Survey: Shoplifting, fraud cost retailers $44B in 2014

A survey commissioned by the National Retail Federation found shoplifting, employee and vendor theft, and administrative errors cost the industry $44 billion in 2014.

The figure, known as inventory shrink, average 1.4 percent of total retail sales for the year, according to an NRF news release.

The survey - conducted by the NRF and the University of Florida of 100 senior loss-prevention executives - estimates shoplifting made up the largest portion of inventory shrink last year, at 38 percent; followed by employee and internal theft, 34.5 percent; administrative and paperwork errors, 16.5 percent; vendor fraud or error, 6.8 percent; and unknown loss, 6.1 percent.

“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 toward human capital, promotions and other necessary business operations,” said Bob Moraca, NRF vice president of loss prevention, in the release. “Though we are encouraged by the partnerships forged with law enforcement over the years and advances in technology that will help deter a crime before it happens, criminals continue to thwart much of the progress retailers have made thus far.”

Survey respondents say they are pumping up their loss-prevention efforts. Of those surveyed, 39.4 percent said their budget for loss prevention would increase in 2015, 36.6 percent indicated no changes would occur and 23.9 percent reported decreased resources.

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