Security Enterprise Services / Retail/Restaurants/Convenience

More Employees Stealing from Canada's Retailers

November 7, 2012

Canadian retailers are losing about $4 billion a year to “shrinkage”, which equates to an average loss of $10.8 million per shopping day, according to PwC's 2012 Canadian Retail Security Survey.

However, theft by employees has risen to 33 percent compared to 19 percent in 2008, found the survey of 34 retailers, representing about one-quarter of 2011 retail new sales.

Estimated theft by external parties including shoplifters and organized criminals has decreased to 43 percent since the 2008 estimate of 65 percent.

Many retailers have decided to increase investments in managing internal theft, the survey found, and 88 percent of respondents charge the employee criminally and nearly all (94 per ent) dismiss the employee with cause.

While three out of five retailers perform pre-employment screenings before hiring new staff, only 29 percent request new employees to pass a police background check, the survey revealed. This is one-half as many that said they did so in 2008, found the survey.

Although estimated shrink as a percentage of sales has remained contained since the last survey in 2008, there’s been an increase in the use of closed circuit TV/DVR recording systems, observation mirrors and 1-800 tip lines to control losses both in-store and in warehouse environments, the survey notes. And more than 65 percent of respondents indicated they always use these tools, up from 39 percent in 2008.

Yet only 35 percent of retailers said they frequently use alarms on merchandise, a reduction from the 72 percent result four years ago.

The top three items most likely to be stolen from retailers are alcohol, ladies apparel and cosmetics and fragrances, the survey said.

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