U.S. retailers losing up to $60B a year to fraud

A new survey has revealed some more glum news about shrink in the U.S. retail industry.

The 2015 U.S. Retail Fraud Survey by Retail Knowledge and Volumatic has estimated that U.S. retailers are losing $60 billion a year to shrink -- up from $57 billion last year. And employee theft is the single biggest cause of loss to retailers.



“American retailers generally put losses owing to staff ahead of losses owing to external shrink,” said Paul Bessant of Retail Knowledge. “As economic conditions continue to be tough for retailers and consumers alike, it is perhaps not surprising that employee theft is such a big problem. Perhaps the poor economic situation has led to good people making bad decisions.”



James Harris of Volumatic, the US Retail Fraud Survey sponsor, underlined the value of the Survey, saying: “I am confident that the outputs of this survey will help the loss prevention community benchmark themselves against their contemporaries and identify opportunities to engage with their businesses, as well as each other, to win back some of the multi-billion dollar hole in profits that is being created through shrinkage.”



While the survey reported average shrink as a percentage of sales at 1.27%, very similar to last year, in cash terms this equates to an increase of $3 billion this year.



Further highlights of the survey include the increase in return fraud, up from an average of 0.25% of sales last year to 0.31%, as well as the increased fraudulent use of credit cards (66%) up from 59% last year.



The study represents 91 retailers with annual sales totaling $844.6 billion, and 18% of the total North American retail sector by sales value and encompassing 102,550 stores.