Why the Real Cost of Shrink Is What You Don’t Know

A New Way to Look at Shrink

When I started in retail asset protection more than 25 years ago, shrink was something we treated like weather: it came and went, and we just tried to brace for it. We didn’t have the tools to do much more than guess where losses were occurring. And while the industry has evolved in nearly every other area, most retailers still can’t tell you exactly what they’ve lost, when they lost it, or why. That should concern all of us.

Today, the biggest issue in shrink management isn’t the losses themselves. It’s the blind spots.

The Shrink Visibility Problem

Retailers conduct massive physical inventories, reconcile the books, and declare shrink. But what they rarely have is item-level, financial shrink visibility. Most can estimate losses by department. Few can pinpoint losses by SKU. Fewer still can identify when, where, or how it occurred.

This lack of visibility means expensive decisions are often made on gut instinct. Security budgets go to the wrong departments. Packaging changes get prioritized for the wrong items. And theft gets blamed when the real issue may be receiving errors, mis-shipments, or internal process failures.

RFID Isn’t New. But What’s New Is the Adoption

We’ve been talking about RFID in retail since the 1990s. Back then, I was skeptical. I once gave a presentation with a slide that featured a giant “NO” over the letters R-F-I-D. I didn’t believe it would ever replace EAS.

I was wrong.

RFID adoption has matured dramatically in recent years, especially after COVID. Retailers like Walmart, Macy’s, and Delta Airlines are proving its value every day. From supply chain pilots to shrink visibility programs, RFID is now being tested and scaled in real-world retail environments.

From Theory to Execution: Why Apparel Led the Way

Apparel was the obvious starting point. It’s high-SKU, high-margin, and notoriously difficult to manage without digital tracking. RFID enabled retailers to scan hundreds of garments in seconds and uncover in-stock issues they didn’t know they had.

But the value doesn’t end with inventory.

Macy’s, for example, has used RFID to investigate organized retail crime by scanning fenced goods at flea markets and tracing them back to stores. That’s only possible when each item has a unique identifier, essentially a digital license plate.

What’s Changed: Innovation in Packaging and Tag Performance

For years, RFID had legitimate limitations. Tags struggled with liquids and metals. Today, thanks to smarter packaging and improved inlays, those barriers are falling. Flag tags, foam backings, and RFID-friendly placement are opening the door to use cases in grocery, electronics, QSR, and even national defense.

The question isn’t whether RFID works. It’s whether your packaging is optimized to support it and whether your team knows how to execute against that data.

Why Execution Still Matters

Even the best RFID system can’t fix bad habits. A tag that isn’t scanned, a read point that’s skipped, or a process that isn’t followed all create holes in the data. Retailers don’t just need technology. They need accountability, consistency, and the operational will to act on what the data shows them.

The Bigger Picture: Visibility Beyond the Store

When implemented correctly, RFID creates a chain of custody that spans the entire retail ecosystem. It can tell you whether an item was shipped, where it was received, whether it made it to the sales floor, and whether it left the store properly. It doesn’t just flag losses. It tells you where to look.

And in a world where omnichannel fulfillment errors, returns fraud, and operational chaos are growing, that visibility is no longer optional.

Final Thoughts

RFID is no longer a futuristic concept or a niche tool for apparel. It’s a scalable solution for real problems facing retail today. As someone who spent most of his career trying to explain losses with imperfect data, I’m here to tell you: this is the visibility we’ve been waiting for.

And it’s time more retailers started using it.

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Brand L. Elverston

With a remarkable 25-year journey in the retail asset protection/risk mitigation realm, Brand Elverston brings a wealth of experience.

Formerly with Walmart's Asset Protection division after a distinguished military career, Brand is on a mission to impact the industry positively.

His passion lies in leveraging emerging technologies for innovative risk mitigation aligned with evolving retail pursuits.