Shrinkage, the term used mainly to describe the theft of stolen goods, is now being addressed more efficiently by the use of technology. According to the National Retail Federation, retail shrinkage accounted for approx. $50.6 billion in 2018. This encompassed shoplifting, returns fraud, employee theft and similar losses with theft by employees accounting for the bulk of this amount. Retailers are now adopting video analytics and technology to count shoppers and track their behaviors. The use of this technology is being used inside the store, parking lots and common areas of the shopping center.
Enough is enough and retailers are continuing to incorporate technology to help combat the issue of stolen goods and organized crime, the leading cause of inventory shrinkage. Newly designed technology uses artificial intelligence and point of sale analytics to reveal suspicious patterns of returns, voids, discounts and other sales reducing activities. This prompts the retail store to investigate the activity and determine the root cause. One of the main causes of shrinkage discovered by investigations is that company employees are working and colluding with customers on fraudulent returns. Did you know that 6.5% of all product returns include some sort of returns fraud? With 70% of retailers reporting an increase in organized crime activity in 2018, expect technology to play a bigger role on the monitoring of shoppers, employees and product inventory in order to crack down on their shrinkage problem!