WASHINGTON — The National Retail Federation on Tuesday released a survey of 75 retailers who collectively reported that merchandise losses, or shrinkage, in 2009 declined to 1.44 percent of $2.33 trillion in retail sales last year, down from 1.51 percent in 2008.
This story first appeared in the June 16, 2010 issue of WWD. Subscribe Today.
The NRF released the survey at its Loss Prevention Conference in Atlanta. The study was compiled by Richard Hollinger, professor of criminology and law at the University of Florida. According to the survey, retailers lost $33.5 billion to shrinkage last year, down from $36.5 billion in 2008.
The majority of the shrinkage was due to employee theft, which accounted for 43 percent, or $14.4 billion, of total losses. Retailers lost $11.7 billion, 35 percent of the total, to shoplifting; $4.9 billion, or 14.5 percent, to administrative error, and $1.3 billion, or 3.8 percent, to vendor fraud.
“Retailers lose billions to shoplifting, internal theft and other types of criminal activity every year, so it’s encouraging to see these small successes when it comes to shrink rates,” said Joe LaRocca, senior asset protection adviser for the NRF.
LaRocca said in an interview that employee theft has historically outweighed shoplifting on a percentage basis, but loss-prevention experts are starting to see a growing trend that involves store employees and their friends and relatives. In the NRF’s 2008 survey, retailers said 14 percent of their internal cases involved employees stealing from companies with some assistance from other customers, friends or relatives.
Retailers have employed safeguards to stop theft and fraud. In 2009, 20.5 percent of the retail respondents said they planned to increase their use of criminal conviction checks this year, 16.7 percent said they would increase multiple interviews of employees, 11.5 percent said they would increase past employment verifications, 11.5 percent said they would increase “honesty tests” and 10.3 percent said they would increase credit checks.
Nearly 30 percent of the respondents said they planned to increase the use of point of sale cameras and remote camera monitoring, while 25.6 percent said they would increase their use of digital recording and 24.4 percent said they would increase the use of live, visible cameras.