Global Retail Theft Study Reveals Employee Theft Totals $41.65 Billion in Total Shrinkage

Robert Capwell

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The fifth edition of the Global Retail Theft Barometer has just been published by the Centre for Retail Research and reveals a 6.6% increase over previous years in overall retail shrinkage and hit its highest mark since 2007.  The study attributes shoplifting, employee theft, supplier fraud, administrative errors and organized retail crime as the combined cause of $119 billion in total global retail shrinkage for 2011 as reported from 43 countries.  This staggering number equates to over 1.45% of total sales as compared to last year’s study of 1.36%.  The United States rounded out the top ten of highest reporting countries at 1.59% of total loss.


Here are the top ten countries which reported the highest loss rates:

India

  2.30%

Mexico

1.68%

Russia

       1.74%

Thailand

1.64%

Morocco

       1.72%

Turkey

1.63%

South Africa

       1.71%

Malaysia

1.62%

Brazil

       1.69%

United States  

1.59%


Globally, the grocery industry continues to get hit hard in overall shrinkage in today’s economy with the following product areas seeing the highest losses:

Cheese

3.09%

Fresh Meat

2.79%

Candy, Confectionary, Chocolates

2.78%

Luxury Cooked Meats

2.74%

Alcohol/Liquor/Whisky

2.47%

High Quality Seafood/Fish

2.46%

Infant Formulas

2.33%

Spices/Seasoning/Vanilla

2.02%


Total shrinkage varied by country and also retailer; however, the hardest hit vertical markets included the following:

Outerwear

2.94%

Apparel/Clothing and Fashion/Accessories

1.87%

Cosmetics/Perfume/Health and Beauty/Pharmacy

1.79%

Footwear

0.99%


Employee Retail Theft Surpassed Shoplifters
Employee dishonesty and theft contributed towards $41.65 billion in total loss or 35% of the survey’s total shrinkage number of $119 billion.  Employee theft in North America (44.1%) and also Latin America (42.6%) surpassed shoplifters according to the survey.  The average value of merchandise stolen by employees was more than eight times that stolen by shoplifters.  These global figures are consistent with other studies produced in the United States that support higher dollar value items were stolen by internal staff members over shoplifters as sited by the 2011 23rd Annual Retail Theft Survey Jack Hayes International.  “The cost to retailers is even higher if you factor in the impact of criminal gangs, growing levels of violence against employees and customers, and the links between retail crime and drugs, fraud and extortion,” said Professor Joshua Bamfield, Director of the Centre for Retail Research and author of the study. “Moreover, retail crime on average cost families in the 43 countries surveyed an extra $200 on their shopping bill, up from $186 last year. In the U.S., that figure was $435.”

Retail Employee Background Checks
Employment Background Investigations (EBI) works with retailers across the nation to provide a full range of comprehensive and legally compliant employment background check solutions to help retailers prevent employee theft and reduce the risks and liability of a bad hire.

Here are a few tips for U.S. retailers when conducting criminal background checks: 

  • Properly identify your subject up-front to be sure you have the right candidate when conducting a background check.  Background screening professionals use electronic database information that helps them connect the dots when identifying aliases and other names that may not be disclosed by the subject.  This is especially true for criminals trying to hide identity and prior criminal activity;
  • Conduct a criminal background check where the subject has lived and worked using all disclosed and developed names and addresses for an extensive period of time (typically 7 years, if not more);
  • Search criminal court records within county, state and federal courts using information as described above.  Utilize national electronic criminal history information to help fill-in the gaps and conduct a criminal search with a national and international scope;
  • Search numerous government agency lists to be sure that your candidate is not currently being pursued by law enforcement agencies or may have an outstanding warrant for arrest;
  • Verify prior employment credentials to help identify any prior activity of theft, fraud or performance related issues.
  • Conduct employee drug testing to ensure that your employees don't add to additional security and safety risks. 

EBI is committed to providing employers with valuable education and resources on changing legislation and cutting-edge and compliant solutions to meet federal, state, local and international mandatory requirements. If you found this information useful, select the button listed below and access more industry news, resources and tips from EBI, an NAPBS Accredited screening firm and global leader in the background screening industry.

 

Background Checks, Global Background Checks

Robert Capwell

Posted By: Robert Capwell

EBI’s Chief Knowledge Officer, Mr. Robert E. Capwell, is considered one of the leading experts in the background screening industry with over 22 years of experience in the field. Mr. Capwell was a contributing author of the second edition of the ASIS Pre-employment Background Screening Guidelines and has written numerous articles and whitepapers for various publications including a periodic column on background screening for The Society for Human Resource Management (SHRM) Online. He has been quoted in The Wall Street Journal, Human Resource Executive Magazine, Entrepreneur Magazine, and several HR-related publications. Mr. Capwell speaks regularly to industry colleagues and HR Professionals both nationally and internationally.

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