Study Finds Internal Theft Biggest Issue

Aug 7, 2007 4:09 PM

           

Most major retailers perceive wrongly that shrink is a bigger problem for their competitors than for their own organizations, according to a new research report by the Loss Prevention Research Council, sponsored by IntelliVid.

According to the study of more than 100 major U.S. retailers, only 10 percent characterized their shrink as high compared to their competitors, while 65.5 percent said it was average. Twenty-four and half percent said their annual shrinkage was lower than average. One reason for this misperception may be there is no agreed-upon shrink measurement method, according to the survey.

While 42.9 percent of respondents said their companies measure shrink "at cost," some 57.1 percent reported their companies measure shrink "at retail price." The differences exist within and between retail segments.

According to Dr. Read Hayes, director of the Loss Prevention Research Council, "Our research indicates retailers often believe shrink isn't a serious problem for them. But, it's a major issue that retailers measure their shrink differently. They use so many different minute calculations regarding product pricing and distribution center levels. And if you compare apples to oranges, you are likely to obtain illogical results. That's why our research team strongly encourages retailers to standardize how they really measure shrink, preferably using the retail method."

In addition, the report found 86 percent of study respondents said they spend the most or second-most time working on loss problems related to internal product theft. Some 62 percent said they spend the most or second-most time working on loss problems related to internal cash theft. And 32 percent said that they spend the most or second-most time working on external theft, including organized retail crime.

"The study points to the fact that anti-shrink solution providers should continue to help retailers address external shrink threats such as organized retail crime, while assisting them in using technology to combat internal sources," says Patrick Sobalvarro, president and CEO of IntelliVid.

IntelliVid is a provider of intelligent video analysis software for retail loss prevention. "Other studies confirm the extent of the internal theft problem, and in this regard, retailers are correctly applying resources toward internal product theft," Sobalvarro says.

In addition to these findings, the 20-question study also looked at other issues, including the use of loss prevention technologies. While all respondents said their organizations have digital recording systems, just over 21.4 percent of these respondents say in-store personnel monitor CCTV cameras continuously. More than 21.4 percent of those with CCTV systems say in-store personnel rarely monitor cameras.

Importantly, 65.5 percent of respondents think implementing new technology is very important for their companies' loss prevention endeavors.

The loss prevention survey targeted a sample of 107 major U.S. retailers selected from mass merchants, department stores, pharmacy/drug stores, apparel, grocery and specialty stores (books, auto parts, home technology and others). The project was conducted by the Loss Prevention Research Council under the direction of Dr. Michael J. Scicchitano, Dr. Tracy L. Johns and Dr. Read Hayes, all researchers associated with the University of Florida.

A summary copy of the report is available here.

Want to use this article? Click here for options!
© 2008 Penton Media Inc.

SUBSCRIBE

Select an Issue April 1, 2008 March 1, 2008 February 1, 2008 January 1, 2008 December 1, 2007 November 1, 2007 October 1, 2007 September 1, 2007 August 1, 2007 July 1, 2007 June 1, 2007 IP Security Supplement May 1, 2007 April 1, 2007 March 1, 2007 February 1, 2007 January 1, 2007 School Security December 1, 2006 November 1, 2006 October 1, 2006 September 1, 2006 August 1, 2006 July 1, 2006 June 1, 2006 May 1, 2006 April 1, 2006 March 1, 2006 February 1, 2006 January 1, 2006 December 1, 2005 November 1, 2005 October 1, 2005 September 1, 2005 August 1, 2005 July 1, 2005 June 1, 2005 May 1, 2005 April 1, 2005 March 1, 2005 February 1, 2005 January 1, 2005 December 1, 2004 November 1, 2004 October 1, 2004 September 1, 2004 August 1, 2004 July 1, 2004 July 1, 2004 June 1, 2004 May 1, 2004 April 1, 2004 March 1, 2004 February 1, 2004 January 1, 2004 December 1, 2003 November 1, 2003 October 1, 2003 September 1, 2003 August 1, 2003 July 1, 2003 June 1, 2003 May 1, 2003 April 1, 2003 March 1, 2003 February 1, 2003 January 1, 2003 December 1, 2002 November 1, 2002 October 1, 2002 September 1, 2002 August 1, 2002 July 1, 2002 June 1, 2002 May 1, 2002 April 1, 2002 March 1, 2002 February 1, 2002 January 1, 2002 December 1, 2001 November 1, 2001 October 1, 2001 September 1, 2001 August 1, 2001 July 1, 2001 June 1, 2001 May 1, 2001 April 1, 2001 March 1, 2001 February 1, 2001 January 1, 2001 December 1, 2000 November 1, 2000 October 1, 2000 September 1, 2000 August 1, 2000 July 1, 2000 June 1, 2000 May 1, 2000 April 1, 2000 March 1, 2000 February 1, 2000 January 1, 2000 December 1, 1999 November 1, 1999 October 1, 1999 September 1, 1999 August 1, 1999 July 1, 1999 June 1, 1999 May 1, 1999 April 1, 1999 March 1, 1999 February 1, 1999 January 1, 1999 December 1, 1998 November 1, 1998 October 1, 1998 September 1, 1998 August 1, 1998 July 1, 1998 June 1, 1998 May 1, 1998 April 1, 1998 March 1, 1998 February 1, 1998 January 1, 1998 December 1, 1997 November 1, 1997 October 1, 1997 September 1, 1997 August 1, 1997 July 1, 1997 June 1, 1997 May 1, 1997 April 1, 1997 March 1, 1997 February 1, 1997 January 1, 1997

This month in Access Control

• Opening Up About Door Closers
• An Enterprise Approach
• The Framework For Open Systems
• On A Higher Plane
• More from April's issue