A $4.7 Billion Christmas Bonus?
By Matt Pillar, editor in chief
In my previous column for NextLP I wrote about the spike in return fraud that retailers typically experience this time of year, with some tips from the experts on what to look out for. This time, we’re addressing a source of holiday loss that’s a bit more overt, much of which you’re suffering at the hands of the people on your very own payroll.
U.S. retailers are well on their way to an $8.9 billion holiday season (mid-November through Christmas) hit as a result of shoplifting, dishonest employees, and vendor or distribution losses, according to a new study from the Centre for Retail Research.
The report found that American retailers could lose $3.8 billion through shoplifting, $400 million through vendor and distribution losses and—make sure you’re sitting down for this—$4.7 billion through employee theft. That’s almost $9 billion, gone in a mere month and a half. Happy holidays.
The report, titled Shoplifting For Christmas 2012, was funded by an independent grant from Checkpoint Systems. It suggests that the losses incurred by the retail industry over this period could equate to an extra $98 tacked on to each U.S. family’s holiday season shopping expenses.
Holiday Losses Up 4% Over 2011
In total, losses this holiday shopping season are projected to show a 4% increase over the same period last year. The primary contributors to retail crime during the holidays are no different than at any other time of year; they’re just amplified. Centre for Retail Research data suggests that shoplifting accounts for 42% of retail losses, bested only by employee theft at 53%.
Speaking about the results, Professor Joshua Bamfield, director of the Centre for Retail Research and author of both the report and the new book Shopping And Crime, says the Christmas season is an especially attractive time for criminals because it’s easier to stay covert in all the hustle and bustle, and stores are well-stocked with the merchandise they seek. “Thieves take advantage of busy stores to steal high-value, high-demand goods. As a result, retailers face a big threat from professional and semi-professional thieves, many of whom steal goods with the intention of re-selling them,” says Bamfield. “Organized retail crime [ORC] is a major concern for retailers – especially since the average amount stolen per incident is much higher than ‘normal’ thefts.”
Still, the amount stolen by ORC rings isn’t as appalling as the $4.7 billion the industry will lose through “inside jobs” (some of which could be tied to ORC, indeed) this season.
What To Watch: The 10 Most-Stolen Items During The Holidays
Knowing who’s taking is only part of the retailers’ defense. Knowing what they’re going to take enables you to get proactive about the protection of certain high-risk merchandise during this season. According to the report, the categories most likely to be stolen over the Christmas period are:
- Women's clothing and fashion accessories
- Perfume and health/beauty gift packs
- Electronic devices such as smartphones and tablet computers, toiletries for men
- DVD gift sets and game consoles
- Food and Christmas decorations
- Electrical goods including hardware/DIY
- Watches and jewelry
- Chocolates and confectionery
Some of these categories clearly suggest ORC activity due to their black market resale value. Others, however, suggest a considerable market for stolen goods under the Christmas tree. In any event, the list suggests that some seasonal rearranging of merchandise protection resources and technologies is probably in order. Many retailers make the mistake of considering merchandise protection a static exercise, but shoplifting is as seasonal a business as merchandising is.
For more on the report, go to www.retailresearch.org.