Retail Theft Statistics: Staying Focused on What’s Really Most Important

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There are many different ways that retail theft statistics can be applied in order to show how the many different ways that shoplifting, employee theft, and other forms of retail loss can impact a retail enterprise. But how are retail theft statistics really used, and what numbers are truly most important?

The answer to that question isn’t as easy to answer as many in the general public may seem to think it is—and truthfully, for many of those beginning a career in loss prevention, the answer isn’t as simple as many might believe as well. This is in fact a much more complicated question that can be answered in many different ways depending on the type of retailer, the approach that the organization takes to loss prevention, and even the way that these statistics are applied on a situational basis.

This isn’t to imply that retail theft statistics aren’t critically important to the way that a particular retailer might manage their loss prevention program, staff their departments, or train their people—because they are. These numbers are very important, and the many different resources that provide us with this information offer a valuable and important service to the entire retail community. What’s most important is the way that we interpret the available information in our own particular setting, and then apply what we’ve learned to best serve the interests of the company that we work for. Let’s take a closer look at a few examples to better illustrate our point.

Shoplifting and External Theft

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Retail theft statistics that focus on shoplifter apprehensions can provide us with a very deceiving metric in many situations. While a high number of shoplifter apprehensions might offer a particular perception of the crime occurring in a particular store or market, it may also simply provide a reflection of the ability of the department to identify and detain shoplifters. It might be a result of the approach that the department takes regarding external theft matters—whether they prefer to take a more proactive approach to deterring shoplifters rather than a more reactive approach such as making shoplifter apprehensions.

Such statistics might be a result of a specific focus. For example an organized retail crime (ORC) task force that has been assembled to combat the impact that these highly sophisticated groups can have on our stores might influence our statistical results. These dedicated and often dangerous thieves can wreak havoc on a retail company to the point that entire stores are frequently found to be stocked with stolen goods. Individuals with substance abuse problems and violent criminal pasts are often involved, providing significant damage to the company, significant drama within the community, and significant attention towards those involved in the crimes.

In other situations, a low number of shoplifter apprehensions might provide us with a deceptive picture of the problem for other reasons. Low shoplifter apprehensions aren’t necessarily the result of low crime rates. Many specialty retailers, for instance, won’t have a dedicated loss prevention team in the stores; and won’t allow their store associates to make shoplifter apprehensions for a variety of reasons to include a lack of appropriate training and most importantly safety concerns. These employees are typically trained to deter theft and provide exceptional customer service to avoid many theft-related episodes rather than to confront shoplifters. Naturally, this doesn’t imply that shoplifting doesn’t occur or that the store doesn’t have a significant problem.

Yet some of the most confounding retail theft statistics occur when certain cities and particular jurisdictions begin to refuse to respond to retail stores to arrest shoplifters. Feeling these situations involve “minor” crimes that simply demand too many resources for the department to manage this multi-billion dollar problem, they simply notify the retailers that they will no longer respond. Some of these jurisdictions will later release crime statistics claiming that shoplifter incidents have dropped in their communities—failing to associate the drop in shoplifting arrests with a failure to make such arrests in the first place.

Employee Theft

Even employee theft statistics can fail to provide a true picture of a potential problem. For example, I recall a situation involving a director of loss prevention boasting how 39 employees were terminated for theft from a single store over the course of one year. He applauded the efforts of the loss prevention representative covering the market and rewarded him for his dedication and hard work in removing these individuals from the company. That director then challenged the rest of his team, criticizing them for not being able to match these results in any of the other markets.

How should we look at these numbers? Should the employee be rewarded? Should the rest of the team have been criticized? Once again, we have to consider the circumstances, the type of retail store, and other factors necessary to appropriately interpret the retail theft statistics.

In this particular situation, this retail store had a total of twelve employees on staff—not at any given time on a given day, but the total team for that specific store. This store was in a tough neighborhood with many challenges. However, if the store actually turned over the entire staff on four occasions (having to replace the team three times) for theft in a single year, I would argue that the loss prevention representative should be reprimanded rather than rewarded.

Obviously, nothing or very little was done to ensure that the problem didn’t occur again. Management and employee training, increased and improved store audits, enhanced security controls, improved hiring practices, more store visits (for reasons other than to interview dishonest employees), an improved business partnership with the store and district sales managers, and any number of simple and necessary steps should have taken place to make sure that the ongoing problem didn’t continue on a consistent basis.

In fact, the most important statistics were overlooked altogether.

Retail Shrink

When measuring retail theft statistics, the most important metric that we must look at is the impact that these incidents have on retail shrink numbers. The role of retail loss prevention is to enhance the profitability of the company—just like every other role in retail. There are many different ways that this role is fulfilled in today’s retail environment, and that role is changing on almost a daily basis. There are also other responsibilities that we are typically asked to complete as we serve the needs of the organization. But it remains a primary role of the loss prevention/asset protection department to reduce retail shrink.

In the employee theft situation described, the loss prevention representative that was rewarded had the highest shrink numbers in the department. Clearly there are many different factors that can impact these numbers. Without question, the individual was an exceptional interviewer and investigator. But there’s much more to being a successful loss prevention professional than simply “catching bad guys.”

The Value of Information

Retail theft statistics provide us with a wealth of information that helps to improve the performance of a retail organization. There are a number of annual surveys that help us gather and apply these statistics in the retail environment and assist our loss prevention teams, and these tremendous services provide an invaluable asset to the entire loss prevention community. But as these numbers are provided, it’s critical that we also pay close attention to how the numbers are interpreted by the experts.

The subject matter experts that offer these survey results also help interpret the results of the surveys so that the information can be better applied in the retail environment, and that message is just as important for us to hear. Further, retail loss prevention leadership puts extensive effort into evaluating these statistics and constructively applying the information to a particular retail setting.

The value of information comes by understanding the purpose. Without appropriate interpretation and action, these are just numbers. As a retail company, this helps us better understand how theft truly impacts company profits—which are then passed on to the consumer. As a retail employee, it helps us better serve the both company and our customers.

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