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Shoplifting Apprehensions An All-Time High And Retail Shrink…Went Up?

Posted on 3/22/12 9:30 AM

With this past year’s studies showing shoplifting apprehensions increased by an unprecedented amount, one would expect shrink percentages should have decreased. Unfortunately that is not true. Why?

In a previous blog article titled, “Stealing $49.99 at a time,” I expressed my outrage over the Dallas Police Department’s new shoplifting response policy. It may have appeared that I advocate shoplifting apprehensions as the “most” important aspect of loss prevention. That is not my belief; I am just not in favor of any law enforcement policy that provides less service to retailers. Clearly, shoplifting is an issue and a concern, but we need to balance those efforts against the more important aspects of our programs. Internal theft control and compliance provide a better return on investment. And the numbers seem to agree.QuestionMark

The 2010 National Retail Security Survey (NRSS) reported that shoplifting apprehensions rose to an unprecedented 367 apprehensions per $100 million in sales. This figure represents a number that is four times higher than the previous year. The same survey showed the average retail shrink percentage rose from 1.44% to 1.49% (2009 to 2010) which got me thinking, “Do shoplifter apprehension rates ever correlate to shrink?”

To examine my question, let’s use information from previous NRSS surveys. Now, I am not a statistician and I am not making any claim of a correlation between shoplifting and shrink. In fact, I found no correlation at all. Let’s look at the numbers and you can decide for yourself.

In 2003 the average was 126.4 shoplifter apprehensions per $100 million in sales. That year the industry retail shrink average was 1.65%. The following year the shoplifting apprehension average dropped to 84.6 per $100 million in sales and retail shrink average dropped to 1.54%. The chart shows more current years’ statistics.

Year

Retail Shrink Average

Apprehensions per $100 mil

Average Shoplifting $

2007

1.44

72.5

$345

2008

1.51

63.8

$550

2009

1.44

73.9

$438

2010

1.49

367.0

$338

One might argue when there are fewer shoplifters there is less shrink. One might contend that the shoplifting apprehension rate is reflective of the environmental conditions; i.e. more or less people stealing. However, according to the FBI, larceny statistics have remained flat over the past several years. Therefore, I would conclude apprehension rates are dictated by our focus.

Let’s now look at employee theft apprehensions and their possible connection to shrink percentage. Will this show something different?

Using the same study (NRSS) in 2001, 2002, and 2003, employee theft apprehensions (per $100 million in sales) increased each year as follows – 30.3 per, 35.2 per and 42.2 per respectively. For the same time periods, the average retail shrink percentages were 1.8% down to 1.7% down to 1.65% respectively. Based on these numbers, it appears that the more employee apprehensions, the lower the average reported retail shrink percentage.

Let us continue to look at the most current years’ data.

Year

Retail Shrink Average

Employee Apprehensions per $100 mil

Average Employee Theft $

2007

1.44

38.76

$1443

2008

1.51

21.2

$2673

2009

1.44

62.2

$1905

2010

1.49

55.9

$996

Based on the comparison of employee apprehension statistics versus shoplifting apprehension statistics, it appears employee theft apprehensions have more of a correlation to shrink than shoplifting apprehensions.

What about collusion; where does it fall in these statistics?

Within the 2010 NRSS, the author provides statistics pertaining to employee theft investigations that involve collusion between an employee and a non-employee. According to the survey results, 18% of internal cases involved collusion and 96% of respondents reported at least some collusion between employees and non-employees. Does this act of collusion fall under shoplifting or employee apprehensions?

I make this statement as a word of caution. Let us be cautious in attributing more to shoplifting than it warrants. Our industry has not yet come to a definitive definition of Organized Retail Crime; let’s not do the same with collusion (aka sweet-hearting, aka pass-offs). That type of focus may lead police departments to decriminalize some shoplifting or employee theft in the pursuit of chasing ghosts (in reference to the Dallas Police Department).

In closing, I’ve been in loss prevention for over twenty years. I need no convincing that shoplifting is a large contributor to a retailer’s loss and requires our focus. The percentage of contribution however, has been decreasing over the past few years. These statistics, coupled with my experience, suggests to me that combating internal theft is still the best and most effective way to reduce your loss.

What do you think? Please provide us with your thoughts…


Written by Raymond Esposito
Executive Vice President, LP Innovations, Inc.

Topics: policies and procedures, Loss Prevention program and development

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