Inventory shrinkage, a combination of employee theft, shoplifting, vendor fraud and administrative error, cost United States retailers over $31 billion last year according to the latest National Retail Security Survey report on retail theft, which analyzed theft incidents from 118 of the largest U.S. retail chains.

Recent articles  in BusinessWeek:

The Five Finger Discount "...Industry estimates place the average loss due to “shrinkage” (retailer lingo for combined losses due to shoplifting, employee theft, administrative errors, or vendor problems) at 1.6% of sales. Different sectors suffer more than others..."

Attention Shoplifters "... Remove 10 items from a shelf at once, for instance, or open a case that's normally kept closed and locked, and the system alerts guards sitting in a back room -- or pacing the sales floor -- with a chime or flashing screen ..."

Source of Inventory Shrinkage
% of Loss*
$ Lost
Employee Theft
48.5%
$15.1 billion
Shoplifting
31.7%
$9.7 billion
Administrative Error
15.3%
$4.8 billion
Vendor Fraud
5.4%
$1.7 billion
Total Inventory Shrinkage
 
$31.3 billion
*total not equal to 100% due to rounding

Source: National Retail Security Survey, November 2002
(based on 2001 retail sales and inventory shrinkage)