News

One-Two Punch Of Shoplifting & Fraud Costs Retailers $44B

Retailers got hurt from two directions last year: When they weren’t getting straight-up robbed, they were being defrauded from within. And it all contributed to industry losses totaling $44 billion for the year.

This information comes from the National Retail Federation (NRF)/University of Florida National Retail Security Survey, which found that shoplifting accounted for the majority of losses (38 percent) among retailers surveyed.

Employee/internal theft contributed to 34.5 percent of shrink, followed by administrative and paperwork errors at 16.5 percent, then vendor fraud or error at 6.8 percent. Bringing up the rear in the categories contributing to retail shrink in 2104 was unknown loss at 6.1 percent.

"A common misperception about shoplifting is that retailers can ‘afford’ the loss of a candy bar or a pair of jeans, but the truth is that the industry loses billions of dollars each year at the hands of callous criminals that could be put towards human capital, promotions and other necessary business operations,” said NRF Vice President of Loss Prevention Bob Moraca. “Though we are encouraged by the partnerships forged with law enforcement over the years and advances in technology that will help deter a crime before it happens, criminals continue to thwart much of the progress retailers have made thus far."

Looking ahead from the study, NRF President and CEO Matthew Shay stated that “retailers will continue to review best practices and work to better educate decision-makers in Washington about the burdens these crimes place on consumers, retail companies, their employees and the economy."

As for the hard facts about the retail industry’s self-protection plans moving forward, the study bore out that 39.4 percent of retailers surveyed have increased their loss prevention budgets over the last year, while 36.6 percent reported that their budgets would remain the same. Simple math means that, according to the survey, 23.9 percent of retail respondents will see their shrink-prevention resources diminished.

 

——————————–

Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The July 2019 Pay Advances: The Gig Economy’s New Normal, a PYMNTS and Mastercard collaboration, examines pay advances – full or partial payments received before an ad hoc job is completed – including how gig workers currently use them and their potential for future adoption.

Click to comment

TRENDING RIGHT NOW

To Top