According to a study conducted by the University of Florida, retailers lost $31 billion in 2004 due to employee theft, shoplifting, vendor fraud and administrative error. This represents a loss of 1.54 percent of retail’s total annual sales. When comparing the 2004 figures to the previous year, the study revealed that shoplifting rose while employee theft slightly decreased.
Due to retail’s growth, University of Florida criminologist Richard Hollinger, Ph.D. says that dollars lost to inventory shrinkage increased, which costs everyone more money as vendors work to make up their losses.
The University of Florida study found that shoplifting accounted for 34 percent of retail’s inventory losses, or almost $10.5 billion in sales, up from 30.8 percent in 2000. Hollinger maintains that the relatively high numbers are due to a new type of shoplifting he calls organized retail crime, which involves retail theft gangs who work as a team to steal as many retail goods in as short of period as possible.
ADT Vice President of Retail National Accounts Rex Gillette says the survey clearly shows retailers are spending more to combat retail crimes. He adds that dishonest employees and shoplifters have shown themselves quite capable of targeting retailers that fail to protect themselves using the right electronic security systems. According to Gillette, for this reason digital video recording systems, public view monitors and anti-shoplifting systems continue to receive widespread use in the retail marketplace.
