It doesn't increase the cost of goods sold but over time it may increase the selling price. That's two different things. Competition in the marketplace may make it difficult for a merchant to raise the price to offset his shrinkage loss. The store's NET profit will be reduced. Theft is negative and incrementally destructive to the economy. Think of the extreme where most of what you sell is stolen . You would have to close down at some point and could not place an order to the people that make the merchandise and they too would have to lay off people.