Calculate the Cost of Shoplifting and Employee Theft

Shoplifting and Employee theft will cost you as a retailer a great deal in lost profits and everyone pays for this crime. Retailers suffer lower profits and consumers ultimately pay higher prices. Some stores charge up to 7 cents per dollar to cover retail losses but this could pose a major problem as this action will make a business less competitive.




Many retail business are often unaware of the impact of retail loss on there business,  in terms of profits walking out their door. Although the cost of loss will vary depending on many factors here is a simple basic formula which applies to virtually every single retail outlet from the mom and pop stores to the large retail chains.

So let’s break it down a bit further and examine the actual Cost of Shoplifting to both the retailer as well as the consumer.

Formula for calculating total annual Retail Losses

 

Estimate your businesses gross yearly sales, then multiply this figure by a value of 1%. Repeat this calculation again but this time take your gross yearly sales and multiply it by 8%. (It should be noted that some retail loss levels will be slightly lower and others will be higher.)

 

 

Example 1: $1,000,000 (yearly gross sales) X 1% = $10,000 (retail loss)

This example represents a business with strict inventory control, ongoing staff loss prevention training and a combination of security systems and strategies.

 

 

Example 2 : $1,000,000 (yearly gross sales) X 8% = $80,000 (retail loss)

This example represents a company with little or no anti-loss policies.

Generally most retail businesses yearly losses are somewhere between the two example figures of 1% and 8 % and although your yearly gross sales will vary the percentage figures will remain constant.
 
 

Is Shoplifting a Victimless Crime?

 

Although at times there is a notion that shoplifting and internal theft is a victimless crime, this is in fact not true. Everyone, except the thief pays as it is estimated that every consumer in the US and Canada pay's a minimum of $250 each year because of these crimes against merchants.

Theft of a $2.00 item from a store operating on a 10% profit margin requires the sale of $20.00 in merchandise to make up for the loss. Supermarkets and other retailers operating on low margins of 1% must sell $500.00 in merchandise, just to cover the Cost of a $5.00 stolen item. It's easy to see how out-of-control Shoplifting can quickly threaten the viability of a business.

The Cost of Shoplifting is high, having doubled since the year 2000 and is expected to continue to skyrocket. Retailers need to re-examine their level of security and should begin to take a more proactive role in the battle against retail theft. Most retail loss experts agree that in order to be successful there needs to be a combination of anti-theft devices combined with good staff training in the prevention of retail shrinkage.

Biography

 After losing a business to shoplifting and two years later being a victim to a shoplifting assault FJ Tarasoff made a commitment that he would help retailers protect their assets as well as the safety of all staff members. Twenty years later, Tarasoff is a leading authority in retail loss prevention, he conducts training workshops on various loss prevention techniques, including shoplifting and intenal theft and is the developer of “The Shoplifting Prevention Program” an affordable online training program. He has also been interviewed by numerous media outlets including, The CBC, The Globe and Mail, Small Business report, Hardware Magazine, Grocer Magazine, GlobeandMail.Com, Canadian Retailer and is a member of Retail Loss Prevention professionals Group, Security and Loss Prevention for Retail Industry and the UK Loss Prevention Group.

For more information go to http://www.shopliftprevention.com

or email: info@shopliftprevention.com