Customer theft hits new heights as retail industry crime costs businesses $3.37 billion
The first dedicated retail crime survey for Australian and New Zealand retailers has revealed a dramatic increase in customer theft, which now accounts for over 50% of the revenue lost from stores from crime.
The Australia and New Zealand Retail Crime Survey from retailers representing over 9,000 stores with an annual turnover of approximately AUD$95 billion in the last financial year.
Conducted by Aptus Research in partnership with the Profit Protection Future Forum ANZ and sponsored by retail technology company Checkpoint Systems, the sample represents almost a quarter of the retail industry in Australia and New Zealand.
They estimate that crime-related loss is 0.92% of revenue, revealing a $3.37 billion direct cost of crime to the industry for the 2017-2018 financial year.
The majority of these losses have been attributed to customer theft (57%). This figure has jumped 16% in less than two years.
The study also found:
- Telecommunication stores suffer the highest average value of theft - estimated to be ‘more than $1000’ per incident.
- Baby milk formula, meat and face creams are most commonly stolen from supermarkets.
- Supermarkets typically report losses of ‘under $20’ per-incident but occurring more frequently.
- Self-service checkouts continue to be vulnerable to theft. Retailers are responding by introducing more POS video analytics including cameras that film customers at each individual machine.
- Criminals are becoming more organised. There is a large resale market for goods including stolen food and champagne being sold to restaurants, and baby formula being sold to China as part of the ‘daigou’ phenomenon
- Micro-gangs are using ‘steaming’ techniques to brazenly raid shops during operating hours.
Additionally, only 20% of retailers said they were happy with law enforcement response to this rise in crime. Meanwhile, 67% of retailers reported that it was difficult to combat shoplifters with their current resources because of the diverse and sophisticated ways that criminals are now targeting retailers.
‘It’s easy to get away with petty theft.’
Commenting on the study, lead researcher and Reader in Criminology at City, University of London Dr Emmeline Taylor, said: “Thieves now tell me that it’s easy to get away with petty theft. Reward greatly outweighs the risk. There are multiple factors that could be contributing to this, including the introduction of self-service checkout, and changes in criminal behaviour,”
“Thieves are becoming more brazen. We have seen this in the recent “steaming” technique used by gangs to overpower mobile phone shops in broad daylight, often intimidating staff and pushing customers out of the way to reach the stock,” Dr Taylor added.
“Many people think that retail crime is a victimless crime – that the large retailers build expected losses into their profit margin - but it couldn’t be further from the truth. We calculate that AUD $3.37 billion is enough to employ 85,000 supermarket checkout staff for a year.
Vice President of Checkpoint Australia, Mark Gentle said: “From this study, it’s evident that thieves have upped their game and retailers need to adapt to stay ahead. Loss prevention technologies are still the best deterrents for opportunistic shoplifters and when combined with good customer service, will often significantly reduce theft in stores. ”
“It has also become clear that retailers have lost confidence in law enforcement’s response to retail crime and this has allowed shoplifters to become bolder. These findings should encourage retailers to invest in further theft prevention measures. There has been a major focus on cybercrime and cybersecurity in retail. Yet this push towards protecting digital assets has apparently left a gaping hole for shoplifters to take advantage of gaps in retailer’s security in stores.”