A report by Retail Fraud- New York, shows U.S. retail shrink is up $3 billion, with retailers losing $60 billion per year to fraud.
The US Retail Fraud Survey 2015 has estimated that U.S. retailers are losing $60 Billion a year to shrink—up from $57 Billion last year—and identified employee theft as the single biggest cause of loss to retailers. The report launched this month at Retail Fraud – New York, part of the world’s largest risk and loss prevention conference series.
Published by Retail Knowledge and sponsored by intelligent cash handling experts Volumatic for the third consecutive year, the Survey is the most extensive report into the systems, processes and strategies of U.S.’s top retailers available.
“American retailers generally put losses owing to staff ahead of losses owing to external shrink. This is the opposite of the situation in the UK,” commented Paul Bessant of Retail Knowledge. “As economic conditions continue to be tough for retailers and consumers alike, it is perhaps not surprising that employee theft is such a big problem. Perhaps the poor economic situation has led to good people making bad decisions…”
“I am confident that the outputs of this Survey will help the loss prevention community benchmark themselves against their contemporaries and identify opportunities to engage with their businesses, as well as each other, to win back some of the multi-billion dollar hole in profits that is being created through shrinkage,” said James Harris of Volumatic, the US Retail Fraud Survey sponsor.
Whilst the Survey reported average shrink as a percentage of sales at 1.27%, very similar to last year, in cash terms this equates to an increase of $3 billion this year.
Further highlights of the Survey include the increase in return fraud; up from an average of 0.25% of sales last year to 0.31%, as well as the increased fraudulent use of credit cards (66%) up from 59% last year.
This study represents 91 retailers with annual sales totaling $844.6 billion; 18% of the total North American retail sector by sales value and encompassing 102,550 stores.
