Posted on: September 16, 2015 by titan-goodrich
A new study has found that shoplifting, in combination with other factors, is the leading cause of loss for retailers nationwide. NRF Protect indicated the severity of inventory shrink in its report estimating $44 billion is lost annually, 1.38 percent of total retail sales. In addition to obtaining proper VA Business Insurance, aggressive loss prevention strategies can help to mitigate this issue.
Florida Trend reported that the study indicated shoplifting accounted for the largest part of reported shrink in 2014- 38 percent, followed by employee theft (35.4%), administrative and paperwork errors (16.5%), vendor fraud or error (6.8%) and unknown loss (6.1%).
NRF President and CEO Matthew Shay said “Retail loss prevention professionals have one of the hardest jobs in the industry-protecting their customers, employees and merchandise from the threat of harm and fraud, and the results of this survey prove the enormity of their task.” In addition, he mentioned that retailers have made improvements to better review practices and determine the best way to proactively minimize these losses.
Loss Prevention Vice President Bob Moraca of NRF dispelled the common misconceptions about the loss of retail revenue when he stated “A common misperception about shoplifting is that retailers can ‘afford’ the loss of a candy bar or a pair of jeans, but the truth is that the industry loses billions of dollars each year at the hands of callous criminals that could be put towards human capital, promotions and other necessary business operations.”
As such, retailers have had to incorporate loss in their yearly budgets, 39.4 percent of which have increased their loss prevention budgets from last year. As loss prevention professionals have prioritized the issue in recent years, fraud is a first priority concern.
“Loss prevention professionals have done a commendable job of elevating the issue of shrink and retail fraud within their own companies and with industry insiders and the public, but the battle wages on to find ways to contain further losses to their businesses,” said Dr. Richard Hollinger, lead author of the NRSS.
Managing assets and minimizing fraud are huge components of running your retail business. At Goodrich & Watson, we understand the inherent risks associated with operating shops like yours and strive to protect each risk exposure you might face along the way. To learn more about our products and services, contact us today at (888) 829-5004.