New Study Finds U.S. Retailers Losing $32 Billion To Theft
Losses from employee theft reach record levels

BOCA RATON (Nov 23, 2001)With retailers already in the midst of one of the most challenging sales climates in years, a new retail study reports that inventory theft could further erode retail profits, especially during the critical holiday shopping season.

Inventory "shrinkage," a combination of employee theft, shoplifting, vendor fraud and administrative error cost the nation's retailers $32.3 billion last year, according to the recently released National Retail Security Survey, which analyzed theft incidents from 116 of the largest U.S. retail chains. The annual survey was conducted by the University of Florida.

UF criminologist Richard C. Hollinger, Ph.D., who directs the National Retail Security Survey, said results indicate that in 2000, retailers lost 1.75 percent of their total annual sales to these problems, up from 1.69 percent last year.

"Given that the surveyed portion of the retail economy annually transacts over $1.845 trillion dollars, this percentage of loss is worth over $32 billion," Hollinger said. "This means that the single largest category of larceny in the United States is the crime that occurs in retail stores. This figure is larger than motor vehicle theft, bank robbery or household burglary combined."

According to the study, retail security managers attributed more than 46 percent of their losses to the thefts of disgruntled workers. In comparison, 31 percent of retail losses were the result of shoplifters. The remainder of annual retail losses are due to paperwork errors (17.6 percent) and theft by vendors (5.8 percent). Translated into U.S. dollars, retail employee theft costs retailers $14.9 billion annually, while shoplifting costs $10 billion.

"Technologies such as anti-shoplifting systems, digital video surveillance and point of sale monitoring solutions, tied together with remote and central station monitoring, will help retailers contain some of these losses without sacrificing good customer service."

According to Hollinger, results of the survey should serve as a wake-up call to the retail industry that shrinkage continues to be a significant source of revenue loss amounting to billions of dollars.

"In today's environment of heightened awareness about increased security measures it's becoming increasingly important for retailers to address the security lapses that allow these kinds of losses. In the end, it is the consumers who will have to pay the price for shrinkage in the form of higher retail prices." Hollinger concluded.

CONTACT: Richard C. Hollinger, Ph. D. of University of Florida, +1-352-335-0715

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Copyright 2001 PR Newswire Association, Inc.