Frequently asked questions aboutthe 2000 National Retail Security Survey
by Richard C. Hollinger, Ph.D.(author of the survey)
Q: What is the National Retail Security Survey?
A: A national survey of the 200 largest retail chain’s losses dueto crime.
Q: How often is it conducted?
A: Annually (except for 1999 when I was on sabbatical)
Q: What does it measure?
A: The principal measure of retail loss is called "inventory shrinkage."
Q: What is Inventory Shrinkage?
A: Inventory shrinkage is the amount of shortage that retailers experiencewhen they compare their sales receipts to the merchandise left remainingon their shelves at the end of the day. The value of the missing merchandise(at retail) that they have not sold is shrinkage.
Q: What is the level of Shrinkage reported this past year (1999)?
A: 1.69% of sales
Q: How does this past year’s shrinkage % compare to previous years?
A: It is down slightly from 1.72% (1998 NRSS - last study conducted).
Q: What does this small percentage (i.e., 1.69%) equal in dollars lost?
A: The retail sector studied accounts for approximately $1.75 Trilliondollars in sales annually. 1.69% of this equals a total of $29.5 billionin losses.
Q: What are the principal sources of loss that contribute to inventoryshrinkage?
A: The proportions of the inventory shrinkage "pie" can be divided as follows:
- Employee theft = 44.5%
- Shoplifting = 32.7%
- Administrative and paperwork error = 17.5%
- Vendor fraud = 5.1%
Q: How do these percentages compare to previous years?
A: Comparisons are:- Shoplifting is down slightly
- Vendor fraud is down slightly
- Administrative and paperwork error is about the same
- Employee theft is up almost 2 percent.
Q: To what do attribute the increase in employee dishonesty?
A: Unemployment rates are at a thirty year low. In this tight labor marketretailers are hiring people to be sales associates this year that in previousyears they might not have selected. In other words, the tight labor marketis allowing more dishonest and uncommitted persons to enter the retailworkplace.
Q: What does shoplifting and employee theft cost the retail consumerannually?
A: Shoplifting costs approximately $9.7 Billion and employee theftcosts 13.2 Billion (When added together SL and ET constitute the two largestsources of property crime committed annually in the US.)
Q: What is the amount of merchandise taken average by the typical shoplifter?
A: $128.00
Q: What is the amount of financial loss caused by the typical dishonestemployee?
A: $1,023.00
Q: What can retailers do to deter shoplifters?
A: They can:- Good customer service
- EAS tags on merchandise
- CCTV cameras in plain view
Q: What can retailers do to deter employee theft?
A: They can:- Video surveillance of sales associates, especially those working atcash registers
- Systematic background screening of job applicants
- Pay higher wages to hire and retain more dedicated employees
- Improve job satisfaction levels of retail sales associates
To learn more, you may contact us by telephone (203.264.6802) or via email.
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