Rethinking Retail Theft: From Crisis Talk to Data-Driven Reality

The Ratio of Hype to Data

After 2020, headlines screamed of a retail crime crisis, citing a sharp rise in organized theft and losses from shrink. But a Council on Criminal Justice analysis paints a more nuanced picture. In the first half of 2023, reported shoplifting climbed 16 percent over 2019 levels, but 17 of the 24 studied cities actually saw declines. By early 2025, those reports fell 12 percent on average.

Clarifying the “Shrink” Metric

Shrink tracks inventory loss, yet it covers far more than theft. It includes spoilage, vendor fraud, and administrative errors. Even so, gains are visible. Walmart’s CFO told investors that shrink has become better managed. Target expects 2025 shrink to fall below pre-pandemic levels, and Home Depot reports “measurable improvements” where it has worked closely with prosecutors.

Some of the confusion over shrink began during the pandemic. Stores that closed in 2020 saw shrink dip as customers shopped online. When stores reopened and inventories were physically counted in 2022, losses were greater than expected. That reset inflated shrink figures, leading to alarming headlines before retailers adjusted their estimates.

A Mixed Story in the Data

The National Retail Federation reported that between 2022 and 2023, shoplifting incidents rose 26 percent, and 42 percent of retailers said those incidents included threats or violence. An international white paper from Sekura Global found that, compared with 2019, reported incidents jumped 93 percent and related financial losses rose 90 percent. Freedom for All Americans, a nonprofit policy group, projects that theft losses in the United States could exceed 115 billion dollars by the end of 2025, with California and New York running well above the national average.

Policy Shifts and Enforcement

Public policy has been another driver of change. According to the International Council of Shopping Centers, states have passed more than 80 new laws since 2021 aimed at combating organized retail crime. These laws range from lowering thresholds for felony charges to requiring online marketplaces to verify third-party sellers, as mandated by the federal Inform Consumers Act passed in 2022.

Governor Kathy Hochul announced in August that retail theft in New York City had fallen 12 percent in the first half of 2025, while the rest of the state recorded a 5 percent decline. She credited 40 million dollars in new funding for retail crime task forces and legal changes that allow prosecutors to combine multiple incidents into a single felony case.

California has taken a similar approach, enabling prosecutors to pursue organized groups more aggressively. The Department of Justice, however, has cautioned that the certainty of being caught is often a more effective deterrent than harsher penalties.

Technology in the Spotlight

Retailers are also investing heavily in technology. In the San Francisco Bay Area, the San Francisco Chronicle reported that a hardware store cut shoplifting incidents in half after installing Veesion, an AI system that analyzes customer movements for signs of theft. A research team recently published a model called Shopformer, designed to detect shoplifting through pose recognition rather than raw video, in order to preserve privacy.

In the United Kingdom, some retailers are testing facial recognition as a theft deterrent. The Guardian reported that Sainsbury’s is trialing the technology in select stores, while Tesco faced criticism for security checks linked to its “Scan as You Shop” system. These measures may reduce losses but can frustrate customers, and some stores have reported sales drops of 15 to 25 percent for products placed behind locked cases.

Small Businesses Remain Vulnerable

For small retailers, losses carry even greater weight. A Capital One Shopping survey found that 85 percent of small U.S. retailers experience shoplifting at least once a month, with average monthly losses of 1,686 dollars. Two-thirds of these businesses have raised prices or invested in cameras to cope.

In Scotland, The Scottish Sun reported on shopkeepers investing in security upgrades after facing threats. The Scottish government recently allocated three million pounds to support retailers with anti-theft measures, underlining how the problem extends beyond large chains.

The Ripple Effect on Consumers

Retail theft also leaves indirect costs for shoppers. A study published on the academic platform arXiv examined cannabis retailers in Washington state and found that robberies pushed prices up by 1 to 1.8 percent. If applied nationally, the researchers estimated the effect would equal a hidden “crime tax” of nearly 34 million dollars.

Closing Perspective

The narrative of a nationwide shoplifting crisis was louder than the data initially supported, but the industry’s concerns were not unfounded. Theft remains a costly problem, especially for smaller businesses and in high-risk markets. Encouragingly, shrink rates are improving at major chains, policymakers are devoting resources to enforcement, and new technologies are starting to show results.

The challenge now is balance. Retailers must protect their stores without alienating customers, law enforcement must focus on deterrence as much as punishment, and policymakers must ensure that small businesses have the resources to adapt. The story is less about panic and more about progress, shaped by data, collaboration, and practical solutions.

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