Shrink, the metastasis of retail stores….

  While working for a certain retail company, there was a manager that I met personally who told me the story of how she was fired because she didn’t use sound judgment in her approach when dealing with theft in the store. On this specific day, there was a customer who was stealing from the store. They were ecstatically engaged, walk to the fitting room, and given every other means of proper textbook customer service. After coming out of the fitting room, the customer decided to leave the store without paying for the merchandise. The manager then decided to try and get the merchandise back by chasing the assailant into the parking lot. What the manager did not know was that this assailant had a team of five and the team proceeded to assault the manager, leaving the manager in the parking lot with a concussion. The police were called, an ambulance was called, and the manager had received a broken orbital socket, along with a punctured lung. After the manager had recovered, the manager was brought in by loss prevention, human resources, the district manager, and was proceeded to be terminated because the manager did not follow policies in regards to loss prevention.

Retail theft is at an all-time high going into 2024. Retail vacancies are also at an all-time high. With governments, decriminalizing theft and making it a free-for-all. It leaves the stores vulnerable for crime. The stores most vulnerable and most important resources, (the people) are left to their own devices in order to come up with ways of deterring theft. As someone who has worked in the industry for over 20 years, most companies, first response is customer service because research shows it deters theft. In most cases, this is the correct approach, all it takes is a little eye contact, some engagement and most opportunistic potential thieves will back down. But for the 10% to 20% that this technique doesn’t work with have become quite a problem in the retail industry. What most people who shop in stores don’t know that shrink is a metric that the management team is held accountable for. Typically a shrink that is above 1% is an alert that needs immediate attention. Also, shrink comes in one of three forms. There’s internal shrink, external shrink, and paperwork errors.

Internal shrink is exactly what it sounds like, people who work for the company steal from within. That theft could be merchandise or actual money, they all falls under internal shrink. External shrink is when people who do not work for the company steal merchandise. This does not just fall under customers, but also companies that ship the merchandise or have external warehouses as well can also be responsible for external shrink. Finally, there’s paperwork errors, these means of shrink could manifest if a return is done incorrectly, or a void/post void is done where money or product isn’t electronically accounted for in the POS system.

All of these measures from one point or another have been budgeted for and in most cases are expected. There’s no such thing as a store that has zero shrink. But as of late, it’s gotten out of hand and these companies need to look at the data, in order to make the best decision for the company. The only problem with that is it isn’t what’s in the best interest of the people that work or shop in the store. Just recently, Target closed their Harlem location because the shrink has become an overwhelming deficit within the store. Now people who live close by or work close by will have to find other means in order to work or feed their families. San Francisco downtown is dealing with their own mass exodus of companies who are deciding to take their business elsewhere, leaving malls, and other high trafficking areas, deserted.

There are outstanding managers working for these companies that have stakes in the businesses success. These leaders care just as much as corporate does about the product sales, the shrink, their store family, as well as their own personal families. What are people to do? People who just want to go to work, do their job and go home. I find it very interesting that the retail workers were up in arms about the “fight for $15”, yet you hear nothing about safety and security. The environment shouldn’t just be about the pay but also be about the quality of that environment. If I were in charge of government, I would make any theft over $100 a felony. I would create laws in regards to assaulting retail workers also being a felony. 

   In conclusion, retail has been one of the most impactful industries in our economy. It has been used typically as a gateway job for teenagers and allows them to understand the idiosyncrasies of how to deal with customers and other pressure filled situations in a controlled environment. Stores were a coming of age place that people of all different walks of life could go to and have a meaningful experience. It’s a right of passage for an adolescent to go into a store and make a purchase by themselves for the very first time. There has to be a way to effectively, impact shrink, allow people to come to work, enjoy their work and make it a safe and profitable environment. Let’s make stores great again.