Report: Retail Theft Costs Global Retailers $112B

THOROFARE, N.J. — Losses from shrink — comprised of shoplifting, employee or supplier fraud, organized retail crime (ORC) and administrative errors — cost retailers worldwide $112 billion, representing 1.4% of retail sales, according to a new report.

The 2012-2013 Global Retail Theft Barometer report notes that shrink is on the rise in most countries with increases noted in shoplifting, employee theft and organized retail crime. Sponsored by an independent grant from Checkpoint Systems and conducted by Euromonitor Int’l, the study notes that the countries with the highest rates of shrink include Brazil and Mexico with 1.6%. The United States follows closely behind with 1.5%, costing shoppers $300 per household. Among the countries with the lowest shrink rates include Japan (1%) followed by Australia, Hong Kong and Germany, which each had shrink rates of 1.1%.

The study is based on phone interviews and written surveys conducted with retailers covering 160,000 stores globally and $1.5 trillion sales. The most popular stolen goods include fashion accessories, jeans, footwear, lingerie, high-value electronics, allergy treatments, milk formula, electronic games, GPS systems, and cases and earphones for mobile devices.

While survey respondents blamed lagging economic recoveries and organized retail crime for high theft rates, they also believe that they manage shrinkage well due to investments in loss prevention. For example, United Kingdom and German retailers stated that improving loss prevention methods helped to keep shrink under control. Overall, retailers interviewed estimated their future loss prevention investments would increase or stay stable.

Still, retailers must continue to expand on their loss prevention solutions to guarantee a sure return on investment to reduce theft, according to Per Levin, president and chief sales officer for Shrink Management & Merchandise Visibility Solutions, Checkpoint Systems.

“Forward-looking retailers are deploying RFID-based solutions that combine protection with visibility at the item level,” he says. “This type of strategic platform, combined with investments in people and processes, opens up new horizons to reduce out of stocks, improve merchandise availability for consumers and increase sales for the retailers.”

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