Studies indicate more than $13 million in merchandise is stolen from U.S. retailers annually.
By Erin Rigik, Senior Editor
Shoplifting and employee theft continue to plague retailers. Two recent studies—one conducted by Price Gun and another by Global Retail Theft Barometer—show just how theft is impacting the retail business.
No. 1 Property Crime
Price Gun, a price gun and label master distributor, recently completed a research study that found shoplifting is the No. 1 property crime in the U.S. More than $13 billion in items are stolen from retailers each year—that’s more than $35 million in stolen merchandise a day. Common retail items stolen range from groceries to pricey electronics. On average, some 550,000 shoplifting incidents occur daily.
In the U.S., approximately 27 million people are shoplifters, which is the equivalent of 10% of the U.S. population. Yet the source of a store’s shrinkage problem usually hits closer to home—its own employees. The U.S. Chamber of Commerce reported that $50 billion is lost annually to employee theft and fraud. What’s more, 75% of employees steal at least once, according to Price Gun’s research.
Stores based in major cities are likely to have more shoplifters to contend with. Atlanta, Baltimore, Washington, D.C., Chicago and Dallas rank among the top U.S. cities for shoplifting. These locations share some commonalities: they’re large cities that offer anonymity; have national roadways that provide easy access to stores and likewise, an easy escape route; and the busy streets offer a way to exit a store unnoticed.
Groceries, including cigarettes, energy drinks, infant formula, lottery tickets and gum are among the most common items stolen by shoplifters.
Not surprisingly, hiding the merchandise on their person is the most common way people steal. According to the study, one common tactic that professional shoplifters use is to hang an umbrella on their elbow so items can easily slide inside.
A second study, this one from Global Retail Theft Barometer, found that shrink, comprised of shoplifting, employee or supplier fraud and administrative errors, cost the global retail industry more than $128 billion last year. What’s more, the annual cost of shrink to U.S. shoppers, as passed on from retailers, averaged $403 per household. The total cost of retail crime (employee theft, shoplifting, loss prevention spend) to retailers as a percentage of revenues was up 27% in 2013, compared to 2012.
The research was funded by an independent grant from Checkpoint Systems Inc., using phone and written interviews with 222 retailers from 24 countries.
The good news is that the study found shrink is actually decreasing slightly in most countries thanks to an increased focus on loss prevention methods and a slightly improved economic outlook, particularly in North America. The U.S.’s shrink rate in 2013 was 1.48% of retail sales, which dropped slightly from the 1.50% rate recorded in 2012.