Shoplifting Declines, But New Threats Emerge for Retailers

The retail landscape is undergoing a significant shift. While in-store theft appears to be stabilizing thanks to increased security measures, criminals are adapting by targeting retailers through new channels—particularly phone scams.

According to the National Retail Federation (NRF), shoplifting and merchandise theft cases have declined for the first time in years as merchants invest in technology and employee training. However, this success has coincided with a dramatic rise in other forms of retail crime:

  • Phone scams increased by 69%
  • Loyalty fraud rose by 51%
  • Gift card theft/fraud jumped by 42%

“After years of rising in-store theft, retailers are beginning to see levels stabilize,” said David Johnston, NRF Vice President for Asset Protection. “But significant challenges remain as organized criminals continue to exploit vulnerabilities through more sophisticated fraud schemes.”

The trend reflects a broader pattern of criminal adaptation—as security measures improve in one area, thieves seek out new weaknesses to exploit.

Technology Adoption Varies Across Retailers

While retailers are investing in technology to combat these evolving threats, adoption varies significantly:

  • AI-based e-commerce fraud detection and generative AI tools for routine tasks are widely used
  • More advanced AI applications remain in the research/testing phase
  • Only 37% of retailers currently use generative AI for fraud prevention (despite 75% expecting AI-driven fraud to grow)

According to PYMNTS Intelligence, adaptive machine learning systems can reduce false positives by up to 85% while doubling compromised card detection—demonstrating the potential of targeted technology investments.

Balancing Security with Customer Experience

As retailers strengthen their defenses, a key challenge remains: preventing fraud without negatively impacting the customer experience. Research indicates that:

  • 85% of merchants cite this as their top concern
  • 51% expect fraud-management staffing costs to remain flat or decrease
  • 63% plan to increase spending on fraud-prevention technology

This suggests a strategic shift toward more efficient, targeted security solutions that minimize disruption while maximizing protection.