WASHINGTON, DC- Theft and fraud continue to be a huge problem according to the National Retail Federation (NRF), although it appear to be getting better.
A new study released by the NRF estimated that retailers lost more than $16 billion to shoplifting in 2014. The survey found that another $15 billion was lost to employee/internal theft and $7 billion was lost to paperwork errors. Vendor fraud or errors accounted for almost $3 billion in losses while another $2.6 billion was simply lost to unknown reasons.
The total accounts for nearly $44 billion (or 1.38 percent of retail sales) in losses that are termed inventory shrink.
While the dollar amount is large, Dr. Richard Hollinger, criminology professor at the University of Florida and lead author of the study for the past 24 years, said that this year’s percentage is the lowest seen in the survey’s history.
Still it’s an issue retailers have to deal with.
“A common misperception about shoplifting is that retailers can ‘afford’ the loss of a candy bar or a pair of jeans, but the truth is that the industry loses billions of dollars each year at the hands of callous criminals that could be put towards human capital, promotions and other necessary business operations,” NRF Vice President of Loss Prevention Bob Moraca said in a release.
Retailers are responding to the threat. More than 39 percent of retailers surveyed said they increased their loss prevention budgets for 2015. Just over one-third said budgets would remain the same while 23.9 percent said they had reduced budgets to deal with the problem.
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