The
latest National Retail Security Survey reports that losses from
employee theft have reached record levels and that total inventory
shrinkage cost U.S. retailers $31.3 billion last year.
According to University of Florida criminologist Richard C. Hollinger,
Ph.D., who directs the National Retail Security Survey, the results
indicate that in 2001, retailers lost 1.70 percent of their total
annual sales to shrink. Hollinger said that the results of the survey
should serve as a wake-up call to the retail industry that shrinkage
continues to be a multi-billion dollar source of revenue loss.
The
study, conducted by the University of Florida with a funding grant
from ADT Security Services, Inc., a unit of Tyco Fire and Security
Services, discovered that retail security managers attributed more
than 48 percent of their losses to the thefts of disgruntled workers.
In comparison, 32 percent of retail losses were the result of
shoplifters. Employee theft was up 2 percentage points from the
previous study.
Internal theft now costs U.S. retailers $15 billion annually, compared
to shoplifting costs of $10 billion. Employee theft and shoplifting
combined account for the largest source of property crime committed
annually in the United States.
The remainder of the
annual retail losses are due to paperwork errors at 15 percent and
theft by vendors at 5 percent, according to the data obtained by
analyzing theft incidents from 118 retail companies representing 22
different retail markets.
"Given
that the surveyed portion of the retail economy annually transacts
over $1.845 trillion dollars, this percentage of loss is worth over
$31 billion," Hollinger said. "This means that the single largest
category of larceny in the United States is the crime that occurs in
retail stores. This figure is larger than motor vehicle theft, bank
robbery or household burglary combined."
"With
the uncertainty in consumer confidence and warnings of a slow shopping
season, retailers need to look beyond the selling floor to increase
and protect their profits," said Mike Snyder, president of ADT
Security Services. "Technologies such as anti-shoplifting systems,
digital video surveillance and point of sale monitoring solutions,
tied together with remote and central station monitoring, will help
retailers contain some of these losses without sacrificing good
customer service."
What can retailers do to deter shoplifters and employee theft?
Improve job satisfaction levels of retail sales associates
"In
today's environment of heightened awareness about increased security
measures it's becoming increasingly important for retailers to address
the security lapses that allow these kinds of losses. In the end, it
is the consumers who will have to pay the price for shrinkage in the
form of higher retail prices," Hollinger concluded.
