External theft and organized retail crime account for 25% of retail losses, making them the largest single source of loss, according to a new study by IHL Group and Sensormatic Solutions. However, the Beyond Shrink: 2026 Global Total Retail Loss Study finds that supply chain issues, return fraud, employee theft, and administrative errors also contribute significantly.
Based on responses from 915 retail decision-makers, the study found that 71% of the largest retailers reported increased shoplifting, compared with 28% of the smallest retailers. Return fraud also increased, with 68% of respondents reporting a rise.
Supply chain losses, including supplier fraud, warehouse and sales-area shrink, and goods-receiving losses, account for 33% of reported losses. Administrative process errors cost an average of $103.40 per incident, nearly matching the $107 average cost of employee theft.
Organized retail crime is also growing internationally. Eighty percent of Australian respondents reported increases, compared with 71% in the United States and 67% in Spain.
Retailers reported spending an average of 1.2% of sales on loss prevention. Those spending more than 2% were the only group to report more declines than increases across loss categories. The findings underscore the importance of examining losses across the entire business, including supply chains, returns, and internal processes, rather than focusing primarily on shoplifting.
