Internal theft annually costs retailers approximately as much as external theft. Recent research suggests that shoplift prevention training not only reduces external shoplifting theft, but will also significantly help to reduce internal theft. It is believed that retailers who promote shoplift reduction training on an ongoing basis to their employees, will send their employees a strong message. That message being that the retail establishment takes all forms of retail loss very seriously.


Fred Tarasoff & Associates
1833 Hwy 3A Castlegar BC
V1N 4N7  Canada
Tele: (250) 399-4765
Email: info@stopretailloss.com
Retail Loss Overview
In today's highly competitive environment keeping retail loss, which includes shoplifting, internal theft, fraud, etc. to the utmost minimum is mandatory for the ongoing success of your retail business


Virtually every business experiences loss due to theft, but today the retail industry’s vulnerability to theft in the form of shoplifting as well as internal theft is unparalleled.

More than seventy percent of retail losses come in the form of internal and external theft and can seriously jeopardize a companies existence. Shoplifting can directly contribute to the financial failure of a company and can also put at risk the personal safety of all staff members within an establishment.Today an unprecedented number of businesses in the retail field are experiencing bankruptcy to a large part due to both internal and external shrinkage. Current figures estimate that the average retail outlet in North America will experience losses of 1 and 8 percent of their annual sales, last year these figures were between .5 and 6 percent of annual sales. In Britain, and Australia this figure has jumped to between 2 and 12 percent. According to many leading loss prevention experts it is expected that the retail industry in North America will experience similar increase in overall theft and losses with in the next year or two. It is suspected that the global economic crisis as well as instability in energy costs which in turn effects the cost of all consumer goods is primarily the main factors in the rise of overall theft.

Generally the type of business, the level of security, the level of inventory control and level of employee training determines the amount of losses that a retailer will experience. Even with sophisticated anti-theft devices theft continues to grow, as today's thief is more advanced and sophisticated than ever before. To a large degree the Internet has become a resource for shoplifters and other thieves to learn how to be a more successful thief. 


The cost of shoplifting is often passed on to customers through higher prices which can make the business less competitive as well it makes consumers victims of this crime. Unless a retailer has strict inventory controls in place many retailers may not even realize the extent of the shrinkage which is taking place right in front of them.


Copyright © Fred Tarasoff and Associates 2011
Shoplifting Statistics and Facts
Shoplifting will cost the retailer a great deal of lost profits and everyone pays for this crime. Retailers suffer lower profits and consumers ultimately pay higher prices. Some stores charge up to 7 cents per dollar to cover retail theft which can make a business less competitive.


For Example theft of a $2.00 item from a store operating on a 10% profit margin requires the sale of $20.00 in merchandise to make up for the loss. Supermarkets and other retailers operating on low margins of 1% must sell $500.00 in merchandise, just to cover the cost of a $5.00 item. It's easy to see how out-of-control shoplifting can quickly threaten the viability of your business.


Cost of Shoplifting
Calculate your total yearly retail losses is a fairly simple formula.


Estimate your businesses gross yearly sales, then multiply this figure by a value of 1%. Repeat this calculation again but this time take your gross yearly sales and multiply it by 8%.



Example 1:    $1,000,000 (yearly gross sales)
                 X           1%
                      $10,000 (retail loss)
Example 2 :    $1,000,000 (yearly gross sales)
                 X           8%
                      $80,000 (retail loss)
Generally most retail businesses yearly loses are somewhere between the two examples of 1% and   8 %. Although your yearly gross sales will vary the percent figures will remain constant. Please note that Example 1 represents a business with strict inventory control, ongoing staff loss prevention training and a combination of security systems and strategies. Example 2 represents a company with little or no anti-loss policies.

Shoplift prevention is by far the best method of dealing with a growing problem and a well trained staff is an inexpensive and considered a highly effective method of reducing theft. Prevention is preferred over detection and apprehension because it is the most cost-effective manner of dealing with this growing problem.  Prevention saves the retailer valuable time and money, it also saves the consumer.(For example: each consumer in the US and Canada pay's an estimated $250 each year because of crimes against merchants) and it saves the local police and the court system. Everyone except the thief wins when preventable strategies are fully utilized.

Most seasoned shoplifters admit that they will usually move onto an easier target, when they encounter a staff that has been well trained in shoplifting prevention. Unfortunately many retail employees are inadequately trained in the prevention of retail loss and this is translates to a substantial monetary losses to retailers.

Minimizing Shoplifting
Minimizing Internal Theft
Providing Professional  Loss Prevention Advisory
and Training Services to the Retail Sector
Information and statistics provided by the National Association for Shoplifting Prevention (NASP) a nonprofit organization that shapes, promotes and supports comprehensive community action in shoplifting prevention efforts…because shoplifting steals from all of us.  Contact NASP at 800-848-9595 or visit www.shopliftingprevention.org.
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