Stolen Goods Sell for 70-80% of Retail, and Retail Theft Is Now an Industry
Stolen merchandise passes through two layers of hands: boosters are recruited to steal from stores, and fences clean off the markings and resell, after which the goods go up on secondhand platforms. Networked goods fetch 70-80% of retail; T-shirts and deodorant only 30-something percent.
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A third of shrink is self-inflicted
Home Depot splits shrink into two buckets: operational/administrative and malicious, which Scott describes as the things we do to ourselves versus the things others do to us. At Home Depot, about 30% of shrink falls into the former, with the rest on the malicious side. The industry line that has circulated for years: of malicious shrink, roughly 40% is caused by internal employees, 35% by people who walk into the store, and the remainder is self-inflicted operational loss. These percentages move only within a few points each year, but he thinks they are drifting upward, and that they have been underreported ever since COVID — neither police reports nor the FBI's Uniform Crime Report fully capture it.
— Scott GlennEmployees are explicitly told not to chase anyone
The bigger problem isn't money, it's people. Scott says professional criminals often use homeless people and addicts to go into stores and steal; these people have one thing on their minds — getting the goods out to trade for money — so they get physical, and they have gotten physical. People have been injured in Home Depot stores, and even killed. That's why asset protection staff are trained in de-escalation, and the 400,000 store employees are explicitly told not to intervene — just back off. His attitude: he would trade shrink for people's safety every single day, and management and the board would back that decision.
— Scott GlennRFID dies the moment it enters a steel store
Joe asks why RFID has been talked about for 25 years and yet in 2026 is still expensive and hard to scale. Scott says he doesn't understand it either, but explains what's peculiar about Home Depot: it's a hardware store, and the store is full of steel, essentially a Faraday cage, so passive RFID can't be read — you can only use solutions that actively transmit a signal. He also says tag costs are now almost zero; the real bottleneck is the reading hardware — covering a 140,000-square-foot sales floor with eight separate entrances and exits costs a fortune. They've tried the idea of bricking merchandise before it leaves the store, but retrofitting an entire production line for a single drill is very hard to scale.
— Scott GlennStolen goods have been pushed onto secondhand platforms
The division of labor works like this: boosters are recruited and given a list, cash, or the promise of drugs to go steal from stores; the goods go to a fence — which might be a garage, a warehouse or a flea market — who strips the price tags, store markings and electronic tags before reselling, and the money flows up to whoever runs the operation, which might be a small crew of a few people or a transnational gang. After the INFORM Act took effect in 2023, big platforms like Amazon and eBay were required to verify seller identities, so stolen goods shifted to Craigslist and Facebook Marketplace, because the law left a loophole that doesn't cover peer-to-peer sellers. Home Depot works backward from the platforms, using models to flag sellers pricing below cost while moving large volumes.
— Scott GlennOne combo kit sold means restocking 4.2 times
Whether to lock up shelves is a financial question. Scott says they look at the data: there's a combo kit priced at $799, and for every one sold, they have to restock 4.2 times. Take that to finance and they immediately understand it's a gross margin problem — as long as locking up breaks even or even makes a little money, it's justified. But half of Home Depot's revenue comes from professional contractors, and if they break a bit on the job site, rush to the store and find it out of stock, that's a loss too. So they lock up a carefully selected set of categories, with a QR code to summon an associate, who opens the lock in 90 seconds on average; and locking up doesn't necessarily hurt sales — in some categories sales actually rise, because the goods are finally in stock.
— Scott GlennA fake bill of lading can drive the goods right out
On the supply chain he counts three plays: first, pure diversion, where whole containers are rerouted at the port or transload warehouse and hauled elsewhere, sometimes even loaded back onto a container ship and sailed away; second, a driver drives eight hours across state lines, and while he sleeps someone pries open the trailer doors and moves boxes; third, forged bills of lading and pickup orders, made to look real with AI, where a driver pulls in, says he's picking up a certain trailer, and just drives off. He says what's new isn't necessarily the methods, it's the volume, because these cases are very hard to pursue. Rail is the area that has clearly worsened over the past five or six years — cars sitting in a yard get pried open by a group; and the other side has good intelligence, they don't touch every car, only the ones carrying guns or electronics.
— Scott GlennAI in security is an efficiency tool
Scott says they have more cases than they can investigate, so for them AI is an efficiency question: a typical organized retail crime case takes an average of 70 days from discovery to closing and handing over to police, and compressing that cycle means they can work more cases. They just replaced the video management system across all 2,300 stores, letting existing cameras run edge analytics — identifying people who linger too long in an area, deliberately avoid associates, or show up where they shouldn't be. He also admits that to identify a specific combination of suspicious behaviors and then recognize the specific person, he doesn't have enough cameras yet, but they will get there. Separately, they have an in-house company doing web scraping.
— Scott GlennSeven years ago no one cared; now there's a federal bill
He says he's very optimistic now. INFORM is arguably the first federal bill driven by organized retail crime, and next is CORCA (Combating Organized Retail Crime Act): the retail industry broadly supports it, it has bipartisan cosponsorship, it has passed the House, and it's attached to the NDAA awaiting Senate passage, with the president saying he'll sign it. The rationale is that this crime is inherently interstate — it happens in Cobb County, Georgia, and the goods flow to South Carolina and North Carolina, which is interstate transportation of stolen goods, but there were no corresponding federal resources; the bill would provide resources, prosecutors and a coordination center. Seven years ago he was thoroughly pessimistic about this: no one took it seriously, and the prevailing mood was still decriminalization and defunding the police.
— Scott GlennIn their own words · checked verbatim
When we talk about shrink in retail, we're talking about at the end of the day, I have inventory on my books. And when I physically go to count that inventory, it's not there.
Scott Glenn8:19
I'll trade the shrink for the safety of the people every day of the week.
Scott Glenn23:53
We are a hardware store with basically a Faraday cage of steel throughout our stores.
Scott Glenn23:53
How can he sell new in-box product at a price lower than my cost?
Scott Glenn30:02
we would buy it 4.2 times for every time we sell it.
Scott Glenn35:19
There's also many, many categories where actually sales go up because you're in stock.
Scott Glenn36:20
It's not necessarily the scheme that's new. It's the volume that seems to be new because it's a very difficult thing to go after.
Scott Glenn39:23
We have more cases than we can investigate.
Scott Glenn41:28
Figures
| Home Depot store count | 2,400 retail stores | 9:19 |
| Home Depot store size | 140,000 square feet | 19:43 |
| Home Depot store employees | 400,000 | 22:52 |
| Stores where the video management system was replaced | 2,300 | 41:28 |
| Restock multiple for the $799 combo kit | 4.2 restocks for every one sold | 35:19 |
| Average time to unlock a locked-up item | 90 seconds | 36:20 |
| Share of revenue from professional customers (pros and contractors) | 50% | 35:19 |
| Average organized retail crime case cycle | 70 days (from discovery to closing and handing over to police) | 41:28 |
| Resale price of stolen goods | 70%-80% of retail for networked goods; deodorant, T-shirts and Tylenol at about 30-40 cents per dollar of retail | 31:14 |
| Congressional support for CORCA | 100 to 200-plus House cosponsors; about 35 states have ORC task forces led by state attorneys general | 45:32 |
Glossary
- shrink
- Inventory that's on the books but doesn't match up at count, covering both operational errors and theft.
- ORC (organized retail crime)
- Gang theft across stores and even states, for the purpose of reselling at a profit.
- boosters
- Recruited shoplifters who are given a list, cash, or the promise of drugs to go into stores and steal.
- fence
- The middleman who consolidates stolen goods and strips the markings and price tags before reselling.
- INFORM Act
- Took effect in 2023; requires online platforms to verify the identity of high-volume sellers, with peer-to-peer sellers exempt.
- edge analytics
- Having the cameras themselves analyze footage in real time, to spot behaviors like lingering or avoiding associates.
How to listen
People in retail, consumer goods, supply chain and security compliance, plus investors watching US brick-and-mortar retail margins and the direction of legislation.
The roughly one-minute opening plug for the in-person LA recording can be skipped.