Theft Continues to Plague U.S. Retailers – 32nd Annual Retail Theft Survey

Two-thirds of retailers participating in this survey reported an increase in shrink in 2019, which is reflected in their reported apprehensions and recovery dollars. Overall apprehensions increased 2.4% and recovery dollars from those apprehensions were up 4.9%. Shoplifting apprehensions and recover dollars increased 3.0% and 3.5% respectively, with recovery dollars from shoplifting incidents without an apprehension increasing by 11% (to $176 million) over the prior year. While employee theft apprehensions were down 2.9%, the recovery dollars from those apprehensions increased 7.8%. Overall, retail theft continues to be a serious problem for retailers negatively impacting their bottom-line, and creating more out-of-stocks and higher prices to the consumer.

Highlights from this highly anticipated annual theft survey include:

Participants: 21 large retail companies with 18,994 stores and over $510 billion in retail sales (2019).

Shrink: 66.7% of survey participants reported an increase in shrink in 2019, with 23.8% reporting a decrease in shrink, and 9.5% reported shrink stayed about the same.

Apprehensions

– Total: 348,036 shoplifters and dishonest employees were apprehended in 2019, up 2.4% from 2018.

– Shoplifters: Participants apprehended 315,095 shoplifters in 2019, up 3.0% from 2018.

– Employee Theft: 32,941 dishonest employees were apprehended in 2019, down 2.9% from 2018.

Recovery Dollars

– Total: Over $136 million was recovered from apprehended shoplifters and dishonest employees in 2019, up 4.9% from 2018.

– Shoplifting: Dollars recovered from shoplifting apprehensions totaled over $90 million in 2019, up 3.5% from 2018.

– Shoplifting (no apprehension): Dollars recovered from shoplifters where no apprehension was made (over $176 million) increased 11.0% in 2019. Dollars have increased in 21 of the past 22 years!

– Employee Theft: Dollars recovered from dishonest employee apprehensions totaled over $45 million in 2019, up 7.8% from 2018.

Average Case Value

– Total: The average total theft case value in 2019 was $392.06, up 2.4% from 2018.

– Shoplifting: The average shoplifting case value in 2019 was $288.71, up 0.5% from 2018.

– Employee Theft: The average dishonest employee case value in 2019 was $1,380.62, up 11.0% from 2018.

Shoplifting

Survey participants noted the following reasons as to why their Shoplifting apprehensions and recovery dollars increased or decreased in 2019:

Increased:

. Increased ORC (Organized Retail Crime) activity

. Legislation increasing felony thresholds embolden thieves

. More ‘hit n run’/fleeing shoplifters

. Increased focus on the issue of shoplifting

. Less staffing created more opportunities for shoplifters

Decreased:

. More focus placed on recovery, than apprehension

. Increase in LP awareness and customer service

. Less LP/AP staff due to restructuring or transition

. More preventative measures in place (ie. Public View Monitors, Greeters, etc.)

. Less attention to shoplifting and more toward systemic shrink issues

Here are a few actions retailers should take to reduce their vulnerability to shoplifting losses:

. Use a Greeter: Position an associate/greeter at the store entrance(s) to greet all customers and offer assistance.

. Focus on good customer service and not ‘tasks’: Shoplifters want and need privacy; so take it away from them. When they respond, “I’m just looking”, teach associates to say, “Ok great, I’ll keep my eye on you in case you need any assistance”.  Honest customers are ok with this, and this is the last thing a shoplifter wants to hear.

. Have associates walk the sales floor: Keep visible, and keep displays neat and organized (so missing items can be more easily noticed).

. Have good sight lines on the sales floor: Do not block the view of high value and highly popular items, and keep these items in sight of associate work areas.

. Limit item quantity on sales floor: Limit the number of certain items (high value, highly pilferable) placed on the sales floor. This will reduce vulnerability to large losses of these items and make it easier to identify missing items.

. Know your merchandise: Especially highly popular items, high value items, what’s stolen most often and what’s easily stolen.  Study why these items are taken, evaluate their locations and packaging – then make changes as needed.

. Hire honest and motivated associates: Train them to prevent shoplifting (what to look for, how to respond to a possible shoplifter, etc.).

. Store Location: For stores facing parking lots. Keep an eye on area outside of store for possible get-a-way car(s) setting at the curb.

. Controls Fitting Rooms: Lock fitting room doors, and monitor usage (customers and pieces).

. Use technology: Remember, technology (EAS: electronic article surveillance, CCTV, merchandise alarms, ink/dye tags, product tie-downs, Keeper boxes, etc.) must be managed. Also ensure policies/ procedures regarding technology are adhered to: EAS tagging 98% or higher, items required to be alarmed or tied-down are done so, etc.

. High Shoplifting Stores: Consider use of off-duty police, or guards in necessary.

. Communications: Talk with other stores in your center/mall to stay current on local theft issues.

. Prosecute shoplifters: Thieves know which retailers prosecute and those that do not.  Prosecution can be a good deterrent.

Employee Theft

Survey participants noted the following reasons as to why their Employee Theft apprehensions and recovery dollars increased or decreased in 2019:

Increased:

. More focus/attention toward associate theft

. Improved technology/analytic tools resulted in more DE cases

. Low unemployment rate in 2019, resulted in less quality hires

. Increase in merchandise credit card and loyalty card frauds

. Less associates in store created more opportunities for dishonest employees

Decreased:

. Added technology to higher risk stores to reduce exposures

. Better education and awareness programs for associates

. Decrease in LP Staff due to restructuring or transition

. Less focus on apprehensions and more focus on shrink creating processes

. Less associates resulted in less employee cases

Here are a few actions retailers should take to reduce their vulnerability to employee theft losses:

. Effective Pre-Employment Screening Process: The first step to controlling employee theft starts at the point-of-hire; do not hire the “bad apple”. A thorough pre-employment screening process including, reference checks, honesty/integrity testing, SSN trace/verification, criminal background checks, and drug testing is most important.  Money spent up-front in the screening process to identify ‘quality’ associates will result in savings from reduced turnover and losses.

. POS Exception Monitoring: Use a POS exception-based monitoring program to quickly identify possible fraudulent transactions at the point of sale (ie. excessive refunds (cash or credit); refunds or voids before or after store hours; too many voids, excessive reward credits, dummy SKU usage, etc.).

. Confidential Reporting Line & Reward Program: Establish and promote a confidential line and reward program for associates to report acts of dishonesty, theft and abuse.

. Training & Awareness: Invest in a loss prevention training and awareness programs for both new-hires and current associates.

. Door Controls: Keep overhead doors closed/locked, and designated emergency exit doors alarmed to prohibit unauthorized use.

. Trash Controls:  Supervised the trash removal process, use clear bags, flattened all cartons, and keep dumpsters locked where possible.

. Package/Bag Checks: Conduct a package/bag check whenever an associate exits the location.

. POS Controls: Two associates (one a manager/supervisor when possible) should witness and verify refunds, voids, price overrides, etc.)

. Sales Verifications: “Pass-outs” are an easy way to steal with friends/relatives, so have management conduct daily unannounced sales verifications to ensure all product sold was properly rung thru the POS register.

. Opening and Closing Coverage: Where possible, at least two associates (one a key-holder) should always be present at the opening and closing of the store. This is both a security and safety issue.

. Auditing for Compliance: Ensure consistent compliance to company policies and procedures by conducting unannounced loss prevention/shrink audits on a regular basis. Auditing not only helps keep awareness high, but by reducing the opportunity, you reduce the chance of theft/loss.

The full survey can be viewed and/or downloaded/printed from on our website at:

http://hayesinternational.com/news/annual-retail-theft-survey/   $

 

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