Introduction

The fact that both customers and employees steal is a persistent – and costly – headache for retailers of every size, from mega-stores like Wal-Mart and Target to your “Mom and Pop” local drug or grocery store. Indeed, large retail chains spend great sums in the area of loss prevention to counteract both internal and external thieves. And overall, the impact is substantial – and far greater than most people realize. The theft losses experienced by retailers are driving consumer prices higher, hurting our economy, and even forcing some retailers to close stores or go out of business.” In the U.S., studies consistently show that retail theft causes losses of between $35 and $40 billion annually. Yet, retail theft is in all actuality a global problem on a massive scale. In fact, according to a recent study from the Center for Retail Research, the world’s retailers lose almost $100 billion annually to theft!

Shoplifting 101

            The “five finger discount” has become an all-too accepted part of the American lexicon. In recent years, we’ve seen celebrities, politicians, sports stars caught in the act of shoplifting items of little real value, but with embarrassing and grainy store surveillance footage showing-up on the cable networks and You Tube – often with career-devastating consequences. All too often however, shoplifting is an all too pedestrian crime, being the outward manifestation of a person’s deeper demons. In fact, the vast majority of “traditional” shoplifting is carried out either by those with psychological problems (typically kleptomania issues, as well as depression and low self-esteem) and/or those with need for money (drug, alcohol, and gambling addiction being a prime motivator).  Research from the anti-shoplifting education group, Shoplifters Alternative (SA), shows that such habitual, non-professional shoplifters make-up approximately a quarter of all shoplifters. However, their impact is quite significant, due to the sheer frequency of their stealing. In fact, the SA study showed that such “frequent stealers” may account for as much as 85% of the dollar losses from shoplifting!  

            Shoplifting problems are not uniform across the retail sector.  Indeed, as can be seen in Table 1, while the overall retail theft rate is approximately 1.5% of retail sales, the actual loss rates vary greatly across retail segments.

Table 1 – Shrinkage Levels Across Various Product/Store Categories