Tougher economic times mean higher shrinkage rates for retailers, but technology is making it easier to minimise loss.

There’s no question about it - shop theft is on the rise.

It’s long been known that as the economy slows and things get tighter, retail thefts increase, but what did this mean for Australia, which by and large was less affected by the global financial crisis than the rest of the world?

According to Checkpoint System’s annual Global Retail Theft Barometer (GRTB) retail theft or shrinkage increased by 5.6 per cent in Australia between July 2008 and June 2009 to $2.75 billion, with the most stolen items being apparel, cosmetics and hardware.

Globally, retail theft cost the industry $143.32 billion, growing 5.9 per cent. Considering Australia’s emergence from the economic downturn relatively quickly and unscathed, the increase is significant.

Australia ranks 12th overall in the GRTB’s list of countries with the highest shrinkage rates, with the highest rates found in India, Morocco and Mexico, and the lowest in Hong Kong, Taiwan and Austria.

During the survey period, around 35 per cent of losses came from external shrinkage such as shop lifting, with the remainder made up of internal losses including internal errors, employee theft and supply chain discrepancies.
Mark Gentle, MD of Checkpoint Systems, said one of the results from the global financial crisis was a change in the demographics of thieves.

“One of the big things that came from the GRTB was the change in who was stealing things. Rather than the lower demographics, it was people who were used to having the finer things in life, so we saw increases in apparel and that was more white collar workers than blue collar,” he said.

A key trend to have emerged in the past 12 months in terms of retail security has been the increased rate of fraud and theft in the ecommerce and electronic payments arena. While many businesses can get caught up in the protection of their physical business assets, retail security in cyber space is a critical concern facing many retailers.

Phil Brown, ADT Security national retail manager, said intellectual property was increasingly under threat.

“Companies need to be vigilant when it comes to protecting their brand equity. Some brands have found copies of their products available on eBay for example. Retailers need to understand how those counterfeit products get to eBay and what to do about it to protect their investments.”

The Retail Alert Group has issued a call on its website for retailers to come forward with evidence of their brand being sold illegally on eBay.

“To make sure that these items are not just overstocked ranges being cleared by the supplier on eBay, we are asking our Australian and New Zealand retailer readers to provide any evidence of their products being sold on eBay as a result of shop lifting and shop stealing,” the Retail Alert Group website says.