Shoplifting on the Rise According to U. of Fla. Research

BOCA RATON, Fla. – The holiday shopping season is here, and with it comes retailer concerns over shoplifting and employee theft. According to a new University of Florida retail study, those concerns are well founded -- with evidence of losses from shoplifting on the rise.

The report also found that while employee theft is down slightly, it is still the largest single source of inventory “shrinkage.”

Inventory shrinkage -- a combination of employee theft, shoplifting, vendor fraud and administrative error -- cost the nation’s retailers close to $31 billion last year, according to the National Retail Security Survey, which analyzed theft incidents from 107 of the largest U.S. retail chains. The annual survey was conducted by the University of Florida, with a funding grant from ADT Security Services.

University of Florida criminologist Richard Hollinger, Ph.D., who has directed the National Retail Security Survey for the past 15 years, said results show that in 2004, retailers lost 1.54 percent of their total annual sales to inventory shrinkage.

“Since we first began conducting this study, the percentage of inventory loss has declined in a fairly significant way. That’s the good news,” Hollinger said. “The bad news is that because the retail industry has grown, dollars lost to inventory shrinkage have actually increased, costing the industry more than $30 billion. This translates into higher consumer prices for all of us.”

One of the key findings from this year’s study is the increase in shoplifting, which accounted for 34 percent of retail losses, up from 30.8 percent in 2000. U.S. retailers lost nearly $10.5 billion in sales to shoplifting.

Hollinger attributed the increase to a new form of shoplifting called organized retail crime, which involves shoplifting gangs working as a team to steal large quantities of merchandise quickly.

Rex Gillette, vice president of retail national accounts for ADT, said the survey shows retailers are spending more to combat retail theft.

“The retail industry today is very competitive and retailers cannot afford to give up profits to thieves,” Gillette said. “Dishonest employees and shoplifters tend to go the path of least resistance and will target a retail location that has not invested in technology to prevent theft.”

Gillette said digital video recording systems, public view monitors and anti-shoplifting systems continue to be popular among loss prevention professionals.

“Many retailers are switching to digital video systems because they provide higher quality pictures and can be accessed remotely,” Gillette said.