Retailers look to the holiday season to substantially lift their sales; traditionally, consumer purchasing in November and December accounts for up to 40 percent of a retailer’s annual sales totals. (see November blog post)

But this year, more than ever, it is the merchandise that’s being “lifted”. Consumer theft is up a hefty 6 percent over 2010—the highest activity in five years.  Here’s what’s happening for the 2011 holidays:

  • One in eleven shoppers will “forget” to pay for at least one item
  • Shoplifting theft will total $119 billion in 2011—1.45 percent of total sales
  • 75 percent of shoplifters are adults, and most have jobs
  • Shoplifters fall into three categories:
    • “Accidental” shoplifters – random, unplanned incidents
    • Frequent  or habitual non-professional shop-lifters – stealing at random
    • Organized Retail Crime (ORC), or professional criminals—-stealing items that can be easily resold via online auction sites such as e-bay, pawn shops etc.
    • Economically-motivated shoplifters—stealing mostly food, pharmaceuticals or clothing)
  • Retail loss via profession criminals (Organized Retail Crime) averages $7,000 per shop-lifting incident
  • Non-professional retail crime accounts for about 25 percent of retail loss, but it is a significant loss factor because of the frequency

The theft of apparel has increased 31 percent in the last two years, ranking as number 7 in the list of what shop-lifters are stealing over the holidays this year. Here’s the full list of the top 10 most shoplifted items for 2011:

  1. Filet mignon & PorterhouseThe loss rate for luxury meat rose 21% between 2009 and 2011.  Supermarkets are now considered the stores with the most theft.
  2. Jameson & Bacardi – The shrinkage rate for liquor is 2.9% in North America.
  3. Electric tools – Electric toothbrushes and power tools, etc.
  4. iPhone 4 – Small, expensive electronics like smartphones and video games are high risk items. According to one research group, roughly 100,000 laptops are stolen from big box stores each year.
  5. Gillette Mach 4Read Hayes, director of the Loss Prevention Research Council, said: “In bad economic times, you’ll see more basic items stolen.”
  6. Axe – Popular men’s deodorant and body products are often stolen in large quantities, then resold at flea markets and other venues.
  7. Designer Clothing – The theft of apparel has increased 31 percent in the last two years, ranking as number 7 in the list of top ten items targeted by shop-lifters in 2011:
  8. Hot Toys— Sesame Street toys such as Let’s Rock Elmo and others on  the 2011 Toys’R’Us “Hot Toys” list are expected to be prime targets for “lift” this holiday season.
  9. Perfumes – Chanel #5 and other expensive perfumes account for nearly 4 percent of loss in stores that carry them. according to  The 2011 Global Retail Theft Barometer report, brand name perfumes are vulnerable for shoplifting because the are small in size and highly prized.
  10. Sneakers – Easy to “lift” by shoppers who wear flip-flops into a store, try on a pair of sneakers, then exit the store with the shoes on their feet.

In the retailer’s constant battle against shop-lifting, Item-level RFID is proving to be a powerful weapon to deploy.  RFID provides retailers with the highest degree of business intelligence available today; accurately identifying what’s in the store – and what has exited the store without payment.  Item-level RFID can even help deter theft, helping bolster the ROI equation for RFID deployment.

Pilots are demonstrating the effectiveness of “dual function” RFID tags that serve as both item-level identifiers anti-theft devices.  Recently, the Information Technology Research Center (ITRC) at the University of Arkansas released the results of tests conducted on RFID dual function tags in simulated shoplifting situations. Closely replicated “real world” shoplifting, the tests gauged how RFID tags compared with the read rates of traditional EAS tags when a shoplifter wore an item, shielded the item with their body, or tried to run past the surveillance point.

Both the applied and academic study of RFID functioning as an EAS show that, RFID provides 100% inventory accuracy, substantially enhancing existing EAS..  Quite simply, RFID brings item-level surveillance to a new level.

RFID gives retailers the ability to know exactly when a theft occurred and identifies the precise items that were taken. Such specific information about stolen merchandise enables retailers to replace stolen items more quickly— reducing out-of-stocks and preventing lost sales. At the same time, the Loss Intelligence (LI) provided by RFID helps retailer to spot trends in both internal and external theft more rapidly.  This can lead to better, more effective loss prevention strategies.

With RFID surveillance in place, retailers can more easily spot potential shoplifters within their stores. In the case of professional thieves who steal large quantities of goods in a single “lift”, RFID can track suspicious activities such as attempts to remove a tag or when an unusual number of a specific item exits the store—–30 Ralph Lauren sweaters at once, for instance.

With retail theft on the rise, RFID opens an entirely new direction, one that combines improved visibility, 99+% accurate inventory control and electronic article surveillance.

Dr. Richard Hollinger, a criminologist at the University of Florida and one of the leading academic experts on shoplifting, believes that the retailers who are willing to commit the most resources to fight shoplifting “will be those that have the best chance to win.“

With the current economic uncertainty affecting consumer spending, many retailers are cutting back on staff, leading to fewer sales persons

on the showroom floor. This means there are more “dead zones” – unobserved areas – providing even greater opportunities for theft.

Research shows that there is a significant correlation between reduced spending on loss prevention efforts and increased levels of retail theft.  Cutting loss prevention budgets is not the right strategic move during an economic downturn.

As Bill Hardgrave, Director of the University of Arkansas’ RFID Research Center recently observed: “If retailers got visibility into even just 75 percent of stolen items—that is, knowing what was stolen, where and when—that would make the cost of deploying the technology worth it.” In doing so, RFID could serve as significant deterrent to the “growth industry” that shoplifting has become today.”

To learn more, call Truecount for a complimentary consultation (800-403-7118), or email success@truecount.com.

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