The Rise in Retail Theft

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When the economy improves – and no matter how stagnant the recovery has been, 2010 was a better year than 2009 – you’d expect shoplifting incidents to decrease. The better off people are, the less incentive they have to steal.

According to a new report from the National Retail Federation (NRF), however, “shrinkage”  – the industry term for inventory loss due to shoplifting, employee theft, paperwork errors and supplier fraud – actually rose in 2010, to 1.58% of all retail sales, from 1.44% of all sales in 2009. In dollar terms, shrinkage cost U.S. retailers $37.1 billion in 2010, versus $33.5 billion in 2009, a 10.7% jump.

Consumers bear the brunt of this cost. “We need to be concerned,” says Richard Hollinger, a University of Florida criminologist who conducted the NRF-sponsored study. “We all pay for it. This theft amounts to an involuntary tax to compensate retailers for crimes that take place in their stores.”

So what’s causing the surge in stealing? First off, America still has a chronic unemployment problem, and as benefits run dry, people get more desperate. But Hollinger attributes a chunk of the worsening problem to more organized retail crime rings. “Shoplifting used to be an individual thing,” says Hollinger. “Now, groups are stealing in large quantities, and it’s a global enterprise.” According to another NRF survey, 94.5% of the 129 retail companies questioned say they have been victimized by organized retail crime over the past 12 months, the most in the survey’s seven-year history. Technology makes the trade more lucrative: criminals can lift items and easily move them on auction sites like EBay.

Law enforcement is keying in on the issue.  In Phoenix, for example, 36 people were arrested in February for their alleged participation in a retail crime operation. The name of the police effort: Operation Orange Crush.

America’s stores need more of these stings.