: Retail workers in the US are doing more of the stealing themselves … to the tune of $16.6 billion during the past year, according to Checkpoint Systems' Global Retail Theft Barometer released this month. In fact, retail shrinkage in the US resulting from employee theft rose 2% over last year to 45% of total shrinkage, MarketWatch reports. Simply defined, shrinkage is the difference between the revenue businesses should have brought in and the revenue they actually brought in. Meanwhile, shoplifting accounted for 36% of lost revenue in the US. Around the world, 39% of shrinkage is credited to employee theft, while 38% is attributed to shoplifting. MarketWatch notes that the experts behind the Global Retail Theft Barometer aren’t sure just why the rate of employee theft is so much higher in the US. However, they do know that most of the theft happens at the point of sale, occurring "when an associate purposely manipulates a transaction for the benefit of themselves or someone else," study co-author Ernie Deyle tells MarketWatch. Department stores have the hardest time with employee theft: It accounts for 59% of total shrinkage, compared to 50% of total shrinkage at grocery stores and 44% of total shrinkage at clothing stores. Small, concealable items, such as booze, batteries, tablet computers, and fashion accessories, are most attractive to shoplifters and thieving employees, Apparel Magazine reports.