Technology is "a valuable enabler to improve loss prevention," she writes, "but without focusing on the people that work in the retailing environment, initiatives will be trumped and shrink will remain the same." Proving that point, Hollinger's data shows that for 15 consecutive years shrinkage rates have been lower in retailers with low employee turnover.

Beyond solutions to the people problem, robust business intelligence applications and analytics tools can now monitor, analyze and report on fraud in near real-time. By implementing BI tools such as real-time or near-real time online fraud monitors, risk rating tools, exception-based reporting and case management, retailers struggling with shrink can improve data mining, analyses, reporting and performance management, Anand states.

What's critical here is the use of real-time (or as close to real-time) BI data. "Weekly or monthly reports on price overrides, voids and returns do little to stem the tide of shrink," Rosenblum writes. "With POS systems and cameras producing a steady stream of structured and unstructured data, there is no reason why retailers cannot get information to store managers and field personnel as soon as a pattern is recognized."

Security vendors are starting to offer products that can help. For example, StopLift has developed a system that uses computer-vision technology to identify sweethearting as it happens, according to a recent Boston Globe article. Grocery store Hannaford Bros. began testing the system in 2007 at several of its 160 supermarkets and "found up to 20 percent of cashiers were involved in some type of sweethearting."

"It's probably the biggest advancement for loss prevention technology in 20 years," said Tom Perkins, director of loss prevention at Hannaford, in the Globe article. "This is one of the more common types of thefts; it's just so easy to do and if you don't scan the items, there's no record of it."

Loss-prevention executives like Perkins have their work cut out for them. Not only is loss-prevention such a difficult task to track and stop, but Hollinger's 2006 data also showed that loss-prevention budgets as a percentage of sales (.43 percent) hit its lowest point ever. In other words, it's time for retailers to do more with less.

"With decreasing loss-prevention budgets and even less money for high-tech countermeasures," Hollinger writes, "more of the day-to-day responsibility for loss prevention is being shifted to overworked store managers and untrained, inexperienced sales associates."