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by Dave Gradijan

Numbers: Employees Still to Blame for Most Retail Theft

News
Jan 16, 20082 mins
Build AutomationCSO and CISO

Despite growing concerns about organized retail crime, survey fromRetail Systems Research finds that employee theft is still the topcause of retail shrink

By Katherine Walsh

A new study from Retail Systems Research, “Winning Trends in Loss Prevention,” shows that employees are still the biggest driver of store shrink.

The study, which was funded by two vendors that serve the retail industry, is based on the results of an online survey of 96 retailers. Although organized crime is a growing concern (see “Mall Rats,” an interview with John Talamo of Limited Brands), the top sources of shrink remain the same: customer and employee theft. Respondents ranked the top sources of theft as follows:

* Employee theft of merchandise in stores: 70 percent

* Customers stealing merchandise: 53 percent

* Employee theft of cash: 45 percent

* Paper shrink (missed markdowns): 32 percent

* Fraudulent returns: 25 percent

* Organized crime rings: 21 percent

Fifty-six percent of retailers surveyed think they could reduce shrink by 10 to 25 percent with the implementation of new loss prevention (LP) initiatives. However, they report that the greatest inhibitor to the adoption of LP initiatives is expense (82 percent), trouble proving ROI (55 percent), and lack of staff to review LP and audit data (42 percent).

Staff Writer Katherine Walsh can be reached at kwalsh@cxo.com.