The Association of Certified Fraud Examiners (ACFE) issues an annual report which examines closely trends in occupational fraud, amongst other types of fraud. ‘Occupational fraud’ refers simply to any sort of theft or embezzlement which is conducted by an employee of an organization, in a manner which exploits their position in that organization. The term ‘occupational fraud’ covers not only someone working in the stock room regularly slipping merchandise into their personal backpack, but also “Office Space” style schemes.
What changed in the world of theft between 2012 and 2013, and what can we learn from those changes to help reduce shrink now?
The Hayes International Annual Retail Theft Survey found that a variety of changes have occurred in the retail theft world. The good news? In 2013, they found that the recovery of stolen goods and money and the number of apprehensions of thieves had increased over the previous year.
The 2013 Global Retail Theft Barometer found that American retailers spent from 0.001% to 0.2% of their revenue on loss prevention, with the average amount being 0.04% of revenue. The vast majority of retailers’ loss prevention expenditures are less than one fifth of the amount they lose to shrink — in essence, spending less than twenty cents to protect each dollar.
Remember your losses, and remember them well. This is one of the most powerful tools you can employ to reduce shrink loss. If you have a comprehensive, recorded, data-driven approach to understanding where, why, and how shrink is occurring in your stores, you will be vastly better equipped to deal with that shrink.