Report: Losses from retail theft declined in 2011

According to the preliminary results of the National Retail Security Survey, retailers lost more than $34 billion to theft in 2011. Despite the high dollar figure of these losses, this actually represented a decrease of $2.6 billion compared to the $37.1 billion in losses reported in last year’s survey.  

The survey, which is conducted by the University of Florida with a funding grant from ADT Commercial Security, also found that theft as a percentage of revenue was 1.41 percent in 2011, down from 1.49 percent in last year’s report.

University of Florida criminologist Richard Hollinger, Ph.D., who conducted the survey, attributes the decrease to the implementation of better loss prevention strategies and technologies by retailers.

"This year’s decrease in retail theft is evidence retailers are implementing and updating loss prevention strategies in order to reduce shrinkage," said Hollinger in a statement. "Furthermore, the decrease can be attributed to the enhancements and improvements in both loss prevention technologies and programs."

According to the survey, employee theft still constitutes the largest majority of losses at 43.9 percent  or approximately $15.1 billion, followed by shoplifting, which makes up 35.7 percent  of shrink or $12.3 billion. Administrative error and vendor fraud account for the balance of lost profits.

"The decrease in retail theft can be a direct result of the widespread investment in technologies and integrated solutions by retailers," said Michael Creedon, vice president, national accounts for retail at ADT Commercial Security. "Clearly security solutions are proving to be a solid investment and have saved retailers billions of dollars in losses every year. There are a number of technologies and services available today that can help retailers continue to prevent theft, decrease shrinkage and track merchandise effectively."

While losses from retail theft may have declined in the past year, theft, particularly that which is perpetrated by organized retail crime (ORC) gangs still poses a significant threat to retailers.

According to the 24th Annual Retail Theft Survey, which was recently conducted by loss prevention and shrinkage control consulting firm Hayes International, both apprehensions and recovery dollars from shoplifters and dishonest employees rose in 2011. In fact, according to the survey, which consisted of responses from 24 major retail companies with sales exceeding $589 billion, more than one million shoplifters and dishonest employees were apprehended in 2011, resulting in the recovery of more than $161 million.

Both apprehensions and recovery dollars have increased in eight of the past 10 years, according to the survey. Increased ORC activity was one of the primary reasons cited by retailers for the rise in shoplifting activity.

The National Retail Federation also recently published the results of its eighth annual Organized Retail Crime Survey, which found that 96 percent of 125 retail companies surveyed had been the victim of ORC in the past year, up from 94.5 percent the previous year. More than 87 percent of respondents said that they believe ORC has risen in the U.S. over the past three years.