Retailers Lose More Than $33 Billion to Retail Theft, According to Preliminary Report

Retailers lost more than $33 billion to theft last year according to a recent annual survey conducted by the University of Florida with a funding grant from ADT Security Services. The National Retail Security Survey (NRSS) preliminary results show a slight decrease in the rate of theft as a percent of sales from 1.51 percent or $36.5 billion in 2008 to 1.44 percent or $33.5 billion in 2009.

It looks like a very tough economy made loss prevention efforts for retailers even more important in 2009, according to Joe La Rocca, senior asset protection advisor for the National Retail Federation.

“The decrease in the rate of theft is evidence of continued efforts by retailers to protect inventories and hold on to merchandise,” he said.  “This last year we have seen retailers working closer with law enforcement and really maximizing their investment in loss prevention.”

Retail theft includes shoplifting, employee theft, administrative error and vendor fraud.

As in years past, employee theft made up the largest portion with $14.4 billion in losses or 43 percent of the total.  The second biggest category was shoplifting with a loss of $11.7 billion or 35 percent of the total.

•         Despite tough economic conditions, rate of retail theft down slightly due to continued anti-theft efforts and investment by retailers in loss prevention

•         Loss due to employee theft $14.4 billion (43 percent of total) and loss due to shoplifting $11.7 billion (35 percent of total) – percentages same for previous year

•         Retailers continued investment in anti-theft prevention and technology helps to combat retail crime

Some retailers like K&G Fashion Superstores, a subsidiary of The Men’s Wearhouse Inc., with 107 stores in North America, substantially stepped up loss prevention efforts in 2009 with increased anti-theft technology.

“In an economic downturn we wanted to better serve our customers with higher quality brands at discounted prices,” said Frank Serra, director of loss prevention for K&G. “Actively protecting those items allows us to keep costs down and pass that along to our shoppers.”

Retailers have stepped up their game in the fight against retail crime and are more aggressively using new technology tools to outsmart the criminals, according to Jeff Bean, vice president, National Accounts and Retail for ADT.

“They are using sophisticated video and software to detect unusual shopping patterns,” he said.  “Retailers are working more often with law enforcement to match up video with repeat shoplifters and study patterns and trends that can break up theft rings and lead to arrests.”  

The array of loss prevention technology tools continues to be more sophisticated and efficient.  New anti-theft tags allow retailers to protect more products including those with unusual shapes, delicate fabrics or difficult-to-tag packaging.  Retailers are also turning to smaller and smarter cameras that operate on a network and have analytic software that can detect unusual behaviors like an entire shelf of jeans disappearing.  These same software-based video systems can operate together to follow a suspected shoplifter throughout the entire store.

More retailers are using technologies that work on a network to pull together multiple technologies, including register transactions with video, people counting with sales data and alarms with remote monitoring. All of these systems work together to provide the retailer with information and data that can help limit losses, keep prices down for consumers and operate the store more efficiently.

According to La Rocca, the NRSS preliminary data supports the NRF’s recent Organized Retail Crime Survey.

“Organized retail crime, where large amounts of merchandise is stolen in bulk quantities and then sold to consumers and suppliers, is still a significant problem for retailers, but we found that there appears to be a slight decrease over the last year,” he said.  “The investment retailers have made in loss prevention and awareness has helped, but staying one step ahead of retail criminals is an ongoing job.”