Stores keeping closer tabs on theft by employees

Survey finds firms lose more inventory from insiders

? High-profile shoplifting cases like Winona Ryder’s Beverly Hills shopping spree last year and local cases of security guard assaults on suspected shoplifters give the impression that retail theft is an outside job.

But a recent survey shows retailers lose more inventory from employees than they do from shoplifters.

Total inventory losses are $53.6 billion a year, according to a survey of 118 national retailers released this year by the University of Florida. Of that, 48 percent was attributed to employee theft, 32 percent to shoplifting and 20 percent to administrative errors and vendor fraud.

The problem peaks during the holiday shopping season as retailers ring up about a third of their annual sales. Thieves thrive in large crowds with the less-experienced, largely part-time work force at many stores.

And retailers often pass the cost of inventory losses on to consumers. The survey found that the average family of four will pay more than $400 in higher prices at the register this season to offset the inventory losses, known as shrink.

“That is the single largest form of larceny in the world. Bar none. Retail theft trumps them all,” said Richard Hollinger, director of the National Retail Security Survey and a sociology professor at the University of Florida. He said retail theft outranks motor vehicle theft, bank robbery and household burglary combined as the nation’s largest form of property theft.

The price tag is enormous for an industry in which slim profit margins are the norm. It is estimated inventory shrink represents an average of 1.7 percent of retail sales. A loss that large could mean the difference between profit and loss for many retailers if they can’t raise prices because of competitive pressures.

Retailers have focused more prevention loss resources on tracking and trying to prevent employee theft in the past five years as technology has improved, retail security experts say.

Hollinger said retailers have always been worried about employees stealing. Before it was illegal, they used polygraph tests as a pre-employment screening technique, he said. Now, retailers use a variety of screens including multiple interviews, drug screening, criminal background checks and credit checks.