In recent months, retailers have had to cope with a sour economy, wavering consumer confidence and poor holiday sales. Yet they have also dealt with one traditional loss that has remained constant over the years retail fraud.
“It doesn”t change. It”s a cost of doing business in retail,” said Ed Davidson, owner of Bivouac, on South State Street. “The expense is there with the rent, wages and electrical bills. The goal is to minimize it.”
But this practice shows no signs of abating anytime soon. In a survey conducted by the University of Florida, retail “shrinkage” as shoplifting is commonly referred to in the business world was shown to have caused losses exceeding $27 billion in 1999, the last year for which figures are available.
Richard Hollinger, director of the University of Florida”s National Retail Security Survey, said the rate of shrinkage, as a percentage of total sales, has hovered about two percent for much of the past decade.
But in recent years, it has decreased “largely due to the success of anti-shoplifting technologies. Also, stores have done a much better job of tracking inventory,” he said.
He noted that a great deal of shrinkage “is the result of disgruntled employees,” who were responsible for about 46 percent of the last survey”s recorded losses. The average loss for apparel stores per incident of employee theft was $1,078.13. In contrast, the average loss per shoplifter was $222.67.
“Shoplifting is actually easier to deter,” Hollinger said. “Customers can be scared off by cameras. But employees know how the security measures work.”
Discussing security measures is taboo for almost all retailers. None of the 10 Ann Arbor store managers spoken to regarding this subject would consent to discuss it.
Davidson said shoplifting is “human nature. We”ve caught shoplifters who are parents of students. It really runs the gamut.”
Popular targets for shoplifters include electronic goods, such as CDs and DVDs, said Hollinger, because they are easier to steal and sell for a profit. “They are less likely to be tagged and the price break point is not that high,” he added.
Rich Kinsey, detective sergeant at the Ann Arbor Police Department, said he receives many reports each week of retail fraud from local retailers.
“We”re not as high as some urban areas, but it occurs,” he said, adding that reports can come from any type of store, be it a drug store or a high-end department store.
Ida Hendrix, general manager of Briarwood Mall, said she shared the same sentiment.
“We are on the low end of the scale,” she said. “We will get some fraud. I won”t say it doesn”t occur.”
Hendrix said the mall tries to keep a high profile of its security measures and that security frequently meets with merchants to discuss new developments in shoplifting.
Hollinger noted that people “need to realize that security is there not just to harass them, but to save them money. The only way a retailer can get money back (from shrinkage) is to increase prices.”