Employees are walking out the front door with retailers’ profits
What’s one percent off the top-line to a retailer? If you’re Wal-Mart (and so few of us are), 1% is somewhere in the neighborhood of $3 billion, and it turns out that’s around what the retail supergiant will lose this year as a result of shoplifting and - increasingly - employee fraud. Wal-Mart is notoriously secretive about their losses, but recent analysis suggests that the $3 billion mark is accurate and that it’s an increase from last year (according to the AP’s Anne D’Innocenzio and Marcus Kabel).
Several analysts attribute the increase to Wal-Mart’s decision last year to not prosecute minor shoplifting cases, choosing instead to focus on organized shoplifting rings and employee fraud. In fact, those two - organized shoplifters and employee fraud - often go hand-in-hand since the former regularly depends on the latter. Combined, they cost the entire retail industry roughly $41.6 billion last year, according to a joint study by the National Retail Federation and the University of Florida (from BloggingStocks.com).
The BloggingStocks article goes on to say that “employees stole about 47% of the dollars and customers swiped about 32%.” The problem has become so serious that
“the NRF and the Retail Industry Leaders Association teamed up with the Federal Bureau of Investigation to launch a central database designed to track and share data on organized shoplifting to help law enforcement spot and stop such crimes” (from BNet.com)
And that database isn’t one of the three FBI databases we wrote about yesterday. Still, the FBI evidently thinks that employee fraud and theft is significant enough to maintain a dedicated data store, and it did cost retailers around $19.5 billion last year alone.
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