Spotlight on Shrinkage: Secure access, reduce losses

“Retailers are reporting inventory shrinkage as high as 3 percent of revenue.” — Andy Szanger, CDW (BizTech Magazine)

Shrinkage is a multi-billion-dollar challenge. It hits margins directly: stock disappears for reasons other than sales — often due to admin errors, operational loss, vendor fraud, employee theft and shoplifting.

#1 Customer shoplifting

• Frequently the largest single driver.
• Cost-of-living pressure correlates with rising incidents.
• Self-checkout/Scan & Go without safeguards increases risk (mis-scans, barcode swaps, walk-offs).
• Operators of these formats report higher average shrink.

#2 Employee theft

• Among the biggest contributors to shrink.
• Typical patterns: unauthorized discounts, unlogged removals.

#3 Administrative / human errors

• In-store, warehouse or back-office mistakes (receiving, counts, data entry) compound quickly.
• Process gaps create hidden losses.

#4 Vendor fraud

• Manipulated billing (e.g., invoicing undelivered goods), sometimes with employee collusion.
• Weak auditing elevates risk.

#5 Operational loss

• Breakage, supply disruption and expiry (notably pharma, cosmetics, food & beverage).

Shrink reduction: strategy & tech

A robust program deters internal/external theft, reduces human error, counters vendor fraud and prevents accidental loss.

• Security zones near self-checkout; tagging (RFID) for high-value items.
• Process reviews, disciplined inventory, tight receiving controls.
• Training (fraud red flags, checkout discipline, expiry management).
• Digital transformation for transparency and traceability.

Vending machines instead of self-checkout

Vending provides 24/7 access with controlled dispensing — products release only after successful payment. Compared to open self-checkout, this lowers mis-scans and walk-offs.

• Closed dispensing: Collection only after authorization.
• Transparent logs: Each transaction is digitally traceable.
• Optional ID/age checks: Compliant dispensing of restricted items.
• Real-time inventory: Fewer errors and less waste from expiry.

“44.5% of retailers are prioritizing loss prevention investment.” — Security Magazine

“The shift toward intelligence-based loss prevention will continue.” — Jia Wertz, Forbes

Curious how vending-based pickup and sales can cut shrink? Contact us — we’re happy to help.