Welcome to the Grocery Trader’s Fraud & Loss Prevention feature, part of our commitment to coverage of retail IT-related topics.
Fraud & Loss Prevention continues to be a major concern for UK retailers, with the biggest threat on the inside. Taking 2011 over 2010, increases were seen in both shoplifting and employee theft, while organised retail crime, defined as large-scale fraud and theft for resale, was perceived as a significant contributor to losses for the first time.
According to the Global Retail Theft Barometer 2011, published by the Centre for Retail Research in Nottingham and funded by Checkpoint Systems, retail shrinkage rose in 2011 to 1.37% of sales, putting UK retailers in the same position as 2009.
Last year’s figures were of course made worse by the August riots, but that shouldn’t distract from the continuing massive size of the internal threat. The report revealed the average amount stolen by shoplifters was £81.90, while dishonest employees took an average of £1,341 per head.
The costs of retail crime were £4,401m of direct crime losses, up from £3,863m in 2010. Add £1,019m of loss prevention costs, against £977m in 2010, and the total is £5,429m. Within these totals customer theft is valued at £2,146m, employee theft £1,765m, card fraud £120m and security and loss prevention £1,019m.
Meanwhile credit card fraud numbers have revealed a drop in this type of crime, with resellers praised for their vigilance in fighting criminals. Although the latest figures from the banking and card payments industry show that credit, debit card and online banking fraud has dropped there has been a rise in losses in cheque and telephone banking transactions, which are not protected to the same degree.
Losses on UK bank cards fell by 7% between 2011 and the previous year to £341m, with efforts by firms to sign up to protection schemes including Verified by Visa as one tool that has countered the fraudsters along with greater awareness by both resellers and consumers around the potential risks.
According to Melanie Johnson, chair of The UK Cards Association, fighting fraud continues to be a priority and is making a difference. This is the third year card fraud losses have fallen – clear proof that industry efforts to fight fraud are packing a punch. Consumers have also played their part in driving down losses by heeding advice about looking after their personal and financial details.
The Grocery Trader
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