Shrinkage refers to the unexplained or unauthorized loss of inventory, merchandise, cash or any other asset from a retail establishment by employee theft, shoplifting, organized retail crime, administrative errors and vendor fraud.

According to the NRA survey, most retail shrinkage is caused by employee theft, representing almost half of the losses (47 percent).

The survey also found that organized retail crime (ORC is a relatively low-risk, high-reward crime conducted by fairly sophisticated and skilled groups of criminals. The thefts usually involve specific small, high-priced items that have a high resale value on the black market, such as baby formula, coffee, steaks, cigarettes, smoking cessation products, eyeglass frames, over-the-counter health products, razor blades, fragrances, batteries, electronic goods, printer ink cartridges, power tools and athletic apparel) is on the increase, with retailers having invested little to curb the problem. Although many assume that most of a retail company’s shrinkage is the result of shoplifting, more thefts and losses from stores are internal, committed by employee’s.