Retail Theft Plagues Industry

The latest Annual Retail Theft Survey has revealed an increase in shoplifter and dishonest employee apprehensions in 2015.

The 28^th Annual Retail Theft Survey, conducted by Jack L. Hayes International, has revealed that, in 2015, the number of shoplifter and dishonest employee apprehensions has risen from previous years. The survey showed that over 1.2 million shoplifters and dishonest employees were apprehended in 2015 by 25 large retailers. These retailers recovered over $200 million from the apprehended thieves.

“Retail theft, by both shoplifters and employees, continues to plague the retail industry. Our latest Annual Retail Theft Survey reflects an increase in both shoplifter and dishonest employee apprehensions, 2.0% and 1.0% respectively, in 2015. Overall recoveries from those apprehensions totaled over $200 million and was up 1.2%”, said Mark R. Doyle, president of Jack L. Hayes International. “It should be noted that the apprehension of shoplifters and dishonest employees has increased in nine of the last 10 years! Retail theft causes consumers to pay higher prices for goods, and is having a detrimental effect on retailers’ bottom-line profits.”

Highlights from this highly anticipated annual theft survey include:

• Participants: 25 large retail companies with 21,288 stores and over $700 billion in retail sales (2015).
• Apprehensions: 1,246,003 shoplifters and dishonest employees were apprehended in 2015, up 2% from 2014.
• Recovery Dollars: Over $200 million was recovered from apprehended shoplifters and dishonest employees in 2015, up 1.2% from 2014.
• Shoplifter Apprehensions: 1,170,056 shoplifters were apprehended in 2015, up 2% from 2014.
• Shoplifter Recovery Dollars: Over $150 million was recovered from apprehended shoplifters in 2015, an increase of 3.2% from 2014. An additional $142 million was recovered from shoplifters where no apprehension was made, up an amazing 18.8% from 2014.
• Employee Apprehensions: 75,947 dishonest employees were apprehended in 2015, up 1.0% from 2014.
• Employee Recovery Dollars: Over $55 million was recovered from employee apprehensions in 2015, down 4% from 2014.
• One in every 38 employees was apprehended for theft from their employer in 2015. (Based on almost three million employees.)
• Shrink: 60% of survey participants reported an increase in shrink in 2015, with just 24% reporting a decrease in shrink, and 16% reported shrink stayed about the same.

Jack L. Hayes International Inc. has been in the Loss Prevention/Shrinkage Control consulting business for over 35 years, and is recognized on an international level as the foremost loss prevention and inventory shrinkage control consulting firm in the world.

EMPLOYEE THEFT
Employee theft is perceived by many to be the most severe problem facing industry today. Many people often think of theft and abuse in companies as being isolated acts, which in themselves cost an organization little. Unfortunately, this is untrue. It is also not true that most employees are caught stealing inexpensive items such as ‘pens, pencils and paper-clips’ from their employers. Over the years, Hayes International has witnessed a steady and significant rise in this serious problem. Each year, thousands of employees are caught stealing from their employers and co-workers. Furthermore, studies reflect that this group of thieves is being caught stealing far more than a few insignificant supplies.

JOB APPLICANT ADMISSIONS
To further evaluate the severity of employee theft, Hayes International analyzed over 19,000 randomly selected Applicant Review questionnaires (pre-employment ‘honesty tests’) given by CertiFinder to retail job applicants nationwide.

Of these 19,165 job applicants, 12,283 (64.1%) were rated as “low risk” and 3,700 (19.3%) were rated as “high risk,” due to their admissions of previous wrongdoings, and their attitudes regarding honest and dishonest behavior. (Note: The remaining 3,182 applicants (16.6%) were rated as “moderate risk”.) When comparing the admissions of “high risk” and “low risk” job applicants, it becomes most obvious why some applicants are considered a hiring risk and others are not. For example, listed below are various items on the Applicant Review questionnaire and the percent of high and low risk applicants admitting to each.

• I have frequently associated with fellow employees who admitted they were stealing merchandise from the company. (High Risk: 18.4%; Low Risk: 5.4%)
• I am not an honest person and might steal or cheat. (High Risk: 9.3%; Low Risk: 1.7% )
• I could be tempted to steal from my employer. (High Risk: 26.7%; Low Risk: 7.8%)
• I might help friends steal from my company. (High Risk: 14.6%; Low Risk 1.3%)
• I have stolen money within the past 3 years. (High Risk: 17.5%; Low Risk: 5.2%)
• I have stolen merchandise within the past 3 years. (High Risk: 15.9%; Low Risk: 4.5%)
• I would possibly use marijuana/illegal drugs in the future. (High Risk: 23.1%; Low Risk: 6.5%)
• I have previously sold marijuana or other illegal drugs. (High Risk: 4.3%; Low Risk: 0.9%)

Previous theft admissions for the group of 3,700 “high risk” job applicants totaled $256,050, or $69.20 per applicant, while the admissions for the group of 12,283 “low risk” job applicants totaled $71,930, or $5.86 per applicant. It is generally estimated the correct dollar amount for stolen money and merchandise is approximately 10 times the admitted amount. Therefore, based upon admissions made on The Applicant Review questionnaire, the average “high risk” job applicant was responsible for the theft of $692.03, compared to $58.56 for the average “low risk” job applicant.

SHOPLIFTING

• Total retail losses are approximately $44.2 billion annually (based on University of Florida survey).
• Shoplifting is conservatively estimated to account for 30% – 40% of total retail shrink/losses (based on both University of Florida and Hayes International surveys).
• Average shoplifting case for all types of retail is approximately $50 (based upon data taken from various surveys).