NEWS ROUND-UP
Retail Fraud 2014 event attracts record attendance
The Retail Fraud Survey for 2014 was launched at the event which highlighted that shrink is costing the UK retail industry a staggering £5.03bn.
Sponsored by Kount, the Retail Knowledge-backed report claims that shrink levels have increased by over 22.2% in 2014, rising from 0.9% of sales last year to 1.1% this year. Other figures show that the major area of online loss remains, overwhelmingly, from the fraudulent use of credit cards (43%), followed again by third party fraud payment (15%).
The biggest area of store loss remains shoplifting at 39%, which has increased from last year’s figure by 9%. Theft or fraud by employees closely follows this at 33%, which has also seen an increase - of 6% - since last year.
Paul Bessant from Retail Knowledge said: “As economic conditions have continued to be tough for retailers and consumers alike it is perhaps not surprising that crime has increased yet again. Retailers are under continuous pressure to protect their business from loss but under ever tighter fiscal constraints, whilst simultaneously the poor economic situation has perhaps led to many good people making bad decisions, which ordinarily they would not do.”
Findings show that most retailers still treat store and online loss prevention separately. Typically, the Head of Loss Prevention focuses on stores, while online shrinkage is managed separately. However, employees, customers and fraudsters do not make this distinction. With the growth of multi-channel retailing, where transactions cross organisational boundaries, the study shows the wider use of a cross-functional, holistic approach to loss prevention.
Furthermore, retailers expect online sales to increase from 12% currently to 31% of total business over the next three years. As this happens, there will be an adoption of an increasingly joined up philosophy to all loss prevention, store and online. The results of the survey have shown that retailers increasingly recognise the need to invest in online prevention, with an increase from 0.3% of sales in 2012 and 0.4% in 2013, to 0.43% this year.
Published annually by Retail Knowledge Ltd and sponsored by payment experts Kount, the 2014 Retail Fraud Survey is the most extensive report into the systems, processes and strategies of 100 of the top retailers in the UK.
The study represents retailers with annual sales totalling £137 billion; 30% of the total UK retail sector and encompasses retail performance of 42,700 stores and covers everything from shrink levels and online and offline business threats to anticipated equipment and systems updates.
