Retail Federation Survey: Shoplifting, Employee Theft on the Rise

A new report from the National Retail Federation finds that stores suffered $44 billion in losses from shoplifting, fraud, and other forms of "industry shrink." The association emphasizes that the issue is far larger than most consumers realize.

Shoplifting isn’t a victimless crime; in fact, it could have a much larger effect than most people imagine.

That’s according to new research from the latest edition of the National Retail Security Survey by the National Retail Federation (NRF). The study, which analyzed “shrinkage” in the retail space, found that retail outlets lost $44 billion in 2014—from shoplifting, employee theft, vendor theft, or administrative errors. Shoplifting and employee theft accounted for nearly three-quarters of that loss, meaning that people are stealing roughly $32 billion worth of goods from retail outlets each year.

These totals add up to big money for major companies. Wal-Mart, for example, lost 1 percent of its total revenue to shrinkage in 2014, which doesn’t sound like much until you consider that Wal-Mart made $300 billion last year.

“One percent of $300 billion is quite a lot of money. If you can save 10 basis points of it—boy, I’ll take it every day of the week and put it into lower prices for customers,” the company’s Greg Foran told Reuters last month.

It’s a take that the NRF itself emphasizes.

“A common misperception about shoplifting is that retailers can ‘afford’ the loss of a candy bar or a pair of jeans, but the truth is that the industry loses billions of dollars each year at the hands of callous criminals that could be put towards human capital, promotions, and other necessary business operations,” Bob Moraca, NRF vice president of loss prevention, said in a news release.

How has theft become such a big problem? It’s a question that the study’s author, Dr. Richard Hollinger of the University of Florida, has grappled with in his research. Speaking to the Los Angeles Times, Hollinger said that shoplifting is often more organized than it seems.

“Remember, the shoplifting includes organized crimes of theft. They’re largely taking stuff they know they can turn around and sell or fence,” he said. “Or they’ll bring the items back to the store in exchange for gift cards and they’ll sell the cards on internet auction sites, so they victimize the store twice.”

Hollinger said that retail thieves often want things that are small but valuable, such as consumer electronics, cigarettes, makeup, baby formula, and over-the-counter medicine. He added that many retail outlets are increasing their security measures against their own employees to help ease the hemorrhaging.

Likewise, the study noted that many stores have beefed up their theft prevention efforts over the last year.


Ernie Smith

By Ernie Smith

Ernie Smith is a former senior editor for Associations Now. MORE

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