The Cost of Retail Theft
Retail theft costs businesses every year. Break-ins, shoplifting, supplier fraud, administrative errors and even employee theft cost retailers around the world more than $128 billion a year, according to the 2014 Global Retail Theft Barometer. In the United States alone, this theft cost retailers $42 billion. In Canada, according to the Retail Council of Canada, retail theft costs businesses $4 billion per year.
These numbers show what a huge problem retail theft is.
The Global Retail Theft Barometer also found that, worldwide, theft represents 1.29% of all retail sales.
Retail theft doesn’t just cost the businesses themselves. It also costs customers who end up paying the costs of retail theft that are passed down to them. Again looking at the Global Retail Theft Barometer, the annual cost of retail crime to shoppers in the US averaged $403 per household.
The survey also found that shoplifting is the biggest cause of retail shrink in most countries (16 of the 24 surveyed). However, in the United States, employee theft ranks first with 42.9% of all retail loss. Shoplifting is second at 37.4%.
Almost all types of retail stores are affected by employee theft and shoplifting in some way. According to the study, the types of stores that were the hardest hit by these crimes are discount stores, pharmacies, drugstores, supermarkets and grocery stores.
Preventing Retail Theft
All retailers should be concerned about theft. As seen in the statistics above, these crimes touch all retail stores in all industries. Reducing and preventing theft requires a multifaceted approach that targets the various types of theft that can take place.
When it comes to shoplifting, one thing that businesses can do is train staff to be aware and alert. In many cases, a staff member observing a store patron can prevent shoplifting. Another way to prevent shoplifting is to store small yet valuable items (electronics, music players, mobile phones, jewellery, etc.) in locations where they cannot easily be grabbed, hidden and removed by opportunistic criminals. Solutions to this problem include locking these items in secure cabinets or placing them behind security gates. Customers will then have to ask store employees for these items, which drastically cuts down theft.
Employee theft can be reduced in a number of ways. One excellent way to reduce employee theft is to utilize access control methods. This means blocking off certain areas that contain high value items and restricting employee access to these areas. For example, it is often quite effective to install security gates on your stockroom and to provide only those employees who require access with the key. Not only does this reduce the number of people who enter the stockroom but, if a theft does happen, you will know exactly who was able to access the room, thus narrowing down the possibilities.
Given the high costs of retail theft, it simply makes sense to take steps to reduce theft as much as possible before the costs of this theft grow too large. Some companies only invest in security methods after they’ve suffered a major loss. The issue with this is that, in many cases, the loss suffered is far more costly than it would have been to install security measures in the first place.
By taking precautions to protect your property before you experience any significant theft, you drastically reduce the likelihood of going through such a crime.
Helpful tips on layering security, download our 10 Critical Points to Securing your Shop, your Employees, and your Goods eGuide.