Sean Higgins
Heading into the holidays, the retail industry is struggling with an increase in shoplifting and possible solutions to prevent theft. The rise may be an unintended consequence of another trend: automation.
Now that fewer and fewer people are paying attention to the shops, thieves feel empowered. Trade groups are pushing for new federal legislation to fix the problem. A better solution would be for companies to realize that employees are a greater anti-theft asset than they think.
Retail businesses are hit hard by theft. The National Retail Federation (NRF) trade group reported last year that “shrink,” the industry term for shoplifting, was responsible for $112.1 billion in industrywide losses in 2022, up from $93.9 billion in 2021. The NRF has not yet released any figures. for 2023, but an industry source indicated the problem has not abated.
A smaller study by Jack L. Hayes International, a loss prevention consultancy, focusing on just 22,000 stores, estimates total losses from theft at $7.1 billion in 2022, up from $4.9 billion in 2019 This includes everything from the traditional “five-finger discount” of common thieves taking things like candy bars to organized crime groups that target stores, swoop in and run out with as much as they can.
Major thefts don’t just happen in major urban centers like New York. Newsweek reports that Chattanooga, Tennessee, has the highest shoplifting rate in the country at 89.83 incidents per 100,000 residents. Next was Fayetteville, North Carolina, at 83:43. The caveat here is that stores often don’t report shoplifting incidents because they don’t feel it’s worth taking the time and effort to appear in court. That’s why most experts assume there are gaps in the data.
As many consumers have noticed, the industry is responding by keeping goods under lock and key. The National Retail Federation says stores are also looking for high-tech solutions to deter theft.
But attempts at legal solutions seem irresistible. For example, the Combating Organized Retail Crime Act would create an organized retail theft division within the Department of Homeland Security. CNBC reports that as of 2022, nine states have passed laws increasing the penalty for shoplifting and many other states are considering it. Florida has made “organized shoplifting” a misdemeanor.
A much more immediate, simpler solution is perhaps the oldest and simplest: hire more people to monitor the floors. Let more people keep an eye on the stores. This reduces opportunities for potential thieves and encourages store owners and employees to stop theft when it occurs. It will also make the stores more part of the community where friends and neighbors work and less like the big box machines they have become.
Anyone who has visited a major store in recent years, especially in urban areas, has seen items locked up and stores become ghost towns, largely without employees. Most stores now primarily use self-checkouts and have a skeleton team managing the location. Trying to buy something that’s been put away can seem like an annoying and time-consuming ordeal for a customer when an employee isn’t around. It can be especially annoying for those old enough to remember when they could just pick those things up and take them to the counter.
With so few people minding the store, is it any wonder that theft is becoming more common? After all, shoplifting is a crime of opportunity, and the opportunities have never been more plentiful. “There’s quite a bit of talk about self-service at checkout and how the reduced guardianship of store employees can lead to increased theft. And of course, thieves feel psychologically more comfortable/less problematic stealing a machine than stealing a person,” said Emmeline Taylor, professor of criminology at the University of London, in an email.
The executives who run the stores have realized the problem, says journalist Marc Fisher, author of a recent investigation into the rise of shoplifting for the Atlantic Monthly. They have trouble figuring out what to do, Fisher told this author.
“All the retail executives, security experts and criminologists I spoke to identified automation as one of the main causes of the current crisis. The shift in recent decades toward automating everything from checkout to store security (cameras, AI monitors, programs like the ones I described in the piece) has been accompanied by major workforce cuts, which in turn are partly came about as a cost-saving measure. and perhaps more often because of the difficulty in hiring and retaining store employees,” Fisher said in an email.
In short, there is still no substitute for a pair of human hands and eyes. For example, most stores have cameras monitoring all areas, but cameras still need someone to monitor them, in addition to people on the floor who can be alerted to stop potential thieves. Otherwise, the cameras are just an extended home movie system.
Self-checkout can also drive away paying customers. Amazon largely abandoned its experiment with cashier-less “Just Walk Out” supermarkets in early 2024 when it realized potential customers weren’t going for it. It often took hours for customers to receive their receipts, as purchases were monitored via cameras by remote cashiers. Many customers also didn’t like having to do tasks like weighing their products.
Interestingly enough, the major retail chains do not appear to employ fewer people overall. CVS Pharmacies, for example, had 7,800 stores in 2014 and employed 217,800 people, according to federal filings. They had an average of 28 employees per store. This year, CVS reports 9,400 stores and 300,000 employees, which equates to an average of 32 employees per store. Automation therefore does not lead to a reduction in the total workforce.
But the growth clearly hasn’t translated into more people working specifically in the stores. The automation seems to coincide with more recruitment elsewhere within companies. CVS announced in October that it would cut 2,900 jobs and specifically said the positions affected would be “primarily corporate positions.” Jobs in shops and pharmacies would avoid the axe, the company said, probably because they cannot afford to make further cuts.
The lack of store staff not only means there are fewer employees to spot shoplifting, but they are also more likely to be reluctant to stop thieves as they have fewer colleagues to support them should the situation escalate. Even when employees have the backbone to try, stores often don’t want them to take action for fear of injury and possible liability. NRF reported in 2023 that 41% of retailers surveyed said “no employee is authorized to stop or arrest shoplifters,” up from 38% in 2022.
DC-based communications director Susan Judith witnessed this while working for a major retail chain during the COVID pandemic. She declined to identify her client, but told the author: “They had a policy of not using shoplifters. Employees would get into trouble if they tried to stop theft. Needless to say, word got out that if you walked into one of these stores and helped yourself to merchandise, no one had the authority to arrest or even charge you. Amazingly, this led to an unsustainable level of shrinkage.”
One can understand the position of the stores. Prosecuting shoplifters will in most cases be more expensive than what the store could recover in court, and may cause hard feelings within the surrounding community. But it is clearly a self-defeating position if it opens the doors, figuratively and literally, to further theft.
And finally, the broader American culture seems more accepting of theft when it is framed as theft from faceless corporations, rather than individuals. The less people pay attention to a store, the less stealing in the store feels like stealing from people. This may be a result of socialism experiencing a resurgence among the youth. Lawmakers like Sen. Bernie Sanders of Vermont, Sen. Elizabeth Warren of Massachusetts and Alexandria Ocasio-Cortez of New York have all built supporters by embracing redistributive economics and disparaging corporations. People are less likely to have a problem defrauding a company if they think capitalism itself is wrong.
Management must remember that employees are an asset not only to labor productivity, but also for the intangible human qualities they bring to the shopping experience: the pride they bring in ensuring their department is clean and well stocked ; the help they can offer customers in looking for the right item; or the ability to respond to unusual situations, such as a customer experiencing a health emergency. Thieves are less likely to steal if they see multiple people watching them, rather than just one.
Solving the shoplifting crisis does not require comprehensive federal legislation, harsher criminal penalties, tighter security measures, or expanded oversight. More employees are needed. That’s something management can easily solve. It obviously costs more, but it is a worthwhile investment.
Sean Higgins is a research fellow specializing in labor policy for the Competitive Enterprise Institute.
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