Shrinky Dink

Price inflation is the biggest elephant in the room for the retail industry at the moment. Except that people can’t seem to stop talking about it. So it’s more like some other metaphor. With so much focus on inflation, it’s only natural that people would want to know the cause of this inconvenient phenomenon making their lives harder. Well, for customers like Harv Medford, there is only one possible cause for rising retail prices.

“It’s all this thievery that’s been going around!” says Harv as we walk the markethall floor of an Ikea in Centennial, CO. “These prices didn’t go up until these shoplifters showed up, and good, honest people like you and me gotta pay the price!”

Harv Medford, like many of the most well-informed retail customers, is active in several Facebook groups that take part in nuanced, properly researched discussions on such economic concepts as retail pricing, the (we assume positive) effects of DEI on business, infrastructure engineering, and the negative effects of insomnia on company profits expressed in the correlation between being too awake and bankruptcy. [Editor’s note: I don’t think you have that entirely correct.] 

As we walk through the tableware department, Harv is eating from an open package of those thin oatmeal cookies in his cart’s seat and tells me how out of control retail theft is affecting prices.

“They come in and do these smash-and-grabs,” he says, “and these companies aren't allowed to do anything about it. It costs them billions a year and that cost gets tacked onto the merchandise.”

He takes a bite out of another cookie.

“Bah! These aren't as good as the raspberry-filled ones,” he says before tossing the entire cookie package into a bin of dish towels.

Okay, I guess I assumed he was going to bring those up to the register.

“Look at this over here,” he says, brushing off his hands on his shirt and wheeling his cart over to a shelving section stocked with silverware.

He picks up a set of flatware and rips the cardboard packaging apart despite the fact that he could’ve easily just opened it normally. He pulls out a fork then bends it in half.

“Lookit that,” he says, holding it up for me to lookit. “Cheap garbage like this would be fine for a few bucks or so, but they want twelve dollars for this!”

He tosses the ruined box unceremoniously back on the shelf, its contents spilling out onto the floor in a clatter. Oblivious to the turning heads of the other customers and the defeated sigh of the worker covering this area, he kicks the silverware under the shelf and we move on.

While we understand that Harv’s information comes from good, reliable sources, there are actually many factors that contribute to cost of goods calculations that retailers use to determine pricing. Shipping costs, employee wage increases, and inflation gnomes who sneak into the store at night and raise prices under the cover of darkness are all causes of price increases according to The National Retail Federation (NRF). And yes it’s true that they also attribute inventory losses, or “shrink”, as the top cause of such increases, organized retail theft only accounts for either five or fifty percent of shrink losses depending on who you ask, when you ask them, and what legislation they’re currently lobbying for. Other causes of shrink include counting or scanning errors, misplaced items, unsellable returns, and damaged merchandise. And damaged merchandise. Damaged merchandise. Hey, Harv! I said “damaged merchandise”!

“Oh, don’t be silly,” says Harv who has moved on to the bathroom textiles section and is currently wearing a gray bathrobe whose packaging has probably been shoved into an alcove somewhere. “They expect a certain amount of stuff to get opened. How else am I supposed to know what comes in the package? That’s just part of running a business, it’s part of their operating cost.”

Okay, he just doesn’t get the core concept at all I think.

We left Harv in the bedding department as he was ripping open a packaged sheet set to see “how in the hell they even fit all that in there” to speak to Deb Kenton, a markethall sales manager.

“So they really say they lost more in theft than they do damages?” says Kenton. “I don’t know, I guess they have a lot of information I don’t, but see that cart over there?” She points to a cart overflowing with loose sheets, blankets, pillows, and miscellaneous bedding products. “That’s just from this department and just from today. I can’t imagine anyone’s ever stolen half as much as what we damage out here in a single shift, and again I just mean in this department. But that’s just from what I observe, I’m sure someone at a desk in an office who doesn’t even work for any one particular retailer knows better than those of us on the sales floor.”

We catch back up with Harv in the rugs department as he rolls his cart over a white sheepskin rug, staining it with wheel tracks, nonchalantly ruining something made from a once living creature and ensuring it will never be bought. We ask him how he feels about the notion suggested by some that retailers only started talking up theft recently to justify price increases that really only serve to inflate profit margins and benefit C-suite managers and company shareholders.

“That’s stupid,” says Harv. “That’s a stupid thing to say.”

While we are objectively stupid, the information is readily available that retail crime, with very few exceptions, has not significantly risen over the past few years as retailers tend to claim, suggesting that their motivation for pushing stories about large shoplifting rings and retail crime lords have more to do with pushing an agenda and price gouging than it does with reality, making customers pay higher prices to corporations that can afford to keep prices steadier.

“Well, I haven't heard anything about that,” says Harv who gets all his information from Facebook groups and corporate-owned media, “so it's probably just some commie garbage. Besides, if that were the case, then why does it matter if I break a few things? Wouldn't it be justified, by that logic, to cost them a little?”

Hmmm, Harv strangely makes a good point.

“It's because,” says sales manager Kenton, whom we approached with this ethical dilemma, “the cost of damaged merchandise comes out of our bottom line; affecting things like payroll budgets, sales bonuses, and yes, even pricing to an extent; while imaginary theft does not.”

“I don't go in for that kind of managerspeak,” says Harv, who is now in the home decor department where he's already torn open one of those wood hands to make it give the finger to passerbys. “All I can tell you is that the prices didn't go up until the theft started, and they ain't a coincidence.”

But you have to admit that the net cost of damaged merchandise can't be zero, right? I mean, that's gotta have some effect on prices.

“Nope,” says Harv, pushing a decorative hourglass off its display shelf to shatter and spread sand across the floor.

Okay, that's just excessive.

As our interview comes to an end, Harv Medford finally arrives at the cash registers with $16 worth of kitchen gadgets and raspberry-filled cookies. By our conservative estimate, he's damaged about $200 worth of now unsellable merchandise. But, as he repeatedly insists, that can't have any kind of effect on store pricing.

“Don’t say anything,” he says approaching a self-checkout kiosk, “but I'm not gonna scan this zester. It's not stealing, it's just the fee they owe for making me scan my own shit.”

Okay, whatever man, even though there’s a regular checkout like right there. Just “forget” to scan a sleeve of those raspberry cookies for me and I’ll look the other way.