Survey Reveals Retail Shrinkage Tops $40B in U.S.
BOCA RATON, Fla.
U.S. retailers lost $40.5 billion to theft in 2006, according to a survey conducted by the University of Florida.
The survey, which is funded annually by ADT Security Services, calculates retail shrinkage by combining employee theft, shoplifting, vendor fraud and administrative error.
The survey included responses from 150 corporate retail chains and concludes that employee theft accounted for $19 billion in losses or 47 percent of the total retail shrinkage in 2006. Shoplifting accounted for about $13 billion.
The dollar amount per incident of employee theft is declining, but the dollar amount for shoplifting is rising, which, according to the survey, is commonly attributed to an increase in organized retail crime (ORC).
The report also shows the amount of loss due to shoplifting is approaching the total losses from all personal property crimes, according to the most recent figures by the Bureau of Justice Statistics.
“The dollar loss to retailers from theft is staggering,” says Jeffrey Bean, vice president ADT retail sales and operations. “Retailers are looking for more sophisticated and integrated security technology solutions to help limit loses, lower costs and keep prices down.”
To combat shrinkage, the report states retailers are following trends such as switching to digital recording, using remote and live video recording, and implementing point-of-sales (POS) monitoring. Integrating cameras with loss prevention hardware and POS software is another growing trend.
“There are a number of new technology tools available to help retailers operate more efficiently, including intelligent cameras and software that can also help detect criminal activity,” says Bean. “The more retailers can limit crime and improve their operations, the greater the benefit to shoppers in the form of lower prices and a safer shopping environment with greater access to more items conveniently displayed in the open.”
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