Overview of Retail Theft Rates in America (2024)
- Shrink Rate Increase: The average shrink rate in retail climbed to 1.6% in recent years, equating to losses of $112.1 billion.
- Small Business Impact: 85% of small businesses report annual theft, with significant monthly losses.
- Tax Revenue Loss: Retail theft leads to an estimated $14.9 billion in lost tax revenue in the U.S. annually.
- Rising Incidents in Major Cities: Notable increases in shoplifting incidents in cities like New York City and Los Angeles.
Recently, the National Retail Federation highlighted Los Angeles as the leading city for retail crime in the United States for the fifth year in a row.
This report has spurred significant action, including the NRF’s “Fight Retail Crime Day” at Capitol Hill. The event was aimed at pushing for legislative measures to address the escalating issue of organized retail crime. This focused response by the NRF underscores the growing concerns about retail theft and its broader implications ((National Retail Federation).
However, the narrative is not straightforward. The spotlight on incidents such as smash-and-grab robberies has raised questions about the actual scale of retail theft.
While organizations like the NRF and the Retail Industry Leaders Association provide key statistics, some analysts suggest the problem might be exaggerated. This perspective is crucial for understanding the diverse and complex factors driving retail crime (NPR).
Breakdown of Retail Theft Statistics in America
The rise in retail theft in America has become a pressing concern for the industry. According to the National Retail Federation’s 2023 Security Survey, the average shrink rate, (lost product inventory, primarily driven by external theft), increased to 1.6% in FY 2022, up from 1.4% in FY 2021. This Shrink represents $112.1 billion in losses as a percentage of total retail sales in 2023.
The issue of retail theft extends beyond major retailers and significantly impacts small businesses. According to a recent study, 85% of small business retailers reported experiencing theft at least once a year, with most reporting monthly losses between $500 and $2,500. This statistic reveals the prevalence of the problem across the retail sector, affecting businesses of all sizes. The majority of these retailers also noted an increase or consistency in the frequency of thefts in 2023 compared to previous years. This indicates a persistent challenge that small businesses face in safeguarding their assets.
Retail theft not only affects individual businesses but also the wider economy. It leads to an estimated $14.9 billion in lost tax revenue annually in the U.S.
State and City Analysis of Retail Theft in the US
Each state experiences unique challenges regarding retail theft. For instance, California faced losses of up to $5.23 billion due to shoplifting and retail theft, while Colorado retailers lost $1.289 billion in revenue to theft in 2022 (CapitalOneShopping).
Different states experience varying levels of impact from retail crime. For instance, Washington is identified as the state most impacted by retail crime, while Wyoming is the least impacted. This discrepancy highlights the need for region-specific strategies in combating retail theft. In Pennsylvania, the average total value of stolen goods per capita is notably high at $430, underscoring the significant economic impact in certain areas. (Forbes Advisor)
Major cities like New York City, Los Angeles, and San Francisco report high rates of shoplifting and organized retail crime. New York City alone had over 63,925 shoplifting incidents in 2022, a 45% increase compared to 2021.
New York and Los Angeles have witnessed significant increases in shoplifting, with more than a 60% surge from 2019 to 2023. This sharp rise reflects the growing challenges these cities face in curbing retail crime. Contrary to popular perceptions of San Francisco and Seattle as crime hubs, both have shown notable declines in shoplifting incidents – 5% in San Francisco and 20% in Seattle. These figures challenge the narrative and suggest that the situation in these cities is improving (Business Insider).
Types of Retail Theft in America
The U.S. saw a 26.5% increase in organized retail crime last year. Common forms of retail fraud include gift card fraud, return fraud, and payment fraud. Internal theft poses another significant challenge, with retailers losing $125.7 billion to it last year. The average value of internal theft incidents is almost three times that of external theft incidents.
The average value of internal theft incidents is almost three times that of external theft incidents, with electronics, clothing, office supplies, and food & drink being the most common categories of internal theft. (US Chamber)
The issue of internal theft is significant, with 58% of small business retailers reporting theft by current or former employees. This aspect of retail crime often gets overlooked but poses a serious internal risk. (Forbes Advisor)
Retail Loss Prevention Strategies in the U.S.
Retailers are increasingly focusing on loss prevention strategies. This includes adopting advanced technologies like RFID systems and AI analytics for asset protection. (CNBC)
The majority of small business owners (56%) prefer filing a claim with their insurance and reporting the incident to authorities (53%). This response indicates the reliance on formal mechanisms to address theft. (Forbes Advisor)
To combat theft, 98% of small business retailers have implemented anti-theft measures, such as installing security cameras and increasing prices. These strategies reflect the ongoing efforts to mitigate the impact of retail crime. (Forbes Advisor)
How Can We Help? Advanced Surveillance and Security Consulting for Retail Loss Prevention
The increasing rates of retail theft in America pose a significant challenge to retailers, affecting their bottom line and the broader economy. By adopting a multifaceted approach that includes the use of traditional and modern methods retailers can more effectively combat this growing issue.
At Privin Network, we specialize in advanced surveillance and security consulting, offering tailored solutions to combat the evolving challenges in retail loss prevention. Our team combines expert surveillance tactics with strategic security consulting, addressing both internal and external theft risks.
For a comprehensive security solution that aligns with your retail needs, reach out to the experts at Privin Network.
Our team of experienced investigators employs advanced surveillance and investigative techniques to safeguard your business against internal and external retail crime resulting in reduced theft and streamlined operational efficiency, creating a safer shopping environment for customers and staff.
Contact Privin Network today to enhance your loss prevention strategy.