Weak global economy contributed to $112 billion loss from retail theft

High unemployment and lower wages were major contributors to an uptick in retail crime last year that cost the industry more than $112 billion worldwide, according to the latest global theft report.

[Gang exploits both physical and system security during bank robbery]

On average, losses from shoplifting, employee and supplier fraud, organized crime and administrative errors amounted to 1.4 percent of retail sales, according to the latest Global Retail Theft Barometer released Tuesday by underwriter Checkpoint Systems. Overall, the study showed that losses, called shrinkage in the retail industry, were on the rise in the 16 countries covered in the 2012 study.

Shrinkage grew a tenth of a percent on average compared to 2011. U.S. retailers reported the same increase.

In general, the weak global economy was a key contributor to the rise in shoplifting, employee theft and organized crime.

"There are a lot of families, a lot of people, with smaller budgets and they're trying to maintain the same lifestyle," Dan Reynolds, vice president of sales and customer service for Checkpoint, told CSOonline.

"For the most part, people are paying for the necessities, but anything that's high value or high resale is getting a lot of attention (by thieves)."

The most popular items were fashion accessories, jeans, footwear, lingerie, Apple products, electronic games, GPS gadgets and cases and earphones for mobile devices.

However, retailers also reported an increase in the number of criminal gangs entering stores and stealing large quantities of razor blades, baby formula, nonprescription drugs, and cosmetics, Reynolds said. The products are typically sold on the black market for as much as a 30 percent discount.

Countries with the highest shrinkage rates were Brazil and Mexico with 1.6 percent. The U.S. was close behind with 1.5 percent, which cost shoppers $300 per household. Japan had the lowest rate at 1 percent.

The study is based on phone interviews and written surveys conducted with retailers covering 160,000 stores worldwide and $1.5 trillion in sales.

Retailers agreed that there was no single loss prevention method that was 100 percent effective and no one-size-fits-all solution. Therefore, a combination of methods was seen as the most useful.

Staff training was essential to prevent theft. "Motivated and qualified employees are able to detect and deter theft, conduct rigorous checks on supplier deliveries, follow inventory and pricing procedures and are not prone to stealing themselves," the report said.

[Researcher finds major security holes in IZON surveillance camera]

Other effective methods listed by retailers included radio frequency identification (RFID) tags for tracking inventory, source tagging used to prevent in-store theft and data mining and analytics.

While spending on loss prevention was mostly flat, retailers who reported strong spending on loss prevention typically had shrinkage rates well below their respective country's average. Countries where many retailers reported a correlation between higher spending and lower theft included the U.K. and Germany.

Join the CSO newsletter!

Error: Please check your email address.

Tags security

More about Apple

Show Comments

Featured Whitepapers

Editor's Recommendations

Solution Centres

Stories by Antone Gonsalves

Latest Videos

  • 150x50

    CSO Webinar: Will your data protection strategy be enough when disaster strikes?

    Speakers: - Paul O’Connor, Engagement leader - Performance Audit Group, Victorian Auditor-General’s Office (VAGO) - Nigel Phair, Managing Director, Centre for Internet Safety - Joshua Stenhouse, Technical Evangelist, Zerto - Anthony Caruana, CSO MC & Moderator

    Play Video

  • 150x50

    CSO Webinar: The Human Factor - Your people are your biggest security weakness

    ​Speakers: David Lacey, Researcher and former CISO Royal Mail David Turner - Global Risk Management Expert Mark Guntrip - Group Manager, Email Protection, Proofpoint

    Play Video

  • 150x50

    CSO Webinar: Current ransomware defences are failing – but machine learning can drive a more proactive solution

    Speakers • Ty Miller, Director, Threat Intelligence • Mark Gregory, Leader, Network Engineering Research Group, RMIT • Jeff Lanza, Retired FBI Agent (USA) • Andy Solterbeck, VP Asia Pacific, Cylance • David Braue, CSO MC/Moderator What to expect: ​Hear from industry experts on the local and global ransomware threat landscape. Explore a new approach to dealing with ransomware using machine-learning techniques and by thinking about the problem in a fundamentally different way. Apply techniques for gathering insight into ransomware behaviour and find out what elements must go into a truly effective ransomware defence. Get a first-hand look at how ransomware actually works in practice, and how machine-learning techniques can pick up on its activities long before your employees do.

    Play Video

  • 150x50

    CSO Webinar: Get real about metadata to avoid a false sense of security

    Speakers: • Anthony Caruana – CSO MC and moderator • Ian Farquhar, Worldwide Virtual Security Team Lead, Gigamon • John Lindsay, Former CTO, iiNet • Skeeve Stevens, Futurist, Future Sumo • David Vaile - Vice chair of APF, Co-Convenor of the Cyberspace Law And Policy Community, UNSW Law Faculty This webinar covers: - A 101 on metadata - what it is and how to use it - Insight into a typical attack, what happens and what we would find when looking into the metadata - How to collect metadata, use this to detect attacks and get greater insight into how you can use this to protect your organisation - Learn how much raw data and metadata to retain and how long for - Get a reality check on how you're using your metadata and if this is enough to secure your organisation

    Play Video

  • 150x50

    CSO Webinar: How banking trojans work and how you can stop them

    CSO Webinar: How banking trojans work and how you can stop them Featuring: • John Baird, Director of Global Technology Production, Deutsche Bank • Samantha Macleod, GM Cyber Security, ME Bank • Sherrod DeGrippo, Director of Emerging Threats, Proofpoint (USA)

    Play Video

More videos

Blog Posts

Market Place