Retail Shrink: Why Old-School Security Doesn’t Work

Retail theft – often referred to as “shrink” in the industry – remains a persistent and growing problem despite widespread use of cameras, electronic tags, and security personnel. Recent data shows retail shrink reached 1.6% of sales in 2022, up from 1.4% the year before. That translated to $112.1 billion in losses in 2022 alone. If traditional anti-theft measures were truly effective, we wouldn’t see such alarming numbers. So, why do security cameras, EAS tags, and guards still fall short? Let’s examine the limitations and blind spots of these methods and why once merchandise leaves the store, it’s usually gone for good. Security Cameras: Watching but Not Stopping Security cameras are nearly ubiquitous in retail over 80% of retailers use CCTV as a key part of their security. Intuitively, cameras should deter theft by increasing the chance that a thief is caught on tape. In reality, cameras often serve more as after-the-fact recorders than active theft stoppers. Consider that one retail study found less than 1% of recorded surveillance video is ever reviewed by staff. Many shoplifters know this; they realize a camera that no one is actively watching “poses little if any risk” to them in the moment. In essence, a typical store CCTV system is not actually preventing the theft – just recording it. Unless someone is monitoring feeds in real time and ready to intervene, a thief can walk out before anyone even notices. Some savvy criminals disguise themselves or avoid obvious camera sightlines. If footage is only checked after inventory goes missing, the merchandise is long gone. Blind spots and practical limitations of CCTV include: Coverage gaps: Poor camera placement or large store layouts can leave blind spots that thieves exploit. Retailers must carefully plan camera locations, yet even then, determined shoplifters may find corners or crowded aisles not fully visible on video. Delayed response: Live monitoring of dozens of cameras is challenging. Often, staff discover a theft on camera only after the fact, during investigations. By the time someone reviews the footage, the thief may have hit other stores or sold the goods. Passive deterrence: Visible cameras do deter some casual shoplifters – research indicates theft likelihood decreases when CCTV is clearly present. However, habitual or professional thieves often aren’t scared of cameras, especially if they suspect no one will confront them immediately. They calculate that even if recorded, the chance of being identified and caught later is low. Reliance on human action: A camera can’t stop a person; it can only assist a human or provide evidence. If store policy or staffing levels prevent a timely confrontation (as we’ll discuss), the camera by itself won’t save the merchandise. Reality Check: Security cameras are an essential part of retail security, but largely a reactive tool. As one security expert noted, unless cameras are actively monitored, they’re “ineffective at preventing crime” in real time. They help investigate and bolster prosecutions, but on their own, cameras seldom prevent theft at the moment it occurs. EAS Tags and Alarms: Deterrent with Loopholes Electronic Article Surveillance (EAS) systems – those security tags and exit gate alarms – are another staple of retail loss prevention. Roughly 80% of U.S. retailers use EAS tags or labels on merchandise. The idea is straightforward: if someone tries to walk out unpaid, an alarm sounds to alert staff. In practice, EAS has significant blind spots and is far from foolproof. Limitations of EAS tags and anti-theft alarms: They only work inside the store. An EAS gate alarm blares after a shoplifter crosses the threshold. At that point, the thief is literally on their way out. If no one intercepts them immediately, the alarm might as well be a farewell siren. In many stores, it’s common to hear an alarm and see no one react – staff may be busy or uncertain who set it off. One retail security study candidly observed that most of the time when an EAS alarm sounds, “little is done and the shopper departs.” In other words, the thief often escapes right through the ringing alarm. False alarms undermine effectiveness. EAS systems are notorious for false triggers. Shoppers sometimes set off alarms simply entering a store due to “tag pollution” – items from another store in their bag still have live tags. Such false alarms train both employees and customers to tune out the alerts, assuming it’s a mistake. A survey by Marshall Field & Co. decades ago found shoplifting apprehensions dropped 60% post-EAS installation – not necessarily because theft stopped, but possibly because thieves were deterred and staff became desensitized to frequent alarms. When alarms cry wolf too often, genuine theft attempts slip by. Easy for professionals to foil. EAS deters amateurs, but experienced shoplifters have many tricks to defeat it. They may remove or disable tags in dressing rooms. Some use “booster bags” (shopping bags lined with foil) that shield tagged items from detection. Others exploit that deactivation pads at checkout sometimes miss a tag. Professional thieves know the technology’s loopholes. As a result, organized retail crime rings often treat EAS as a minor obstacle, easily overcome with planning. Limited prevention rate. While EAS vendors claim impressive results (one even suggests a 60–80% theft reduction with EAS in place, real-world impact is more modest. For example, a supermarket industry survey found that using EAS tags reduced shrink by about 19% on average. That’s a helpful dent in losses, but it means the majority of theft still got through. Other research notes EAS mostly stops “occasional” shoplifters, and “informed shoplifters” quickly figure out how to neutralize tags or avoid them. No physical barrier. Importantly, an alarm is not a gate. Unlike library anti-theft systems that lock doors, retail EAS systems don’t physically prevent exit. They rely on the presence of attentive staff or security at the door. If a thief sprints out or calmly ignores the alarm, the tag’s job is essentially over. The merchandise has left the premises, alarm or not. In summary, EAS tags add a layer of deterrence – many thieves will think twice if they see tags on items or know alarms might sound. But tags and beepers alone are far from a catch-all solution. They must be combined with human response to be effective, and even then, determined thieves have ample ways to slip through the cracks. Security Guards and LPOs: Finite and Fallible What about human security – the uniformed guard at the door or the plainclothes loss prevention officer (LPO) patrolling the aisles? A watchful human can confront a shoplifter in the act, something no camera or alarm can do. However, relying on security guards and store detectives has its own set of problems that thieves readily exploit. Key challenges with security personnel: Limited coverage and numbers. A store might have one or two guards on duty (if any). They simply cannot be everywhere at once. Shoplifters can time their moves for when the guard is on the opposite side of the floor or distracted. In large stores, it’s easy for a thief to operate in an area out of the guard’s immediate view. Unless a store can afford a small army of guards, there will always be blind spots in human coverage. Policies against physical intervention. Concern for safety and liability has led many retailers to adopt no-chase or hands-off policies. In fact, 41% of retailers say their employees are not permitted to stop or apprehend shoplifters at all. Often, only designated loss prevention staff or managers can even approach a suspect, and even then, with strict conditions. Many companies explicitly tell staff not to chase thieves out of the store or physically confront them, to avoid injuries or lawsuits. This means a guard’s role may be limited to observing and reporting, unless the situation is extremely clear-cut and safe to intervene. Shoplifters know that in many cases, store security won’t risk a physical altercation over merchandise – especially if the thief looks potentially dangerous. Safety threats and escalation. Theft has become more brazen and, at times, violent. 88% of retailers report that shoplifters have grown more aggressive and violent in recent years. Guards and LPOs are trained to avoid undue risk – no one wants a minor shoplifting incident to turn into an assault or worse. If a thief brandishes a weapon or even threatens one, security must back off. Thieves have leveraged this; some intentionally use intimidation, knowing it will grant them safe passage. The more aggressive the criminal, the less likely store security is to try to stop them on the spot. Legal constraints and proof. Even when a security officer spots suspicious behavior, they typically must follow strict protocols to detain someone legally. Often, they need to witness the person conceal merchandise, attempt to leave without paying, and never lose sight of them in the process. If any step is missed, the detention could be deemed unlawful. These requirements create a high bar for action – many thieves are adept at exploiting moments of distraction or blending into crowds to break that observation, forcing guards to stand down. It only takes a second for a suspect to ditch the item or slip away in a busy store if they sense they’re being tailed. Volume of incidents. The sad fact is that the vast majority of shoplifting incidents do not end with a security stop. Retail studies estimate that only about 1 in 48 shoplifters is ever caught. That’s roughly 2%. And of those caught, only about half are turned over to police; the rest are simply released with a warning or merchandise recovered. These numbers underscore how easy it is for thieves to steal multiple times without facing consequences. Store security teams, no matter how diligent, catch a tiny fraction of offenders – the rest slip by undetected or unchallenged. For every shoplifter apprehended, dozens more walk out the door free. To be sure, a trained, observant LPO or an imposing guard at the exit can deter many opportunistic thieves. Shoplifters often avoid stores known for tough security staff. But criminals also adapt their tactics (e.g. shoplifting in groups to overwhelm a lone guard, or sending decoys to distract personnel). Ultimately, guards are human – they get busy, tired, or outnumbered. Retailers also have to consider cost: staffing more guards is expensive, and even then, the liabilities remain. Many chains have effectively decided it’s better to let the product go than risk injury or lawsuits. This is why you may see videos of thieves boldly walking past powerless employees. It’s not that the employees or guards “failed” – often, they’re explicitly told not to engage. Unfortunately, the thieves count on this restraint. Once Merchandise Leaves, It’s (Almost) Gone for Good One thread connects all these traditional measures: they primarily focus on stopping theft inside the store or at the moment of exit. But what happens if those measures don’t work and the thief successfully gets out the door with the goods? At that point, recovering the stolen merchandise or catching the culprit becomes profoundly difficult. Why recovery rates are abysmal once a theft occurs: Tiny chance of recovery: National statistics make it clear that most stolen goods are never recovered. According to FBI data, the average recovery rate for stolen property (excluding automobiles) is under 4%. In other words, 96% of the time, if an item is stolen, it’s not coming back. For retailers, that item is written off as a loss. Unless the thief is caught on the spot or very shortly after, the merchandise will likely be sold on the black market, used, or otherwise disappear. Police occasionally bust fencing operations or organized theft rings (recovering large stashes of goods), but those are the exception rather than the norm. Low priority for law enforcement: Shoplifting, especially at low dollar values, is often considered a minor crime. In many jurisdictions it’s a misdemeanor. Police departments dealing with violent crime and high-priority calls may not dedicate significant resources to chasing down a stolen $50 item – especially if the thief is long gone. By the time store staff file a police report and investigators look at security footage, the trail is cold. Unless it’s part of a larger organized retail crime case or the thief is a repeat offender that police recognize, the chances of an individual shoplifting case being actively investigated are slim. Identification challenges: Cameras might have captured the thief’s face or license plate, but identification is tricky if the person is a repeat offender using disguises or if the image quality is poor. Even with a clear video, police need to be able to identify that individual among thousands. Facial recognition tech is still not widely used at scale for this, and privacy issues abound. Without an ID or a known suspect, a video of someone stealing is just evidence sitting in a file. Rapid disposal of goods: Organized retail thieves work fast. Stolen merchandise might be handed off to an accomplice outside, sold to a fence the same day, or even listed online within hours. By the time anyone tries to recover it, it’s gone through multiple hands. High-value items like electronics, designer clothes, and power tools often end up on resale websites or swap meets quickly. The longer it takes to pursue a case, the colder it gets – and most retailers lack the resources to track their goods once they’re off-premises. Jurisdiction and enforcement gaps: If a security officer didn’t catch the thief in the act, now it becomes a law enforcement issue. Unless the theft was large enough to be a felony, realistically not much will happen once the thief is off property. Some retailers don’t even bother reporting small thefts to police because they know the outcome – a report for insurance records, but no real chase. Thieves are well aware of threshold values (e.g. keeping a theft below the felony amount) to minimize the response. Once they’re outside the store’s domain, the onus falls on an overstretched criminal justice system to hold them accountable, and that rarely results in recovery of goods. Simply put, traditional store security is largely front-loaded – it’s about deterring and catching theft before or as it happens. If that window closes, the tools lose effectiveness. Cameras might give you a picture of who stole, and tags might have beeped, but now recovering the item is a whole new challenge. The statistics bear this out: retailers have collectively reported billions in losses, yet only a sliver of stolen inventory is ever seen again. Industry experts actually suggest that to tackle organized retail crime, the focus needs to extend beyond the store – targeting the networks that resell stolen goods (the “fences” and online marketplaces). That’s because once merchandise walks out the door, the battle is essentially lost on the retail floor. The next opportunity to fight theft is upstream: identifying the thief later or preventing them from easily profiting off the crime. The Shrinkage Problem Persists Considering all these limitations, it’s no surprise that retail shrink hasn’t been solved by cameras, alarms, and guards – and likely won’t be, on their own. These methods each play a role and can mitigate losses, but shoplifters and organized theft rings continuously adapt to exploit their weaknesses. Meanwhile, overall losses from theft have been increasing. The average shrink rate (all losses from theft, fraud, errors, etc.) rose to 1.6% of sales in 2022, and external theft (shoplifting including organized retail crime) makes up roughly a third of that shrink. In dollar terms, external theft is costing U.S. retailers on the order of $45–70 billion per year, despite the proliferation of traditional security measures. Let’s recap with some telling statistics about the effectiveness of traditional store security: Cameras everywhere, but thieves undeterred: Over 80% of retailers use CCTV , yet only ~2% of shoplifting incidents result in an apprehension. Many thieves simply don’t fear unmonitored cameras. One retailer admitted 99% of surveillance footage goes unwatched– a clear sign that footage often serves more for evidence after the fact than for stopping theft in real time. EAS alarms often result in no stop: After an EAS alarm, if “little is done and the shopper departs” (as noted earlier), that alarm has effectively failed. False alarms and clever workarounds mean beepers alone only catch unsophisticated attempts. Even with EAS, a large majority of theft still happens – one survey found EAS cut shrink by ~19%, leaving the other 81% of losses untouched. Guards can’t chase or confront in many cases: With 4 in 10 retailers banning employees from physically stopping shoplifters, a security guard’s presence is primarily a deterrent by visibility. When push comes to shove, if policy says “hands off,” thieves can take advantage. The outcome is that many guards end up as witnesses rather than interventionists. Recovery rates under 5%: Once products are stolen and leave the premises, less than 4% are ever recovered on average. That highlights how end-of-pipe solutions (after-theft police work, etc.) recoup only a drop in the bucket. Essentially, 95 out of every 100 stolen items stay stolen – a stark metric of failure in terms of ultimate loss prevention. Shrink not shrinking: Despite billions spent on security technology and personnel, shrink rates have hovered around 1.5–2% for decades, and recently ticked upward. The problem of retail theft at scale remains unsolved. High-profile retailers have even closed stores in certain areas citing uncontrollable theft, a sign that traditional measures hit a ceiling of effectiveness in the face of rising theft patterns. Conclusion: Why “Old-School” Security Isn’t Enough Traditional store security measures – cameras, tags, alarms, guards, and loss prevention staff – create a necessary baseline defense. They undoubtedly prevent some thefts and catch some thieves, especially impulsive shoplifters or poorly planned attempts. However, as we’ve seen, they have significant blind spots. Criminals exploit the gaps: unmonitored cameras, alarm fatigue, policies that constrain security personnel, and the freedom once outside the store. The result is a cat-and-mouse game where retailers add locks, alarms, and cameras, and thieves find new ways around them. It has become clear that these methods alone have not solved the shrinkage problem – nor are they likely to as theft (particularly organized retail crime) grows more sophisticated. Expert opinions in the industry increasingly call for a more holistic approach. For example, retailers are investing in advanced solutions like AI-enabled cameras and remote monitoring, and working with law enforcement to target the resale of stolen goods. The key insight from criminology is that the certainty of being caught is a better deterrent than any camera or alarm. In plain terms, if thieves believe they won’t be stopped or caught, some will not be dissuaded by an outdated camera or a beeping tag. In its current state, traditional in-store security provides diminishing returns. Stores can’t practically catch every thief, nor eliminate all opportunities to steal without turning shopping into a locked-down, inconvenient experience for honest customers. This is why we’re seeing retailers try new tactics – from locking up more merchandise to using data analytics and facial recognition (controversially) to identify repeat offenders. Some are even hiring “virtual guards” to monitor cameras off-site and intervene over loudspeakers, aiming to boost that sense that someone is watching and will react in real time. Ultimately, the failure isn’t that cameras, tags, and guards are useless – it’s that on their own, they only address part of a multifaceted problem. They are necessary but not sufficient. Professional thieves will continue to find the weak links in traditional defenses. And as long as the vast majority of shoplifters face no immediate consequences (remember, 98% get away in the moment), the theft epidemic will continue to challenge the retail industry. Retailers and security professionals now recognize that solving shrinkage demands layered solutions and new thinking. That means integrating traditional methods with better training, smarter technology, and collaboration with law enforcement and communities. It might involve redesigning store layouts to remove hiding spots, leveraging predictive analytics to spot theft patterns, or lobbying for stricter penalties against serial offenders. Importantly, it means addressing why people steal – from opportunistic teenagers to organized criminal networks – rather than just treating the symptoms with more gadgets. The takeaway: Cameras, EAS tags, and security guards each play a role in retail security, but they haven’t eliminated theft because of their inherent limitations and the adaptability of thieves. They’re fighting an old battle while the nature of retail crime has evolved. To truly move the needle on shrink, retailers must go beyond these traditional tools and create an environment where getting away with theft is far harder than it is today. Until then, we’ll continue to ask why the shoplifter with a full cart strolling past a security camera seems so confident – unfortunately, they already know the answer.