Crime continues to undermine growth and profits. That is according to a retail association that’s released its annual retail crime survey.
The British Retail Consortium (BRC) survey found shop theft at a nine-year high. Most retailers say that they are suffering more fraud. Helen Dickinson, director-general of the BRC, said: “Although the direct cost of crime against retailers is down from the peak of 2010-11, it remains more than double that of six years ago.
“The retailers I speak to remain frustrated by the service they sometimes receive from law enforcement. A lack of confidence in the police drives the chronic under-reporting of offences by businesses, illustrated by the stark fact that just one in ten shop thefts were reported to the police last year.”
She stressed the need for a single, national definition for business crime by police, ‘so that it can be properly measured, analysed and addressed. We cannot fight it effectively until the true scale of the problem is understood.’
ACPO, as Helen Dickinson acknowledged, are working towards such a definition, as featured in the November 2013 print issue of Professional Security.
She called also for a ‘step change in the capacity of law enforcement to deal with fraud, from the reporting process through to prosecution’. She added that law enforcers are simply not keeping pace with the scale of fraud.
She welcomed the Government’s new strategy to fight serious and organised crime; and the new code of practice for victims of crime, published by the Ministry of Justice. She also welcomed the developing business crime strategy for London, as featured in the December 2013 and February 2014 issues of Professional Security; and would like to see the approach repeated elsewhere.
Of interest to loss prevention and security service suppliers, according to the survey spending on crime and loss prevention was £521m in the year 2012-3. Some 30 mainly chain retailers did the survey, who make up half (51pc) of the UK retail sector by turnover.
The direct cost of crime to retailers was £511m, lower than the previous survey total of £541m, but 166 per cent higher than in 2007-08. Most of the loss is said to be due to theft by customers, and fraud. Retailers estimated that a quarter of customer thefts went undetected. As for e-crime – most fraud is done online – the survey said that the most critical cyber-attacks were hackings and denials of service. As for types of fraud, credit and debit card fraud cost the most, followed by account credit fraud and refund fraud; and a slight amount of fraud using vouchers or gift cards. As for what tools retailers use to combat online fraud, most widely used is 3D Secure, followed by third party screening, CVV2 and in-house screening.
Violence against staff
The BRC spoke of an unacceptable level of violence and abuse against staff. It happens mostly when staff challenge customers suspected of theft, when asking for proof of age, dealing with a customer who’s already been banned from a store, or if customers are being detained on suspicion of shoplifting.
Robbery
The survey found an average of 7.1 robberies for every 100 stores in 2012-13, a rise of 48pc compared with the previous year. This is below the peak of 2008-9, and the average cost of a robbery has more than halved compared with the previous year, from £3005 to £1316. The association suggested that security measures such as secure cash handling are having an effect so that even if robbers do get away with money, they gain less. Again, retailers did not bother to report many burglaries or thefts by staff. While retailers report far fewer cases of theft by employee the average theft costs the employer almost seven times the average customer theft.
Other findings
The survey found that in 2012-13:
– Retailers suffered the highest level of theft for nine years. There were 631,391 incidents of customer theft reported in 2012-13 and thefts per 100 stores increased 5 per cent on 2011-12.
– The average value of each incident of customer theft increased by 62 per cent; a key factor driving this is thought to be the impact of organised crime gangs, who are systematically targeting higher-value items: such as, branded electrical goods, handbags and power tools. The BRC suggests that groups are travelling further to do crime and bulk theft of designer goods, to order, is becoming more common.
– Retailers reported only one in ten (9 per cent) of customer theft offences to the police.
– Fraud increased by 15 per cent in 2012-13 and accounted for 41 per cent of the total cost of retail crime.
– It is estimated there were 2.7m offences in 2012-13 against retailers, directly adding £511m to retailers’ costs, based on the total of 766,227 offences reported by BRC members that took part in the survey.
– Burglaries fell by 49 per cent compared to last year (which may well have been unusually high due to the August 2011 riots around England). Despite the number of burglaries falling, the cost of each incident rose from £1,730 to £2,067.
– The average cost per incident of criminal damage more than doubled, rising by 114 per cent in 2012-13, from £962 to £2,062.
You can read the full 33-page survey at – http://www.brc.org.uk/brc_show_document.asp?id=4428&moid=8064
Supplier comment
Paul Bland, Divisional Director-Retail at The Shield Group, said: “We have found retailers are spending more on private security measures now than they have in the past as they need to think of new ways to protect themselves from theft which last year cost UK retailers over £511m in losses. The implementation of intelligence-led security solutions across retail communities will play a vital role in preventing imminent and potential criminal threats. As retail crime evolves, we believe it is more necessary than ever to use these measures to anticipate and pre-empt crime by sourcing, analysing and exploiting timely intelligence.
“The Shield Group is seeing a large increase in active cooperation between individual retailers, private security firms, community groups and the police. The volume of information now shared results in a ‘constant chatter’ between these entities, discussing subject matter such as movements of known shoplifters, real-time notification of thefts and new theft techniques, as well prominent prosecutions.”
“Technological advances are helping many retailers react to crime while it is being committed. Alarms, in-store and local CCTV and other technological advances are discouraging criminals and helping security managers better allocate human resources. Private security companies such as The Shield Group are now offering a Total Security Solutions (TSS) model, allowing them to focus solely on securing their clients’ premises, employees and customers. This innovative model has proven a success with many retailers across the nation, leaving them to focus on serving their customers better.”
Police comment
For the Association of Chief Police Officers (ACPO), national lead for business crime is Nottinghamshire Deputy Chief Constable Sue Fish. She said: “We have seen an increase in recorded shop theft, which is partly down to increased confidence in the police response and more businesses reporting theft. There are a number of other factors at play: businesses have increased pressure to show profitability so report more losses, we are seeing people choosing to shoplift to maintain their previous lifestyle on diminishing budgets and police forces are proactively targeting shoplifters.
“Working with businesses to make it more difficult for criminals to target them is the only way we will reduce this type of crime. Businesses and retailers recognise the need for drastic change. We have agreed together to focus on getting the basics right: developing a national definition of business crime and corresponding standards, and making shop watch and partnership groups more effective.
“Police and businesses sharing information increases our ability to prevent and detect organised business crime. I want to encourage businesses to share information with us so that we can continue to improve our collective response.”
