By Mark R. Doyle, President Jack L. Hayes International, Inc.

The world has always had its share of liars, cheats, and thieves. However, as reflected in this year’s 26th Annual Retail Theft Survey, retail theft - is once again - exceeding old norms.  This year's survey reports on 23 major retail companies, representing 23,204 stores, with retail sales of $669 billion (2013). The survey participants were all large retail companies (Department Stores, Mass Merchants, Big Box) who truly practice true loss prevention strategies, yet they still apprehended 1.18 million shoplifters and dishonest employees in 2013, and recovered more than $199 million from those apprehensions.


The results of these continuing theft losses by shoplifters and dishonest employees result in lower profits by retailers, higher prices to consumers, loss of tax dollars, and even the closing of some stores.

Highlights from this highly anticipated annual theft survey include:

·         Participants: 23 large retail companies with 23,204 stores and $669 billion in retail sales (2013).

·         Apprehensions: 1,180,720 shoplifters and dishonest employees were apprehended in 2013, up 2.8% from 2012.

·         Recovery Dollars: Over $199 million was recovered from apprehended shoplifters and dishonest employees in 2013, up 4.0% from 2012.

 

 

SHOPLIFTING

 

·         Apprehensions: Survey participants apprehended 1,102,635 shoplifters in 2013, an increase of 2.5% from the prior year.

·         Recovery Dollars: Dollars recovered from shoplifting apprehensions totaled over $144 million in 2013, an increase of 4.5% from 2012. This was the 11th increase in shoplifting recovery dollars in the past 12 years.

·         For the 17th consecutive year, dollars recovered from shoplifters where no apprehension was made (over $98 million) increased. In 2013, this increase was an amazing 22.2%.

·         Case Value: The average shoplifting case value in 2013 was $130.89, which was an increase of 2.0% from 2012’s average case value

We asked our survey participants what they thought was the cause(s) behind the continued increase in shoplifting apprehensions and recovery dollars in 2103 and they contributed the following to increased shoplifting activity:

·         Continued growth and complexity of Organized Retail Crime (ORC) activity

·         Lackluster economy and continued higher unemployment levels

·         Carrying higher dollar product lines/items

·         Less sales associates on the selling floor to prevent thefts

·         More focus by Loss Prevention staff

·         Overburdened Criminal Justice System

How can companies reduce their vulnerability to shoplifting?

Listed below are a few suggestions:

 

·         Provide good customer service: Shoplifters want and need privacy; so take it away

      from hem.  When they respond “I'm just looking”, teach employees to say “Ok great, I’ll

      keep my eye on you in case you need any assistance”.  Honest customers are ok with

      this (you are there if they need help), and this is the last thing a shoplifter wants to hear.

·         Have employees walk the sales floor: Keep visible, and keep displays neat and organized (so missing items can be more easily noticed).

·         Have good sight lines on the sales floor: Do not block the view of high value and

      highly popular items, and keep these items near employee work areas.

·         Limit Items on sales floor: Limit the number of certain items (high value, highly

      pilferable) placed on the sales floor.  This will reduce vulnerability to large losses of these  

      items and make it easier to identify missing items.

·         Use technology: Such as EAS (electronic article surveillance), merchandise alarms,

      CCTV, ink/dye tags, product tie-downs, and bulky packaging.  Also ensure policies/

      procedures regarding technology are adhered to.

·         Know your merchandise: Especially highly popular items, high value items, what's stolen most often and what’s easily stolen.  Study why items are taken, evaluate their locations and packaging – then make changes.

 

 

DISHONEST EMPLOYEES

 

·         Apprehensions: 78,085 dishonest employees were apprehended in 2013, up 6.5% from 2012.

·         Recovery Dollars: Over $55 million was recovered from employee apprehensions in 2013, up 2.5% from 2012.

·         One out of every 39.5 employees was apprehended for theft from their employer in 2013. (Based on over 3.0 million employees.)

·         Case Value: The average dishonest employee case value in 2013 was $706.21, which was a decrease of 3.8% from 2012’s average case value ($733.87).

·         On a per case average, dishonest employees steal approximately 5.4 times the amount stolen by shoplifters ($706.21 vs $130.89).

 

We asked our survey participants what they thought was the cause(s) behind the continued increase in employee theft apprehensions and recovery dollars in 2013, and they contributed the following to increased employee theft activity:

·         Lackluster economy

·         More diligent review and follow-up on dishonest employee cases

·         Increased focus and resources by Loss Prevention staff

·         Increased exception reporting capabilities

·         Less supervision and more part-time associates

·         Abuse of Loyalty Programs is increasing

 

How can companies reduce their vulnerability to dishonest employees?

Listed below are a few suggestions:

 

·         Effective Pre-Employment Screening Process: The first step to controlling employee

theft starts at the point-of-hire; do not hire the “bad apple”. A thorough pre-employment screening process including, reference checks, “honesty testing”, SSN trace/verification, criminal background checks, and drug testing is most important.  Money spent up-front in the screening process to identify ‘quality’ employees will result in savings from reduced turnover and losses.

·         POS Exception Monitoring: Use a POS exception based monitoring program to quickly

identify possible fraudulent transactions at the point of sale (ie. excessive refunds or voids; refunds or voids before or after store hours; etc.).

·         Auditing for Compliance: Ensure consistent compliance to company policies and procedures by conducting loss prevention/shrink audits on a regular basis.  By reducing the opportunity, you reduce the chance of theft/loss.

·         Training & Awareness: Invest in loss prevention training and awareness programs for

 all employees, and a reward program for employees who report dishonest activities.

·         “Back to Basics”: Ensure "LP basics” are in place and adhered to at all times:

      -     Door controls (OH doors locked and Exit doors alarmed)

      -     Trash controls (Monitored, supervised and dumpster locked)

      -     Package/bag checks (conduct whenever an employee exits the location)

      -     POS controls (2 people witness and verify refunds and voids)

 

 

About The Author: Mark R. Doyle, is President of Jack L. Hayes International, Inc., and has over 28 years experience in the loss prevention field.  He has consulted with some of the finest retail, wholesale and manufacturing companies in the world.

Hayes International, Inc. has been in the Loss Prevention/Shrinkage Control consulting business for over 35 years, and is recognized on an international level as the foremost loss prevention and inventory shrinkage control consulting firm in the world.

 

 


SURVEY PARTICIPANTS

Ø  23 Large Retail Companies

Ø  23,204 Stores (representing an excellent cross-section of the United States)

Ø  $669,385,561,011 in Annual Retail Sales (2013)

 

TOTAL RETAIL THEFT APPREHENSIONS

                                                                                                                          Difference

                                         2012                           2013                             #/$                         Pct.

 

Apprehensions           1,148,648                 1,180,720                   32,072                  2.79%

 

Recoveries                $191,846,599            $199,463,816            $7,617,217             3.97%

 

Avg. Case Value         $167.02                      $168.93                      $1.91                    1.15%

 

Retail Theft Apprehensions Breakdown

 

SHOPLIFTING

                                                                                                            Difference

                                         2012                           2013                             #/$                         Pct.

 

Apprehensions        1,075,351                     1,102,635                 27,284                    2.54%

 

Recoveries             $138,056,274               $144,319,615               $6,263,341          4.54%

 

Avg. Case Value      $128.38                            $130.89                   $2.50                     1.95%

 

Hours Per

Apprehension*              38.32                          37.30                                                      -2.66%

(*6 companies reporting)

 

Recoveries                $80,715,127              $98,648,755              $17,933,628          22.22%

(No Apprehension Made)

 

 

 

DISHONEST EMPLOYEES

                                                                                                                          Difference

                                         2012                           2013                             #/$                         Pct.

 

Apprehensions           73,297                        78,085                          4,788                   6.53%

 

Recoveries                $53,790,325              $55,144,201              $1,353,876              2.52%

 

Avg. Case Value            $733.87                                    $706.21                               -$27.66                        -3.77%

 

End.