Is retail theft up, or is it down? Is the problem as rampant as many retailers claim it to be, or are the claims of devastating losses, organized retail crime, violent confrontations, and their impact on store safety and retail profits over-exaggerated in an attempt to cover poor performance and corporate mismanagement?
Perhaps more to the point, why is there such a tremendous gap between these conflicting points of view? Why do we have those with such passionate perspectives that can’t seem to find common ground? Why can’t we look at the statistics and reach a collective conclusion about what’s happening with retail crime?
As is the case with so many things, the real answers are hidden in plain view. While one may argue that numbers don’t lie, they don’t always tell the whole truth. What may appear to be accurate on the surface may not get to the heart of the matter unless we are willing to dig a little deeper.
A Global Gamechanger
No one needs to be reminded about how the last handful of years have altered the way we live, work, learn, and interact with one another. In many ways our response has been remarkable as we’ve navigated through the fear, pain, and isolation of a global crisis. In other ways we are still catching up, measuring the impact, and looking for answers to questions we haven’t even considered at this point.
From a retail perspective, many questions focus on the impact these events have had on retail crime. For many different reasons, a rise in retail crime was experienced and conveyed by the retail community. That was until specific reports were released, highlighted by a 2023 study from the Council of Criminal Justice (CCJ), which suggested that shoplifting trends and reported activity were down in many cities across the country.
The analysis added a different context to previous efforts measuring shoplifting trends, using data from local law enforcement agencies and the US Justice Department’s National Incident-Based Reporting System (NIBRS). Used by law enforcement agencies across the US to collect and report data on crimes, NIBRS captures detailed information on each reported crime incident as a standardized way to measure what’s going on with criminal activity across the country. While the report’s authors acknowledged that their conclusions only reflected reported incidents that “almost certainly undercount total shoplifting,” they implied that shoplifting incidents were occurring at “below pre-pandemic levels.”
Naturally, this led to a firestorm across the retail community as critics and certain media outlets immediately seized on the reported data and began scrutinizing retail leadership based on the conflicting information. “Why are losses mounting and profits declining if retail crime is down? Are retailers exaggerating the problem to cover other issues?”
Getting to the Truth
“When the CCJ issued their report that claimed that shoplifting was down in major cities across the country, we knew that not to be true,” said Lisa LaBruno, executive director of the RILA Communities Foundation. “So, we started asking ourselves, how did this mixed messaging happen? CCJ is saying that retail theft is down, yet retailers are claiming theft is rising in many major cities across the US. We wanted to get to the bottom of it.”
As part of her work with the RILA-NDAA Vibrant Communities Initiative, Associate Professor Julie Hibdon with Southern Illinois University was asked to research the discrepancy, along with the trends that resulted from this mixed messaging. Once they began taking a closer look, the answer quickly stood out—the research conducted by the CCJ, along with similar reports, relies exclusively on events reported to law enforcement. Unfortunately, if reporting practices for theft events change for any reason, data from law enforcement agencies will not provide an accurate representation of the problem.
“I think the story behind what’s happening with retail theft events is more complicated than it might appear on the surface,” explains Professor Hibdon. “There are a lot of factors that can directly and indirectly influence what, how, and to what extent these crimes are being reported.”
“For example, we need to consider the changes we have seen in resources and employee turnover that are affecting all industries—including both retail and law enforcement—and how this can impact crime reporting,” she continues. “There have been significant staffing drops in policing in many departments, which have limited their operating capacities. These staffing issues, coupled with higher rates of violence in 2020-2021 and speculated reductions in proactive police action, likely play a role in reporting.”
Policy and legal revisions in many states are also contributing factors. This includes bail reform, fluctuating felony thresholds, shifts in offending behaviors such as organized retail crime, e-fencing, and even the adoption of medical masks by offenders to elude identification.
“All of these factors—and possibly more can have a direct and immediate impact on how and when theft and related criminal activity is reported,” claims Hibdon.
Mixed Messages Distort Reporting Realities
While this reporting problem alone can result in a distorted view of crime data, this is not the only factor influencing the essential aspects of crime reporting.
Some law enforcement agencies tell retailers not to report every criminal event, implying that the department doesn’t have the necessary time or resources to respond. Many departments are overworked, under- budgeted, and under-resourced, making it extremely difficult to meet the many demands of a changing society. In some jurisdictions, they may even take it a step further, issuing ordinance violations to retailers for reporting “too much” crime.
Countless accounts support the dilemma faced by police in these circumstances, with departments across the country facing the consequences of being understaffed in the face of rising crime. In many situations, departments are having trouble finding and training new police recruits, with some markets facing hundreds of vacancies. Both current officers and potential recruits are demoralized by decisions to eliminate specialized units such as SWAT and K-9 teams, requirements to live in the markets where they work, local officials cutting police budgets, and even the general perception of police that the current climate has left on the community. All of this leads to the fine men and women of our police departments facing an uphill battle on many different fronts.
With rising expectations and fewer boots on the ground to meet those needs, something has to give. Decisions are made based on what priorities should carry the most weight, often leaving the retail community behind the eight ball. Despite crime occurring in some stores, retailers are being punished if they report “too many” incidents to police, the sentiment being that the retailers need to do a better job of ensuring that the crimes don’t happen in the first place. Ultimately, the victim is being blamed, with retailers being told that they aren’t taking enough steps to prevent theft in their stores.
Retailers are also less motivated to report incidents when reporting is too cumbersome. Many law enforcement agencies have online reporting tools to allow crime victims to report “non‑urgent” criminal activity, which they consider most incidents of shoplifting. Anecdotally, retailers say they would report more theft if it were less burdensome and did not risk damage to their relationships with local law enforcement. Although online reporting could lead to more complete and accurate reporting by retailers, these tools are often underutilized for a variety of reasons.
Ultimately, this underreporting of retail theft perpetuates a false narrative that retail crime is down.
“Decisions about resource allocation are being made based on crime data,” LaBruno reminds us. “So, when a police department says, ‘we’re drowning—I need ten more cops,’ the local government says, ‘according to the stats, your crime is down, including retail theft.’ That’s a big part of why it matters—but it also matters so that we have accurate data. That should be our objective.”
The Survey: Numbers Tell the Story
“What we decided to do was take steps to determine what this underreporting might look like,” says Professor Hibdon. “And so, with the help of RILA and its Asset Protection Leaders Council (APLC), we sent a survey to member companies to compare their recorded external theft activity with what they documented as reported to law enforcement from 2019 through 2023.”
The survey was sent to both large retailers and smaller retailers, representing various retail formats, with questions focused on those numbers as well as dollar losses, threats to employees, injuries to employees, and other related topics for that five-year period.
The study had two primary objectives:
- To understand how often external theft events are reported to law enforcement.
- To examine trends in the proportion of external theft events that are recorded by retailers and then reported to law enforcement.
Findings reveal a notable disparity between external thefts documented within the retail organizations as compared to those documented as reported to law enforcement, underscoring the prevalence of underreporting within the retail sector.
Overall, when assessing the trends of external theft events recorded in internal systems compared to what is reported to law enforcement, the findings indicate a drastic increase in external theft, with the biggest increase occurring between 2021 and 2022.
Next, the reporting rate of external theft events was examined. The reporting rate is simply the number of external theft events reported to law enforcement divided by the number of external theft events recorded in retailer case management systems.
In 2019, the reporting rate was approximately 20 percent. But by 2023, the reporting rate for retailers responding to the survey had been cut to just 10.9 percent. Essentially, this reporting rate indicates very few retail theft events are reported to law enforcement, and over the past five years, despite increases in external theft events recorded in stores, the rate that is being reported has essentially declined to about half of what was reported in 2019, prior to the pandemic.
Depending on the type of retailer, the trends in recorded and reported external theft vary considerably. Over the past five years, reporting rates have declined for mass/big box and grocery retailers. Specialty retailers, on the other hand, show increases in their reporting rates to law enforcement. When considering the average number of recorded events by retailer type, there are notable increases in events for mass/big box retailers and grocers, while the average for specialty retailers remained relatively constant. This indicates that the improved reporting rate for specialty retailers is likely due to increased reporting and not necessarily a declining number of events occurring in stores.
Finally, the survey also asked participating retailers about the losses associated with external theft events, including the documented financial loss from external theft and the company’s net units lost from external theft events. On average, retailers reported a 32 percent increase in dollar loss from 2019 to 2023. Additionally, the average net unit losses across retailers increased every year, more than doubling between 2019 and 2023.
In summary, theft incidents are up dramatically in the stores surveyed, while those incidents reported to law enforcement have been cut in half between 2019 and 2023. Dollar losses are a third higher, and the amount of merchandise lost has doubled.
“The primary conclusions indicate that while the law enforcement data is showing reductions in retail theft, the retailer data is showing the opposite,” shares Hibdon. “It’s reflecting substantial increases. It’s not that retail theft is going down—the retailer
sentiment is that this is a growing problem and has exploded post-pandemic. All of this is supported by the data we collected and the interviews held with these retailers.
“Furthermore, there’s a lot of shared sentiment from all involved that there is a clear need for more accurate reporting,” she continues. “All of the retailer data we gathered is supporting the things that retailers have been saying regarding the loss issues and ultimately the increase in retail theft. Unfortunately, due to the issues with underreporting, this is simply not being communicated to the extent that it should.”
Responsible Reporting
There are many factors that contribute to the current quandary of underreporting of retail theft. But if the narrative continues to focus on finger-pointing over the need to find productive solutions, very little will get accomplished. As a community and as a profession, we need to explore viable ways to communicate information in a way that is accurate, useful, constructive, and practical.
Here are several recommendations collected from our reporting that deserve the industry’s attention:
- The need for more accurate and timely reporting: The importance of accurate and timely reporting was acknowledged by both retailers and law enforcement. Understanding what information to report, how it should be reported, when it should be reported, and the ability to share information in a way that tells the story is always an area of opportunity and something that needs to be underscored across the retail and law enforcement communities.
- The need for clear and consistent reporting guidelines: Compliance parameters for incident reporting that provide a true reflection of the nature of the criminal conduct occurring should be established and followed. Understating criminal incidents to meet constricted criteria for what should be considered a “reported crime” is counterproductive to the needs of the community. Reporting must reflect the true nature of the problem so that decision makers at every level can react accordingly.
- The need for collaborative communication: One of the factors leading to underreporting stems from retailers being concerned about damaging critical partnerships with law enforcement. Retailers and law enforcement agencies must collaborate effectively to address this issue, ensuring that reporting is accurate and retailers are not discouraged from reporting theft incidents.
- The continued development of online reporting tools: Resources are limited for both law enforcement and retailers. Solutions such as online reporting for non-urgent crimes could help collect more accurate theft data without creating a need for an immediate response from law enforcement. Local jurisdictions may need to rethink some of the restrictions they have in place regarding their online reporting tools that prevent retailers from reporting theft incidents. The primary goal needs to shift to collecting accurate data that can then be relied upon by decision makers. The development and increased use of online reporting tools may address some of the underreporting from retailers. However, retailers need adequate education on how to use these tools and the importance of completing these reports for this to be most effective.
- The need for greater collaboration within the solution provider community: Reporting may largely involve a resource challenge, but it also presents a technology opportunity. Retailers need the solution provider community to work together to tackle our biggest challenges. Imagine the progress that could be made if case management systems worked together and had some sort of integration with law enforcement agencies. There’s room for vendor partners to innovate and help address the broader industry challenges we have with reported theft incidents.
- A clear perspective on case consolidation: To tell the full story, a common practice with investigations involving organized retail crime is to present the complete package rather than reporting theft events individually when they are associated with a larger case. In these events, dozens of incidents can be consolidated into a single report, which can skew the reported numbers provided to law enforcement. This pattern needs to be recognized and accounted for in data reporting on retail theft.
Putting It All Together
When it comes to the reporting of retail theft, the story remains layered—but those layers can’t be used to obscure the true message. There are a multitude of reasons why retail theft is difficult to quantify. Understandably, law enforcement agencies and politicians may be uncomfortable with seeing crime statistics go up with additional reporting—but hiding behind incomplete information is misleading, counterproductive, and a disservice to our communities.
Getting to more accurate retail theft reporting requires education at the local, state, and national level, and it is fundamentally necessary to interpret what’s really going on and improve outcomes. Partnerships with organizations such as RILA and the International Association of Chiefs of Police (IACP) can help facilitate these conversations. Understanding why more accurate crime reporting is needed will also need to be impressed upon politicians, the media, and the public at large. But it still requires a shared effort from all involved to put us on a better course and find the solutions we need and deserve.
Recoiling from uncomfortable facts rarely leads to better outcomes, and for retailers, law enforcement, solution providers, and communities to better address retail crime, more accurate reporting is necessary. The sole reliance on police data to understand trends in retail theft is currently telling an incomplete and misleading story. Ensuring we have the information we need must be the first step if we want to make intelligent and meaningful decisions to keep our stores and communities safe and secure.