Crime and Fraud Cost Retailers $37.1B Last Year
DALLAS -- Retail crime and fraud continue to cost retailers more money every year, according to a new survey released at this week's National Retail Federation (NRF) Loss Prevention Conference and EXPO, held here. The survey, jointly conducted by the NRF and the University of Florida, revealed total retail losses cost retailers $37.1 billion last year, up from $33.5 billion in 2009.
The retail shrinkage rate increased to 1.58 percent in 2010, an increase from the 1.44 percent figure posted in 2009. A separate NRF study, the Organized Retail Crime Survey, found that 95 percent of retailers have been a victim of organized crime during the past 12 months.
Retail shrinkage comprises shoplifting, employee theft, administrative error and vendor fraud. Employee theft accounted for the majority of retail shrinkage last year. More than $16 billion, or nearly 44 percent of losses, were attributed to employee theft. Collusion between internal and external "bad actors" were blamed for almost 19 percent of losses. More than $12 billion, or 32.6 percent, was attributed to shoplifting. Administrative error, (4.8 percent or 12.9 percent of shrinkage), and vendor fraud ($2 billion in losses or 5.4 percent of shrinkage) were other causes cited.
"Increased shoplifting and shrink rates mirror what retailers are seeing with professional and organized crime rings," said NRF senior asset protection advisor Joe LaRocca. "Retailers are continuing to put resources in place to fight these self-serving and unethical criminals who walk out with billions of dollars in unpaid merchandise every year."