Retail fraud in the UK has been estimated at £5 billion a year from a survey of 100 retailers.
Paul Bessant of the Retail Fraud event organisers gave details of the fourth annual retail fraud survey. It found the overall shrinkage was 1.1 per cent, a rise from 0.9 per cent the previous year. Department stores see much more than average loss, home shopping firms much less. A hint that true losses may be greater than retailers are willing to admit came in one unnamed high-end department store giving its loss of 11pc one year; that retailer no longer takes part in the survey. Store loss – that is, by customers – as the biggest area of loss, followed by theft or fraud by employees.
Online
As for online retail, the largest loss was fraudulent use of plastic cards, followed by third party fraud payment. Online retailers admitted that even detecting fraud online was difficult; for instance, a retailer may not realise fraud is likely at an address until 100 iPads have been sent there, paid for by a cloned credit card. Spend on shrinkage is shifting from in-store to online, but overall spend on loss prevention is holding. In the latest survey, return fraud had shot up, but Bessant suggested that was due to more retailers managing such fraud. In other details, about half of a loss prevention team worked in store, and half at head office. Manned guarding was used by 65 per cent of retailers, but rarely in all stores. (In a separate talk, Mick Phipps of Wilkinsons said that his 370 stores had some 300 guards.) A fair number – 22pc – of retailers had guards in less than a tenth of stores. Use of guards has reportedly risen in the last four years, guards typically being moved between stores depending on where a retailer has a problem.
For more about the survey and to buy a copy visit http://www.retailfraud.com/survey/
– Retailers and ATM firms need to be ready for the change to polymer £5 and £10 notes, Victoria Cleland of the Bank of England told the April 2 event at the Novotel West London at Hammersmith, pictured.
The next Retail Fraud event in the UK – others are going ahead in 2014 in Dublin, Cape Town and Dubai – is at Leicester on October 9, with a dinner and awards evening the night before. Visit http://www.retailfraud.com/retail-fraud-show/
