WASHINGTON – Theft, fraud and other “shrink” cost retailers about $61.7 billion in 2019, up from $50.6 billion the year before, the National Retail Federation said Tuesday.

According to the National Retail Security Survey released Tuesday by the NRF, the number of shoplifting, organized retail crime and employee theft incidents were all up last year.

“Between an increase in incidents and new ways to steal, shrink is at an all-time high,” NRF vice president for research development and industry analysis Mark Mathews said. “Loss prevention experts are facing unprecedented challenges from individual shoplifters to organized gangs to highly skilled cybercriminals. Retailers are responding with both traditional methods and the latest technology, but this is an ongoing challenge that can only be won with the support of lawmakers and law enforcement.”

Shrink averaged 1.62% of sales in 2019, versus 1.38% in 2018. It had been averaging 1.4% in recent years. Cases were up, with an average of 560 employee theft apprehensions per retailer surveyed (up from 323 last year) and 689 shoplifting/organized retail crime (ORC) apprehensions (up from 509).

The NRF notes that many states have changed their laws to increase the amount that someone needs to take to be charged with a felony. In response, members of ORC gangs are stealing less, but more often, to stay below the felony threshold and avoid prosecution. The trade group wants repeat offenses combined and counted toward felony thresholds.

The largest increase in fraud occurred in stores, according to 49% of those surveyed. But 19% cited multichannel sales, including those where purchases are made online but the products are picked up in-store. Typical fraud incidents range from the use of stolen credit cards or card numbers and gift card scams to the return of stolen merchandise for refunds.

Retail loss prevention teams say issues that have moved up on their list of priorities over the past five years include: organized retail crime (cited by 61%), e-commerce and cybercrimes (59%), internal theft (58%) and return fraud (54%). To counter these threats, retailers are turning to such technology as point-of-sale analytics, security cameras and wired alarms on high-value merchandise, as well as online training for employees. Fifty-two percent of those surveyed said their companies were using more technology to fight shrink, 36% said they were increasing loss prevention budgets and 30% said they were adding staff.

The survey of 69 LP and asset protection executives from a variety of retail sectors was conducted from February 24 through April 21. Appriss Retail sponsored the study.