Chapter 4: Suspected theft and loss
Associates see suspected theft every week, the record only knows what gets reported
Nine in ten associates notice suspected theft in a typical week. Most report it. But loss is wider than theft. Everything that goes unreported, unscanned, or unnoticed is stock that left the store without the system knowing.
Shrink figures count the loss that was detected and logged. Associates see more than that.
Nine in ten associates (89%) notice suspected theft at least once in a typical week, most often in the aisles, and three quarters report it straight away. Where they don’t, the reasons are safety and never having been told to, not indifference.
Loss is one more way the inventory record and the store truth drift apart. The question for a retailer is not only how much walked out, but how much of it the system ever saw.
9 in 10
Associates who notice suspected theft at least once in a typical week.
1 in 7
Associates who take no action when they notice suspected theft, so the event never reaches the record.
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Around nine in ten associates surveyed notice suspected theft in the aisles every week. That, of course, is bad for the bottom line. But what might be worse for the business is not knowing what you have in stock for the good customers who want to buy those same items and can’t.
Anne Mezzenga, CEO and Founder, Retail Field Report
What the floor sees
Suspected theft is noticed across the whole store.
| Location | Share |
|---|---|
| In the aisles | 83 |
| At self-checkout | 62 |
| During deliveries | 37 |
| In the backroom | 36 |
| Location | Share |
|---|---|
| In the aisles | 3.9 |
| At self-checkout | 3.9 |
| During deliveries | 3.0 |
| In the backroom | 3.2 |
Survey question: “In a typical week, how many times do you notice suspected theft either from shoppers or colleagues in each of the following places?” Left: share of all associates who notice it at least once a week in each location. Right: average times a week among those who do.
The aisle is where associates most often see it: 83% notice suspected theft there in a typical week, around four times.
Self-checkout comes next (62%), and those who notice it see it just as often, around four times. Just over a third notice it in the backroom (36%) or during deliveries (37%).
Read this as a map of where associates are, not only where loss happens. They spend most of their shift in the aisles, so that is where they see it.
Self-checkout is where the item leaves, and where a missed scan takes a second. An associate who happens to be looking catches some of it; the rest is only visible to a system watching the lane. The checkout lane is also where associates are pulled in most often: around twelve times a shift across age checks, locked products, missed scans, abandoned transactions, and walk-offs.
In stores with self-checkout, two in three associates are called to step in to attend a missed scan at least once a shift.
Almost every associate has seen it at some point: 95% say they have noticed suspected theft in their store.
Associates asked what they’ve seen in their stores
Put notes at self checkout to scan each item individually and not scan one item multiple times if the products are the same but differ in flavor or style. Each SKU is different and it changes on hands. Most customers don’t realize that.
Store Associate, US, Department Store
Customers shifting products from one container to another. In produce often things are packaged by weight and customers are removing product from the package they’re buying to lower their price. This changes the weight of the item left and throws off the count.
Store Associate, US, Grocery Supermarket
What Scandit has seen in stores
Shrink is measured when stock is counted. Between counts, the record only moves when someone tells it to, and loss is one of the things nobody tells it. In one grocery store, associates checked the shelf gaps the system said could be refilled from the backroom. Roughly one in three had nothing to refill with: the system showed stock, but there was none anywhere in the store. Capturing the shelf can’t say why it went missing, only that it did.
And gaps linger: at another retailer, around 90 products per store were missing from the shelf for a week or more. Not all of it is theft or loss, but all of it is stock the record thinks is there and the customer can’t buy.
What associates do, and why some don’t
When it comes to loss or theft, most associates do what they are told.
What employers tell associates to do about suspected theft
| Instruction | Share |
|---|---|
| Report it immediately | 74 |
| Don't approach the person | 36 |
| Record details afterwards | 32 |
| Approach and offer help (to deter) | 31 |
| No guidance given | 3 |
| Country | Share |
|---|---|
| UK | 61 |
| US | 49 |
| Canada | 40 |
| Poland | 28 |
| France | 24 |
| Germany | 19 |
| Italy | 15 |
Survey question: “What has your employer told you to do if you notice suspected theft?” Multiple answers allowed. Right: share told not to approach or confront the person, by market. Other and not sure (1% each) not shown.
Three quarters of associates report suspected theft immediately and a quarter (26%) approach the person. One in seven (14%) take no action and continue with their task, rising to one in five (21%) in the US.
Where associates don’t act, the reasons are not indifference. Of those who don’t always act:
- 43% don’t feel safe intervening
- 35% were never told they should
- 31% don’t see it as their responsibility
- 25% say “it may not be deliberate theft”
- 19% don’t believe anything will happen if they report it.
None of this argues for associates stepping in more. Many are instructed not to. More than a third of associates (36%) have been told by their employer not to approach or confront the person, rising to 61% in the UK and 49% in the US.
Ultimately the event should reach the record whether or not anyone intervenes. Today it only does so if an associate reports it. A store that is measured at the shelf and the checkout sees the gap regardless of who was watching.
Associates asked what they’d change
I believe we need more security walking around to keep an eye on things.
Store Associate, US, Department Store.
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In my experience managing hypermarkets, even trained store detectives often observed shoppers concealing merchandise without identifying the products. If the suspect wasn’t stopped and the items couldn’t be identified, there was no SKU-level information for an inventory correction. The store might run an unplanned count in that department, which consumes employee time and may reveal a shortage without ever connecting it to the incident. An incident report provides security intelligence. An inventory correction requires an identifiable stock discrepancy. Suspected theft is an observation, not an inventory-loss category.
Sebastian Rennack, Independent Retail Analyst & Consultant
The loss the record never sees
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Shrink counts the loss that was detected and logged, whatever caused it: theft, damage, expiry, or error. Associates see some of what never gets logged, and what they see is the floor, not the total.
A wider set of events changes what is on the shelf without changing the record: suspected theft that was noticed but never reported, items that left through self-checkout without a scan in the second nobody was looking, products moved between packs, a weighing error at the till, a delivery manifest scanned without anyone actually checking the box contents. None of this is counted in the official records, and all of it widens the gap.
The survey measures what associates notice, not how much is lost. What it shows is why loss belongs in a report about data: every event the floor sees and the system doesn’t is a correction the record still owes the shelf, and every event nobody sees is one it doesn’t even know it owes.
The view from HQ. Asked for an example of the data not matching the store.
Recently in a store we found a mismatch between physical stock and system stock. On checking, it was a customer’s mistake while weighing the product. He did not notice one more SKU was attached, so just an error.
Digital Transformation Manager
What this means for AI in store
Loss that is never recorded is a data gap before it is a shrink line. A forecasting or replenishment model reading the inventory record is planning around stock that has already left the store, and it only finds out when an associate counts the shelf, or when something counts it for them.
Until then every order it raises is sized to inventory that isn’t there.