US retailers lost 44 billion dollars to shoplifting and fraud last year, survey finds
25th June 2015 16:11 - Retail
A recent survey by the National Trade Federation and the University of Florida has revealed that a massive $44 billion (£28billion) was lost in 2014, as a result of employee or supplier fraud, shoplifting and administrative errors.
During March and April, the researchers interviewed 100 senior loss prevention executives from across a variety of retail sectors. The findings showed that 1.38 per cent of the year's total retail sales was lost due to inventory shrinkage and loss. This percentage translates to $3.19 trillion in 2014.
Of the total loss, shoplifting accounted for 38 per cent, followed by: employee theft (34.5 per cent), administrative paperwork theft (16.5 percent), vendor fraud or error (6.8 per cent) and unknown loss (6.1 per cent).
The average rate of shrinkage decreased or remained flat for around 2 in 3 of the respondents, with supermarkets and grocery retailers declaring the highest average loss as a result of fraud.
Bob Moraca, Vice President of the National Trade Federation, said that a common misconception is that retailers can handle the loss of a small item being shoplifted.
He added: "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."
Of the loss prevention executives interviewed in the survey, 39.4 per cent said that they had a bigger budget for fraud prevention this year than they did last year.
On the other hand, 23.9 per cent said their budget is smaller this year than it was in 2014 and a further 36.6 per cent said that their budget will remain similar to that of 2014.
In 2014, loss prevention budgets averaged at less than 1 per cent of the total sales within the same year.
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