Shoplifting, employee or supplier fraud and administrative errors, known as ‘retail shrink’, are collectively costing Australian retailers $2.7 billion per year.
Through interviews with more than 200 retailers in 24 countries, Checkpoint Systems’ Global Retail Theft Barometer found that shoplifting costs retailers the most.
Mark Gentle, Checkpoint Systems (Aust/NZ) vice president sales Asia Pacific, says shoplifting has become more prevalent due to organised retail crime, easy sales of stolen merchandise through online sites, reduced investment in loss prevention, and the perception of shoplifting as a ‘low risk’ crime.
“Shoplifting was the biggest cause of retail shrink in 18 of the 24 countries surveyed,” he says. “In Australia, shoplifting ranked first at 39 per cent and employee theft ranked next at 25 per cent.”
The survey found that shoplifters tend to target easy to conceal items like fashion accessories as well as high value items they can resell, including handbags, denim and smartphones. The Christmas period witnessed the highest shrinkage, as it is a busy sales period with high customer traffic, making it difficult to implement loss prevention solutions.
“To combat shrink, retailers are adopting strategies to approach losses from a wider perspective from all levels within the organisation and work with their supplier and solutions partners,” says Gentle.
“With the right technologies, people and processes, they can achieve improved merchandise availability, which directly impacts shoppers’ satisfaction and retailers’ profitability.”
To help protect your business from retail shrink, try these tips:
1. Use internal data to better understand shrink performance metrics at SKU, category and store levels
2. Establish an awareness program—use signage in store to highlight how you prevent theft e.g. CCTV in use
3. Conduct pre-employment background screenings of potential employees to decrease dishonest employee theft
By Ruth Cooper
