Shoplifting takes billion dollar toll on retailers


The problem of shoplifting continues to be a scourge on Australian retail – new figures show nationwide, the bill for stolen goods, stocktaking and till errors comes in at $2.4 billion.

The Global Retail Theft Barometer (GRTB) 2012-2013, by Checkpoint Systems and Euromonitor International, found that cost is passed on to shoppers in order to compensate for the losses.

In fact, Australian households wear the second highest ‘honesty tax’ in the world, paying some $290 per year in increased prices.

Shoplifting has overtaken employee theft as the biggest cause of shrinkage, accounting for 45 per cent, and 27 per cent respectively.

Supplier fraud accounted for 7 per cent, and administrative errors and non-crime losses represented for 21 per cent of overall shrinkage.

Mark Gentle from Checkpoint Systems Australia believes one reason behind the rise in shrinkage is the increased investment in internal security, to the detriment of traditional security measures – namely closely monitoring customer theft.

“The lower employee theft rate has been a result of the focus retailers have had on staff training and security solutions such as radio frequency electronic article surveillance (EAS), making it more difficult for staff to steal from their place of work. Now we are seeing an increase in the rate of shoplifters meaning that some retailers will need to revaluate security measures and look at new security technologies that are emerging,” Gentle said.

As an example, department store Myer stated in its Annual Report 2013, that shrinkage (stock theft and fraud) was reduced by 11 per cent on the previous year. This figure was below world-wide department store best practice, due to the store’s previous investment in leading closed-circuit TV system technology, security tags and a comprehensive communication program for team members.

Notably the most common items stolen in Australia include:

  • Fashion accessories
  • Jeans
  • Footwear
  • Lingerie and intimate apparel
  • High-value electronics
  • Consumer health (allergy treatments, milk formula)
  • Electronic games
  • Satellite navigation/GPS
  • Mobile device accessories (cases and earphones)

Gentle said that retailers should look at a more holistic approach to loss prevention if they are to see a reduction in their shrinkage for the next year.

“Retailers who recognise that loss prevention is not one single issue have the best results in reducing their shrinkage. There is a need to work collaboratively to combat shoplifting, employee theft, vendor loss and administrative errors all at the same time,” he said.