U.S. Retail Fraud Survey Reveals Surge In Loss From Cash Theft

By Christine Kern, contributing writer

The second annual U.S. Retail Fraud Survey reports that about a quarter of all respondents (24 percent) attribute the biggest area of store loss is cash theft. It ranked second to employee theft (38 percent of respondents), with administrative and bookkeeping errors and shoplifting ranking third and fourth.

The study by Retail Knowledge and sponsored by Volumatic and Kount was based on interviews with the loss prevention and e-commerce directors or managers for each of 100 of North America’s leading retailers, regarding their systems, processes, and strategies. These retailers represent 126,000 stores.

An article from the National Retail Federation (NRF) points out theft of cash from U.S. retailers has soared by a staggering 20 percent at the same time as the number of stores using secure storage at POS dropped by 35 percent

In an article in LP magazine James Harris of Volumatic, says merchants taking cash payments “are increasingly employing intelligent cash handling systems to substantially reduce cash shrink, enhance security, streamline cash handling processes, and deliver significant operational efficiencies.”

The study found shrink totals 1.27 percent of sales, or $57 billion loss to the industry. The rate of shrink varies by retail sector, with discounts stores at 2.5 percent and specialist non-food at 0.7 percent of sales, and there is no consensus regarding measurement of shrinkage — 53 percent use cost price.

Also, most retailers address online separately from in-store losses. The largest area of online loss continues to be credit card fraud (59 percent). As a result of recent online fraud events, 37 percent of retailers report that analytics and monitoring are their biggest concerns.

The 2014 survey is not available for purchase. “The only retailers who will get to receive the report will be those who took part or agree to take part,” Mark Emmott, director of communications for Retail Knowledge says. He says the survey can benefit vendors and solutions providers “to plan future product developments and sales and marketing strategies, and to gain a better understanding of individual accounts.”