Find news and information for the executive corporate security director, CSO, facility manager and assets protection manager on issues of policy, products, incidents, risk management, threat assessments and preparedness.
Issue link: http://sdi.epubxp.com/i/703941
14 Security Dealer & Integrator / www.SecurityInfoWatch.com July 2016 For the second consecutive year, loss prevention executives report that retail shrink levels remain at historically low levels. According to the 2016 National Retail Security Survey, conducted by the University of Florida in partnership with the National Retail Federation, while losses from shrink increased from $44 billion in 2014 to $45.2 billion last year, inventory shrink as a percent- age of retail sales actually remained the same as the year before. At 1.38 percent, they are the two lowest shrink percentages recorded in the survey's 25-year history. Dr. Richard Hollinger, criminology professor at the University of Florida and lead author of the NRSS, says that despite the proliferation of organized retail crime gangs and the persistent threat that retailers face from dishon- est employees, the survey's shrinkage rates have actually been dropping for a number of years. "Given what we have been finding out about organized retail crime, I thought the shrinkage rate would bottom out at 1.38 like it did last year and then start to slowly climb — mainly because of the growth of organized retail crime," Hollinger says. Interestingly, the study found that retailers reporting the highest lev- els of shrink — 2 percent or greater — increased from just over 17 per- cent in 2014 to nearly 19 percent in 2015; however, the number of retailers reporting shrink levels of less 1 percent also grew from about 34 percent to more than 40 percent. "ere are a number of different hypotheses here, but I really thought something in the 1.3s was about as low as it would get," Hollinger says. "To see it happen again was a pleasant surprise." For the second year in a row, shopliing/external the (including ORC) accounted for a greater percentage of inventory shrink (39 percent) than did employee/internal the (36 percent). Last year marked the first time in the survey's history that retailers incurred more losses due to shopliing than internal the. Loss prevention executives reported a decrease in the average loss from a dishonest employee cases, from more than $1,500 in 2014 down to barely more than $1,200 last year. And while the number of employee apprehen- sions increased, prosecutions, termina- tions and civil demands for these types of internal incidents dropped. Although the retail industry has been among the early adopters of next-generation video surveillance and other security devices, the sur- vey found that some advanced tech- nologies, such as facial recognition, have failed to gain much traction. Even tried-and-true technologies like RFID merchandise tags have experi- enced waning support. e number of retailers who reported using RFID tags in 2015 dropped from more than 16 percent in 2014 to less than 8 percent. Hollinger believes the controversial nature of facial recognition technology made many retailers wary to imple- ment it in stores. "ey already had the bandwidth, and they were retrofitting all of their stores with digital cameras," Hollinger explains. "But the idea of everybody's picture being taken while they're checking out was a little bit more than the retail industry wanted to try and explain to the public." Despite the fact that the overall shrink rate is trending in the right direction, Hollinger says everyone should remain concerned about the increasing sophistication of ORC gangs and the potential they could have on shrink in the years to come. "ey are not just domestic shopliers anymore," Hollinger says. "e merchandise is ending up in foreign countries, the money is ending up in foreign countries and is being used not just to fund criminal activity but terrorist activity." ■ Retail Shrink Rates at Record-Low Levels Losses from shoplifting top employee theft for second consecutive year Security Watch BY JOEL GRIFFIN, EDITOR, SECURITYINFOWATCH.COM » Read more on this survey at www.securityinfowatch.com/12222111. For the second year in a row, shoplifting/ external theft (including ORC) accounted for a greater percentage of inventory shrink (39 percent) than did employee/internal theft (36 percent).