I wonder if there is a study that shows how much firms internalize these costs. We could see a negative impact on other shoppers, even if it's marginal. The people who don't steal would be punished, while the people who do steal wouldn't be. It might even incentivize more people to steal -- especially since now it's looking like the social cost is lower as well.
From what I've found online, shrinkage accounts for 1-2% of a retailer's sales. It's small, but we're all likely paying 1-2% more to account for it. It's similar to how we all pay a little more to account for credit card fees, even if a portion of people only pay in cash.
I am comfortable now, but if I was still poor I'd probably think harder. My version of pausing now usually means I change my mind and don't buy the item. And if I get home and realize I missed something, I just think thats what they get for making me do their work.
I think about this often when I'm at the grocery store buying produce, knowing that some varieties are cheaper than others. My store is regularly out of green onions, but they always seem to have plenty of organic ones. When I search for green onions on the list, it's really up to me to pick the organic ones.
I am having trouble reconciling the demographics of the different generations with the income breakouts...particularly with the low percentage of baby boomers not scanning with the percentage of non-scanners making over $100K....is this entirely driven by the Gen X and Millennials non-scanning percentages?
One possible explanation is that the expected cost of getting caught may feel smaller for high-income shoppers. A small fine or embarrassment is less financially meaningful.
Alternatively, it could just be response bias, in which high-income respondents feel comfortable sharing they've stolen something while low-income shoppers don't.
Thanks! I'll take a look. I'm particularly proud of the Baby Boomer % only 2%. I think that jives with how I feel about self-check out...Although at our age, we probably forget to scan a few items... :-)
People always rationalize when they do something unethical. So it’s not surprising the stated reasons were all things that make it seem ok to steal, like the prices being “unfair” or it being a “necessity”. It’s not convincing to me that this reflects the underlying reality of the situation.
That’s actually very close to Becker’s argument. The rational model of crime just assumes they rationalize their behavior and respond to incentives anyway. Whether “prices are unfair” is a justification or a genuine belief matters less than the fact that theft rises when prices rise, even as monitoring increases.
Some people are simply immoral and do not have the kind of principles necessary for a high trust society to thrive. Their specific justification or its ease of construction does not interest me.
Imagine writing the same kind of article, but instead of petty theft about arson or murder or rape. "Lack of women willing to sleep with men turns them into economists." Absurd. So too here.
I’m not making a moral claim about theft, and I’m certainly not clarifying or excusing it. Saying “some people are immoral” may be true, but it doesn’t explain why theft rises in some environments and falls in others.
But absolute prices (almost) always rise. Surely it can’t be the prediction that theft always goes up every year. The model would probably predict that items with higher relative price changes have higher theft than those with lower relative price changes, right?
Or are we more talking about prices with respect to wages. But in that case it seems that wages outpaced inflation in 2025 so it’s not a good fit, at least with the high level data.
The fact that there is a growing number of self check out machines (instead of cashier people) tells us that the cost of hiring labor is high for the stores and that’s why they use machines. It also suggests that using the machines even with theft is still cheaper than hiring human cashiers.
So the stores do their math too and overall the net benefit of using machines is higher than that of hiring workers. One machine can replace 2 or more workers.
“In simple terms, higher prices are doing more to change behavior than increased monitoring is doing to deter it. The affordability pressure facing many shoppers is strong enough to outweigh a higher risk of getting caught.”
I was wondering whether this should be weighted based on the “consequence cost”. Society faced way worse financial crisis and yet it seems everyone was “stealing less” (assuming I m reading this article the right way). What was the stigma (meaning the social cost or reputational cost of being caught) at that time and what was the legal cost (meaning what was the punishment back in the days vs today). Long story short if the risk of getting caught today goes up but the consequences faced are going down the overall risk stays the same or could be even lower vs the past. Shouldn’t be this the way we should look at it ? Genuinely asking !
In any case, very very interesting article ! Thanks a lot for sharing.
The model is definitely based on individual costs and benefits, and shame can be a powerful cost for a lot of people. I was a bit surprised to see higher-income individuals admit to stealing more because I assumed the shame would be higher if caught.
I wonder if there is a study that shows how much firms internalize these costs. We could see a negative impact on other shoppers, even if it's marginal. The people who don't steal would be punished, while the people who do steal wouldn't be. It might even incentivize more people to steal -- especially since now it's looking like the social cost is lower as well.
From what I've found online, shrinkage accounts for 1-2% of a retailer's sales. It's small, but we're all likely paying 1-2% more to account for it. It's similar to how we all pay a little more to account for credit card fees, even if a portion of people only pay in cash.
I am comfortable now, but if I was still poor I'd probably think harder. My version of pausing now usually means I change my mind and don't buy the item. And if I get home and realize I missed something, I just think thats what they get for making me do their work.
I think about this often when I'm at the grocery store buying produce, knowing that some varieties are cheaper than others. My store is regularly out of green onions, but they always seem to have plenty of organic ones. When I search for green onions on the list, it's really up to me to pick the organic ones.
I am having trouble reconciling the demographics of the different generations with the income breakouts...particularly with the low percentage of baby boomers not scanning with the percentage of non-scanners making over $100K....is this entirely driven by the Gen X and Millennials non-scanning percentages?
I wish they shared the underlying response data, but the original article only has charts. You can check out some more of their demographic breakdowns here: https://www.lendingtree.com/debt-consolidation/checkout-theft-survey/
One possible explanation is that the expected cost of getting caught may feel smaller for high-income shoppers. A small fine or embarrassment is less financially meaningful.
Alternatively, it could just be response bias, in which high-income respondents feel comfortable sharing they've stolen something while low-income shoppers don't.
Thanks! I'll take a look. I'm particularly proud of the Baby Boomer % only 2%. I think that jives with how I feel about self-check out...Although at our age, we probably forget to scan a few items... :-)
People always rationalize when they do something unethical. So it’s not surprising the stated reasons were all things that make it seem ok to steal, like the prices being “unfair” or it being a “necessity”. It’s not convincing to me that this reflects the underlying reality of the situation.
That’s actually very close to Becker’s argument. The rational model of crime just assumes they rationalize their behavior and respond to incentives anyway. Whether “prices are unfair” is a justification or a genuine belief matters less than the fact that theft rises when prices rise, even as monitoring increases.
Some people are simply immoral and do not have the kind of principles necessary for a high trust society to thrive. Their specific justification or its ease of construction does not interest me.
Imagine writing the same kind of article, but instead of petty theft about arson or murder or rape. "Lack of women willing to sleep with men turns them into economists." Absurd. So too here.
I’m not making a moral claim about theft, and I’m certainly not clarifying or excusing it. Saying “some people are immoral” may be true, but it doesn’t explain why theft rises in some environments and falls in others.
Didn't mean to imply that you were. Sorry if I was unclear.
The justification becomes easier. This is my intuition, which your analysis comports with (and puts numbers to!)
But absolute prices (almost) always rise. Surely it can’t be the prediction that theft always goes up every year. The model would probably predict that items with higher relative price changes have higher theft than those with lower relative price changes, right?
Or are we more talking about prices with respect to wages. But in that case it seems that wages outpaced inflation in 2025 so it’s not a good fit, at least with the high level data.
I think the key is that the benefit is relative and marginal, not absolute. A lot of people cited affordability, which combines prices and incomes.
The fact that there is a growing number of self check out machines (instead of cashier people) tells us that the cost of hiring labor is high for the stores and that’s why they use machines. It also suggests that using the machines even with theft is still cheaper than hiring human cashiers.
So the stores do their math too and overall the net benefit of using machines is higher than that of hiring workers. One machine can replace 2 or more workers.
“In simple terms, higher prices are doing more to change behavior than increased monitoring is doing to deter it. The affordability pressure facing many shoppers is strong enough to outweigh a higher risk of getting caught.”
I was wondering whether this should be weighted based on the “consequence cost”. Society faced way worse financial crisis and yet it seems everyone was “stealing less” (assuming I m reading this article the right way). What was the stigma (meaning the social cost or reputational cost of being caught) at that time and what was the legal cost (meaning what was the punishment back in the days vs today). Long story short if the risk of getting caught today goes up but the consequences faced are going down the overall risk stays the same or could be even lower vs the past. Shouldn’t be this the way we should look at it ? Genuinely asking !
In any case, very very interesting article ! Thanks a lot for sharing.
The model is definitely based on individual costs and benefits, and shame can be a powerful cost for a lot of people. I was a bit surprised to see higher-income individuals admit to stealing more because I assumed the shame would be higher if caught.