Dec. 2, 2005--The holiday shopping season means that stores have to prepare for more shoppers, more sales -- and more shoplifters. But even as more shoplifters mingle among shoppers in the aisles, shoplifting's effect on sales overall is at an all-time low.
Ted Hurlbut, whose firm Hurlbut and Associates provides retail inventory consulting to small businesses, said that shoplifting and other inventory shrinkage, including employee theft and storage errors, is falling thanks to newer technology that helps stores keep better track their inventories.
"If you can quantify it, you can measure it. If you can measure it, you can manage it, and then become much more sensitive to the impact," Hurlbut said.
In November, the FBI released its Uniform Crime Report, which showed that shoplifting reports increased 5.1 percent to 814,435 in 2004, the fourth straight yearly jump.
Indeed, shoplifting arrests and merchandise recoveries have increased each year since 2001, according to the 17th Annual Theft Retail Survey, conducted by Jack L. Hayes International, which consults with retailers on how to prevent shoplifting.
But shoplifters' impact on sales is clearly minimal. The National Retail Security Survey, released in the summer by Richard C. Hollinger, a sociology professor at the University of Florida, found that 2004 inventory shrinkage, which includes shoplifting, employee theft and inventory errors, ate into 1.54 percent of the sales of the 107 surveyed companies, the lowest rate in the 13-year history of the survey. In 2003, the shrinkage rate was 1.65 percent of sales. The rate has dropped steadily since its peak of 1.95 percent in 1995.
In fact, Daniel Butler, the National Retail Foundation's vice president for retail operations, noted that the effect of shoplifting on sales has generally decreased to the point where new, lowered benchmarks for impact have been set. Retailers' benchmark for inventory shrinkage used to be 2 percent of sales. Anything more than that was considered too high. Now, retailers consider 1 percent to be the benchmark.
Small businesses, too, may not consider shoplifting to be among their biggest problems; crime, including shoplifting and identity theft, ranked sixty-second out of 75 problems in a 2004 National Federation of Independent Business survey of 4,603 small businesses.
The National Association for Shoplifting Prevention, a non-profit group, stressed that the full extent of shoplifting may be greater than these numbers show, as some thefts go unreported and some thieves escape security and the police.
Butler said that cameras and other technology have helped protect retailers against would-be thieves.
High-tech theft prevention measures are a natural part of business for large retailers with deep resources, but smaller retailers with smaller budgets are recommended to focus on basic theft prevention techniques, such as emphasizing that its customer service staff interacts with customers, said Peter Berlin, executive director of the National Association for Shoplifting Prevention.
"If thieves can't remain conspicuous, they can't steal," Berlin said. "These people don't want customer service. They don't want people watching or helping them."