Thefts, fraud and losses from other retail “shrink” decreased to $46.8 billion in 2017 from $48.9 billion the year before, according to a report from the National Retail Federation.
Shoplifting and organized retail crime continued to be the leading causes of theft losses, the annual NRF- University of Florida Security Survey found.
“Retailers are making progress in combating criminal activity, but there are still many challenges,” observed NRF Vice President of Loss Prevention Bob Moraca.
“Whether the threat is coming from cybersecurity, organized retail crime or employee theft, the job for retail security teams continues to become more difficult every day, especially when resources and staff are limited.”
Two-thirds of loss prevention executives said they meet at least quarterly with their IT/cybersecurity counterparts to discuss potential threats, and 86% said their companies have a cybersecurity incident response plan in place.
“Cybersecurity concerns are top-of-mind for retailers today as criminals continue to become more sophisticated in this area,” said Richard Hollinger, a University of Florida criminology professor and the lead author of the report.
NRF reported that “shrink” averaged 1.33% of sales, down from 1.44% in 2016. A total of 59% of retailers surveyed said shrink was flat or decreasing, up from 51%. Only 41% said shrink was growing, down from 49%.
Shoplifting and organized retail crime were the most frequent causes, accounting for 36% of losses, followed by internal employee theft (33%), administrative paperwork errors (19%) and vendor fraud or mistakes (6%).
The most substantial losses per incident came from retail robberies, at an average $4,237 each (down from $5,3010 in 2016), followed by employee theft at $1,203 (down from $1,923) and shoplifting/ organized retail crime at $559 (down from $798).
