NRF details retailers' $44B problem

Retailers are losing billions of dollars to shoplifting, employee/vendor theft and administrative error, according to the National Retail Federation.



A new NRF survey shows that inventory shrink averaged 1.38% of retail sales, or $44 billion, in 2014. (The methodology for the survey changed in 2015 and as such, NRF does not have comparable data from prior years for this year’s report.) The report was sponsored by the Retail Equation.



Shoplifting accounted for the largest part of reported shrink in 2014, at 38%, followed by employee/internal theft (34.5%), administrative and paperwork errors (16.5%), vendor fraud or error (6.8%) and unknown loss (6.1%), the report noted.



When it comes to loss prevention budgets, 39.4% of those surveyed say their budget for 2015 increased from the prior year; just more than one-third (36.6%) said their budgets would be similar to what they were last year – leaving 23.9% of respondents with decreased resources.



“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 towards human capital, promotions and other necessary business operations,” said NRF VP of loss prevention Bob Moraca. “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.”