27th Annual Retail Theft Survey – Findings & Thoughts

After reviewing the results of our 27th Annual Retail Theft Survey, one of my conclusions is, something has to change, and soon! We keep reporting increases in shoplifter and dishonest employee apprehensions and recovery dollars year after year, but shrink is not coming down. I think Education may be the key. Education of the public as to the severity of the theft problem, and how if negatively effects each consumer on a daily basis. Education of school aged children, as to the consequences of theft and the seriousness of the problem. In addition, education of our community leaders and elected officials as to the negative impact theft has on the economy, on jobs, and on each citizen.

When reviewing the results of our 27th Annual Retail Theft Survey, remember these are large Department Store, Mass Merchant and Big Box retailers whose first goal is to prevent the theft, yet they still have to make all these apprehensions.

Highlights from this highly anticipated annual theft survey include:

• Participants: 25 large retail companies with 23,250 stores and over $700 billion in retail sales (2014).
• Apprehensions: 1,272,560 shoplifters and dishonest employees were apprehended in 2014, up 7.1% from 2013.
• Recovery Dollars: Over $225 million was recovered from apprehended shoplifters and dishonest employees in 2014, up 10.4% from 2013.

SHOPLIFTING

• Apprehensions: Survey participants apprehended 1,192,194 shoplifters in 2014, an increase of 7.4% from the prior year.
• Recoveries: Dollars recovered from shoplifting apprehensions totaled over $159 million in 2014, a 7.5% increase from 2013. This was the 12th increase in shoplifting recovery dollars in the past 13 years.
• For the 18th consecutive year, dollars recovered from shoplifters where no apprehension was made (over $82 million) increased. In 2014, this increase was a significant 15.2%.
• Case Value: The average shoplifting case value in 2014 was $133.80, showing minimal change from 2013’s average case value ($133.76).

Our survey participants contributed the following reasons for the increase in shoplifter apprehensions and recovery dollars:
• Increased focus and attention by the Asset Protection/Loss Prevention team
• Continued growth and complexity of Organized Retail Crime (ORC) activity
• Stagnant economy
• Opening of new stores in more metro markets
• Less sales associates on the selling floor to prevent thefts

DISHONEST EMPLOYEES
• Apprehensions: Survey participants apprehended 80,366 dishonest employees in 2014, up 1.7% from 2013.
• Recoveries: Dollars recovered from dishonest employee apprehensions totaled over $66 million in 2014, an increase of 18.1% from 2013.
• Case Value: The average dishonest employee case value in 2014 was $825.36, which was a substantial increase 16.2% from 2013’s average case value ($710.34).
• One out of every 38 employees was apprehended for theft from their employer in 2014. (Based on comparison data of over 3.0 million employees.)
• On a per case average, dishonest employees steal over 6 times the amount stolen by shoplifters ($825.36 vs $133.80).

Our survey participants contributed the following reasons for the increase in dishonest employee apprehensions and recovery dollars:
• Enhanced POS exception reporting software/programs
• Renewed focus on internal theft by Asset Protection/Loss Prevention
• Less supervision of sales associates
• Tough/stagnant economy
• Reduced pre-employment screening tools being used

How can companies reduce their vulnerability to shoplifting and dishonest employees? Listed below are a few suggestions:

Shoplifting Prevention Tips

  • Providing good customer service is still the best deterrent to shoplifting.
    Shoplifters want and need privacy; so take it away from them with good customer service. When they state they are “just looking”, have associates respond with something like “Ok, but I’ll keep my eye on you in case you need any assistance”. Honest customers are ok with this (you are there if needed), while it is the last thing a shoplifter wants to hear. Also, have associates constantly walking about the sales floor and checking on customers.
  • Ensure clear site lines on the sales floor to easily view customers moving about.
    Do not block the view of high value and highly popular items, and keep these items near employee work areas, and in clear view.
  • Limit the number of items placed on the sales floor.
    Certain high value and highly pilferable items should just have a limited number of units on the sales floor. This will reduce your vulnerability to large losses of these items and make it easier to identify missing items.
  • Invest in and use anti-shoplifting technology wisely.
    Anti-shoplifting technology such as EAS tags (electronic article surveillance), Ink/Fluid tags, merchandise alarms, CCTV cameras, product tie-downs, and bulky packaging can all be effective in reducing shoplifting when used effectively.
  • Know your merchandise, and what’s popular with thieves.
    Know your highly popular items, high value items, what’s stolen most often, and what’s easily stolen. Study why items are taken, evaluate their locations and packaging – then make changes.

Employee Theft Prevention Tips

  • Conduct a thorough pre-employment screening process on all applicants.
    The first step to controlling employee theft truly starts at the point-of-hire! A thorough pre-employment screening process including, reference checks, “honesty testing”, SSN trace/verification, criminal background checks, and drug testing is most important. Money spent up-front in the screening process will result in savings from reduced turnover and losses.
  • Use an effective point-of-sale exception based monitoring program.
    An effective POS exception based monitoring program will quickly identify possible fraudulent transactions at the point of sale (ie. excessive refunds or voids; refunds or voids before or after store hours; excessive discount usage, etc.).
  • Conduct regular audits to ensure compliance with company policies and procedures.
    Ensure consistent compliance to company policies and procedures by conducting loss prevention/shrink audits on a regular basis. By reducing the opportunity, you reduce the chance of theft/loss.
  • Invest in a loss prevention awareness and reward program for associates.
    Be sure all associates are given training and awareness on loss prevention issues. Also, implement a reward program for associates who report dishonest activities of other associates.
  • Ensure loss prevention “basics” are in place and adhered to at all times:
    – Door controls (OH doors locked and Exit doors alarmed) – no unsupervised egress
    – Trash controls (monitor/supervise the removal process, and keep dumpsters locked)
    – Package/bag checks (conduct bag check whenever an employee exits the location)
    – POS controls (2 people should witness and verify all refunds and voids)   $
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