The effect of retail crime on a business

Retail is vital to the UK economy and according to the Retail Crime Survey 2013 (British Retail Consortium) the latest figures show the highest level of shop theft for over nine years. Crimes against businesses often go unreported due to frustration at slow response times or a lack of confidence in law enforcement, illustrated by the bleak fact that just one in ten shop thefts were even reported to the police last year.

Key findings of BRS Retail Crime Survey 2013

£511 m The direct cost of retail crime in 2013. Despite being marginally lower than the previous year it still remains 166% higher than six years ago
Estimated 2.7m offences across the sector There were 766,227 offences resulting in loss or damage to property last year. Extrapolation across the sector as a whole means there were an estimated 2.7m such offences against the UK retail industry
82% Customer theft accounted for 82% of all retail crime by volume – the highest level for nine years. Only one in ten offences were reported to the police
An average cost of £1,200 per incident Employee theft accounted for 5% of all retail crime by value, but 1% in terms of volume
+48% Robberies per 100 stores increased from 4.8 incidents to 7.1 incidents
Average cost of £2,067 per incident Number of burglaries fell by 49%, however the average cost per crime increased from £1,730 to £2,067
-21% Average cost per incident of criminal damage increased 114% from £962 to £2,062. Overall number of offences fell 21%
80% of retailers reported a rise in fraud Fraud accounted for 41% of the total cost of crime in 2013. The majority of the retailers reported that cyber-attacks pose a critical threat to their business. Hacking and denial of service attacks were the most serious threat in the last 12 months
38 incidents of violence and abuse per 1,000 staff There were 26 incidents per 1,000 staff of non-physical abuse or aggressive behaviour, eight incidents of violence with injury and four incidents of violence without injury per 1,000 staff
£2m per retailer Expenditure on crime and loss prevention was £521m, with an average spend of £2m per retailer

Retail in the UK

  • Almost 3 million people work in retail in the UK
  • The retail sector generates 5% of our GDP
  • There are almost 300,000 retail outlets in the UK

Retailers are at the heart of local communities and with trends in offending reaching the highest level in nine years this only demonstrates that further action needs to be taken in order to protect our shops.

Massive losses are incurred by retailers each year caused by increasingly organised thefts from stores, which impact negatively on their bottom lines.

Definitions of retail crime

Robbery: where force or threat of force is used either during or immediately prior to a theft of attempted theft.

Burglary: entry into a building on the premises without permission with intent to steal.

Criminal damage: deliberate damage or destruction of property, including arson.

Credit/debit card fraud: use of lost, stolen or counterfeit credit or debit cards or the personal information from them in order to obtain goods fraudulently. Card-not-present fraud is where neither the card nor card holder is present at the point of sale.

Account credit fraud: either an account takeover where an existing customer’s account is hijacked, or use of an individual’s identity to open a new account to make unauthorised transactions.

Refund fraud: fraudulent refunds such as denying receipt of the goods or returning different goods than those dispatched.

Voucher/gift card fraud: use of fraudulent gift vouchers to obtain goods.

Customer theft: an offence where money, goods or company property are stolen from a business premises.

Employee theft: theft of money, services or property owned by the business, committed by employees.

Violence with injury: includes assaults and robberies where physical injury was sustained.

Violence without injury: assaults or robberies where no physical injury was sustained.

Other abusive or aggressive behaviour: instances of non-physical aggressive, intimidating or abusive behaviour towards staff.

Prevention of retail crime on businesses

Crime and loss prevention forms a considerable proportion of the overall cost of retail crime in the UK. As a consequence retailers are investing heavily in loss prevention and training to protect not only their businesses but to ensure the safety of employees and customers.

Retailers are now turning towards private security measures as they need to think of new ways to protect themselves from theft, which as we saw earlier totalled £511m in losses. As such there is now an increasing demand for a range of specialist services provided by private security companies for their security solutions. Sector trained staff and loss prevention security personnel are in a position to prevent criminal activities on the shop floor and implement loss prevention methods to discourage theft, reduce shrink and promote a safer and gainful shopping environment.

As retail crime evolves, pre-empting crime is becoming necessary

The implementation of intelligence led security solutions within the retail sector can play a vital role in the prevention of imminent and potential criminal threats.

Technological advances are also being used by retailers to react to crime whilst it’s being committed. Alarms, in-store and local CCTV are helping to discourage criminals and helping retailers to allocate improved resources. There is also a need for retailers to analyse output from security systems in order to ascertain incident trending across local stores in their area.

Loss prevention processes: the basics

Retail crime prevention helps to ensure that the necessary systems and processes are in place to protect your business, the following suggestions should be considered as a priority for any retail business owner:

  • Ensure senior management is committed to a loss prevention strategy, and reinforce this to all staff.
  • Carry out a security gap analysis and crime risk assessment, this will identify any high risk areas in order to implement extra security.
  • Ensure all internal and external crime prevention systems are up to date and operating efficiently.
  • Private security firms can provide expertise across a full spectrum of security needs and offer solutions to match threats.
  • Engage with local retail crime partnerships and encourage participation with the local police force.

Source: British Retail Consortium Crime Survey 2012-2013

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