Retail theft costs retailers – and households - billions.

Retail theft costs businesses billions –and costs each Australian household hundreds. The ARA calls for Ministers to support bag check guidelines.

According to research released by the Global Retail Theft Barometer, theft of goods – termed as “shrinkage” – costs retailers around US$123 billion globally each year. The main sources of shrinkage are shoplifting (38%), employee theft (39%) and administration/non-crime losses (16%).

In Australia, it is estimated that shrinkage costs the average Australian household more than $420 per year. That’s money that’s better off in your own pocket.

In the six weeks to Christmas alone, the Australian Retailers Association (ARA) Executive Director, Russell Zimmermam estimated that theft would cost retailers around $1.4 billion – or three percent of the predicted Christmas spend.

“Theft is a serious problem for retailers, accounting for around three percent of all retail spend,” said ARA Mr Zimmerman.

“Christmas is a prime time for thieves, because with more people in shops it allows more opportunity to slip under the radar unseen. Despite new and sophisticated technologies aimed at stopping these criminals, thieves are also becoming smarter and employing their own advances techniques to commit crimes,” he said.

Canstar caught up with Mr Zimmerman for a quick Q&A on retail theft and prevention measures.

Q: Theft appears to be on the rise. Are there any factors driving an increase?

A: Theft rises and falls marginally as the economy is stronger or weaker. If times are tough and people are feeling ‘the pinch’, theft generally increases. The types of products that are stolen change as the economy slows. As an example, baby food theft increases when the consumer is finding the economy difficult. Generally, supermarkets are hit harder in a difficult trading environment.

Q: Three percent is a significant margin of loss for hardworking retailers. Does the margin vary greatly between types of retailers or size of retailers?

A: 3% is the average across all retail. Smaller retailers tend to have a closer contact with their customers, and provide more personalised service, so theft is lower in smaller retail stores – particular if the owner is working on the floor of the business.

Larger retailers and department stores tend to put in security systems such as cameras, and security tags, both RFID as well as dye tags  (in clothing stores), to eliminate as much theft as possible. It is now possible to get a price that has an RFID aerial embedded. These are almost undetectable and will help eliminate theft.

Q: Bag checks, from my personal observation, are not often employed. Is this something that businesses should perhaps encourage staff to conduct routinely?

A: As far as the ARA is aware, the only state in Australia that supports bag check guidelines is NSW. The ARA would like to see Fair Trading Ministers and departments support Bag Check Guidelines on a national scale to assist retailers in enforcing bag checks in stores. A retailer can use the guidelines as a condition of entry into the store, however, the difficulty is enforcing the guidelines.

Q: Do you have any other tips for small business, in particular, to help prevent theft?

A: The ARA’s tips are to train staff in retail theft and what to do if retail theft is occur, and to have sufficient staff instore to ensure they are not vulnerable to shop lifters. Finally, when employing staff, check previous employers, as shop theft often be the work of store staff.

Founded in 1903, the Australian Retailers Association (ARA) is the retail industry’s peak representative body representing Australia’s $284 billion sector, which employs more than 1.2 million people. The ARA works to ensure retail success by informing, protecting, advocating, educating and saving money for its 5,000 independent and national retail members throughout Australia. For more information, visit www.retail.org.au